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This only makes sense if you are planning on using that money in the near term (< 5 years from now). Like you say, timing the market is a bad idea, and that is

This only makes sense if you are planning on using that money in the near term (< 5 years from now). Like you say, timing the market is a bad idea, and that is what you are doing if you try to move to "safer" assets when you "think" the market will go bad. If you keep your assets in riskier stocks (which have higher long-term returns) for more than a decade, you may take a huge hit during a recession, but you'll come out the other end way ahead than if you try to time the market.

aaavl2821 9y ago
It depends on the stock. I'm referring more to stocks with a high chance of going to zero (like early stage biotech) than small cap high vol stocks There's a subtle difference between market timing and adjusting your portfolio as risk / reward changes. As an example, suppose you invest in a stock thinking it will give you a 40% return in one year. The stock does just that, and in a year it has risen 40%. At that higher price, the risk / reward is no longer the same as it was, and you will need to re-evaluate that investment. However, many people just hold on to these stocks because they made money without rationally re-evaluating their investment vs other options probably didnt make that as clear in the above in any event, investing strategy is based on personal goals. if your personal goal is to protect yourself more against a recession, selling risky assets is a good way to do so