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Opinion: Over 50 and terrified about tariffs and your 401(k)? A lesson from history. - MarketWatch

1. Investors face risks over-allocating to large U.S. stocks. 2. S&P 500's recent decline is less severe than historical bear markets. 3. Diversifying investments can protect against large stock pitfalls. 4. Older investors risk significant losses without proper asset allocation. 5. Historical comparisons indicate that small and value stocks outperformed during downturns.

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FAQ

Why Bearish?

The S&P 500's current overexposure to large growth stocks raises risks. Past downturns illustrate potential declines of 50% or more.

How important is it?

The potential for market instability based on excessive large-cap allocation is high. Changes in investor behavior could lead to a significant impact on the S&P 500's future performance.

Why Short Term?

Market sentiments can shift quickly, especially among older investors needing immediate returns. Increased market volatility may occur as investors reassess their risk exposure.

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