Interesting question. I'm not sure I would agree with it. When I'm coaching someone with their finance goals I want to do several things for them. I want to help them become DEBT FREE. I want to provide them with INCOME PROTECTION right now. I want to set them up to be FINANCIALLY INDEPENDENT at their chosen age of retirement. Specifically as relating to your question I would like to see them with a fairly broad portfolio of Mutual Funds. Some High Risk, lots of Mid-Range risk and some strong and steady Low Risk options. I want them to understand the concept of BUY LOW/SELL HIGH! Also to understand that Mutual Funds are best left to simmer for the long haul investment. A lot of people freak out when the market drops, but when you look at the market for the past 50 years it has RISEN...even though there are almost continuous and almost foreseeable "hiccups" of CORRECTIONS taking place ALL THE TIME. As long as your portfolio IS diverse you will not only recover over the typical 30 to 35 year investment, you will be able to take advantage of any "drops" to buy MORE stock that on the average will net you 10% to 12% over the invested time of 30 years or so. I've had stock that was getting maybe only 8% for six months or so and then rose to 18% and 19% for another six months or so...slipping down to 12% or 13% then for another six or eight months...big deal...no problem! It still beats the 1 to 3 percent a bank MIGHT pay me on the same investment and also the 6% I MIGHT FIND (GOOD LUCK) on a typical CD. You want to consider the age of the investor as well. Using the Rule of 72...how many more doubling periods do you or does your client have left? Also, if you are Debt Free, that is instant cash to create an emergency fund (liquid) and a fun money fund, because you have to have fun NOW too! Plus it's additional cash for investing towards your retirement! These are the questions I pose and offer solutions on with regards to this sort of situation.