When we are deciding on what baskets we want in our retirement account, it may be helpful to think in terms of a growth basket and a safety basket. The growth basket will usually contain mostly equities since equities have the highest historical return on average. They also have the most volatility so the day-to-day fluctuations can be nauseating. This is a rather elementary way of thinking about it, but often simple is good enough. For me, spending a lot of time and effort understanding investing, returns, risk, and portfolio allocation strategies has been worth it, and I am just beginning that lifelong journey.
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Last Updated: 6/25/2018