How do I make a rational decision about my risk tolerance? I read things like “bonds until you can sleep at night,” but that seems too subjective. Right now I assume the future might be (5% chance) something like the worst two years of the past 40, and adjust for that.
Makes me a bit sad to see broad ETFs and stock mutual funds do better than me, but I expect to be better off when that eventual recession comes. My investment mix returns 8%+ and feels defensive. Is it “different this time?” Are recessions and high inflation historical anomalies that will never happen again in my lifetime?