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Risk Mitigation Strategies?
#1
In my mind market risks appear very high now and in recent years due to US and international macro economic risks.
 
Some of these include trade wars, Chinese debt and banking instability, Turkey currency and economic uncertainty, questionable long term European market growth prospects, Russian and Chinese cyber aggression, US DOJ dysfunction and bias, US political push into socialist policies, questionable US fiscal policies (tax cuts without spending cuts), the new US military Space Corps branch and additional unconstrained spending activities - I worry about these kinds of things.  Many of these macro level risks appear to hold potential catastrophic consequences.  And for a melancholy kind of a guy like me, well, the "don't worry be happy" mantra doesn't really fly.
 
Two risk mitigation strategies I use include (1) diversification (defined by a minimum of 123 stock in a portfolio), and (2) covariant markets (investing in markets which generally go up over time but behave differently from other asset classes (e.g. SP500 index, US REIT index, and European index).  And I prefer to buy ETFs to participate in these markets.  So I have some knowledge of how to mitigate financial market risks.  But how does one guard against world wide systemic risks?  Much of which enter US financial markets by way of loony tune governments and economies and threats outside of our control.
 
(And thanks in advance to charter captain's ever solid advice to sit  on my boat and drink a beer - that DOES help!)
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#2
I am 65, retired since 59.  Here's my balance.  A few years ago, I was 60% fixed income...that is now cash (short term).

Domestic Stocks: 31%
Foreign Stocks: 9%
Bonds: 46%
Short Term: 14%
Other: 1%
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#3
My risk mitigation strategy is really based on time horizons. I view risk in the short/mid term differently than I do in the long term. With respect to long term investing, I have a diversified aggressive growth portfolio of ETFs which includes domestic and foreign equities, domestic and foreign bonds, and real estate. My investing horizon for the long term can endure significant market downturns and the time period required for recovery. For short/mid term investing, I have a bond ladder and cash that meets all needs for the next 5-7 years; depending on market conditions and timing, I will add to that or pull back somewhat as opportunity arises.
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#4
I use my Cash positions to mitigate my Equity Portfolio risk.
That Portfolio has a Growth orientation with International exposures.
According to Black Rock software analysis, I am right on the Efficient Frontier.
I would suggest that analysis like that is appropriate and informative to answer your questions.
It was both of those to me.
YMMV but it's worked for me.
 
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#5
question - is this software purchased, or can I find it on a web page? I am familiar with the Efficient Frontier portfolio and risk mitigation approach and am very interested in learning more about using this software for constructing a portfolio. Thanks!
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#6
No unfortunately, the software is a professional package.
I have a thread about my search for a CFP/RICP.
The analysis was done by the CFP who we selected for our fee for service Financial Plan.
The best people we interviewed had various software packages including the professional version of eMoney.
This one uses Morningstar, Black Rock and eMoney software to explain and plan for individuals.
I think it's an excellent way to get a real handle on the issue you presented.

RICP, CFP Financial Plan
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