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Almost no one has the stomach to buy when equities are crashing and everyone around is panic selling.

Except perhaps for the people who avoided the crash and subsequent panic to begin with. Speaking for myself I'd be down right giddy if I managed to go to 80% cash and the market then went on to crash. Besides by definition in order to have a sale you need a buyer and who better to buy than someone with lots of cash. So someone does have the "stomach"; no? :<)

Although personalty, I have never gone to the extreme of 80% cash, I do regularly fluctuate between near fully invested and 50% cash and can bear witness to how much easier it is to be "buy on fear" if I was fortunate enough to "sell on greed" shortly preceding the fear.

While I agree that losing out to inflation and tax implications are legitimate risks, positioning yourself where you are frozen by your emotions ("no one has the stomach") is a risk as well and the degree to which you are invested would certainly have a strong correlation with your emotional swings.

I'll concede that your viewpoint is likely conventional wisdom among investment advisers but I have my own views on that as well.

Conventional wisdom is often simply inertia with a candy coating of conformity.

B (Around 30% cash and climbing)

PS Notwithstanding the above comments, I have never viewed you as a conformist which in my book is a good thing. :<)
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