Would you like to lower the volatility of your investment portfolio? There’s an easy solution.
No, the solution we’re thinking of is not to retreat to cash—which, even in times of low inflation, is a strategy doomed to steadily lose the buying power of your portfolio. All that does is guarantee a downside.
Diversification will only get you so far. Downside risk doesn't go away just because you’re holding multiple asset classes, as everyone learned all over again in 2008-9.
The actual answer is: look at your portfolio less often.
Come again? Volatility is actually a time-based concept. Your portfolio goes up or down literally several times a second during every day, and of course, you would go crazy if you watched it second-by-second. So maybe instead you check daily. But why daily? Why not monthly? Or, since you know it’s a bad idea to sell out when the markets go down, why tempt fate and look even that often?