Originally Posted by tennisguru

But that cuts both ways. Yes, a cash position will buffer against a loss in value during a downturn, but it also holds back an increase in value during a bull market. I had no cash on my 401k going into 2020, and now my portfolio is up even higher than it started last year. All a cash position would have done is reduce my losses while at the same time leaving less in my account today. As I get closer to retirement I will dial back risk but with 30+ years to go I have no fear or panic going into any sort of downturn because I know I will come out ahead long term.

And again, I have a strong non-retirement cash position now and will certainly increase that many times by the time I retire. You can only put so much money into a tax-advantaged retirement vehicle, while there is no limit to how much cash you can save outside retirement. Why not put as much of those limited retirement dollars to work growing year after year instead of missing out on growth with dead cash when I can keep all the dead cash I want outside my 401k?