mispoken

First; if this makes you comfortable you should do it. Finding the right risk is personal. Just realize you give up returns in exchange for that perceived safety. If you’d done this over the last decade it would have cost you a significant amount of money. Also take into account any fees for the “professional management” of this vehicle, that too erodes your returns further.

You say we are due for a “correction” (is the market currently wrong?), but we already know this WILL happen. The market as we know it, wouldn’t exist without this feature. It’s a good thing. This is the risk that provides us outsized returns compared to your savings account. If the thought of your balance going down 25% sometime in the next 3 years makes you ill, perhaps the account you mention is good for you. Something I like to do to keep perspective is look at where a 25% “crash” would leave us, date wise. If SPY, currently at 390 dropped 25% today it would take us down to about 290 or roughly May 2020 levels. If ones tactic is to avoid corrections, you can accomplish this by sitting out and waiting to jump in at the next correction, but you missed out on everything leading up to May 2020, so what did you REALLY gain? This is why methodical investing and sitting on your hands really works.

I don’t put much stock in “valuation”. These are often talking points for CNBC talking heads and are irrelevant. Many high growth, successful companies are missed because people think these metrics are fortune tellers. And, often people avoid the market completely when some magical metric throws up a “red flag. I always like to ask what a “fair valuation” is when someone’s says something is overvalued. It’s a fun question because this it is impossible to answer. Do we look at an average p/E of the market over the last 10 years? If we are doing that, why aren’t we looking at the average return of the market too? If we did that, I’d say the better bet is on the average return of the market versus an average ratio of the day.

Best advice I can give; ignore metrics, methodically invest in what makes you comfortable, avoid minute to minute ticks up and down, sit on your hands. If you do this through up and down markets, in the end this method works. If an investment vehicle with a guarantee of no loss makes you sleep better at night you should do it. But, consider what you give up in exchange for that.

And always remember, NKA; nobody knows anything.