Assumed in your post is a World of absolutes, fully invested /zero invested. Personally, I don’t invest in Crypto because I don’t understand it. However, in the World of stocks, bonds, cash and commodities; I regularly adjust my allocations. Some plays have historically performed better under certain macro conditions. Principles such as don’t fight the Federal Reserve have been proven wise over time. When the money supply was expanded 20% through monetary and fiscal policies, stocks tend to go up in the short run. But then, too many dollars chasing too few goods causes inflation.
Sure, you stay invested in things you feel won’t do well in the short term because you could be wrong, but perhaps you reduce the allocation to that sector.
For example, Ultilities to me have a current appeal due to dividend income and the longer term public policy to use electric cars. Compared to the major indexes their loses have been relatively modest. The threat is rising bond yields will steer away income investors to bonds and there are legitimate questions about electric car affordability and batteries.
I do agree diversification and having some liquidity to lessen the downside and buy dips once a floor has been established, is wise.
