17 Jun I’m in all index funds. Should I pull back my stock exposure?

Q. I keep looking at the stock market, sort of in shock at how well my investments are doing even though there is so much volatility. I’m all in index funds, even if my 401(k). With a possible AI bubble and everything happening in Iran, should I pull back my stock exposure? Or will I just end up losing out on gains? I’m 50.
— Investor

A. That depends.

There’s no single correct answer because your personal goals, time horizon and tolerance for risk matter a lot here.

If you plan to retire at 67, which would be your full retirement age for Social Security purposes, then you have 17 years ahead of you, said Jody D’Agostini, a certified financial planner with The Falcon Financial Group in Morristown.

“That is a long-time horizon in the investment world, and any short-term event will largely be wiped out,” she said.

As you near retirement and need income from this asset, then you might consider shifting the asset allocation to a more moderate one, D’Agostini said.

“Right now, 10 stocks account for more than 40% of the return of the stock market, and they are largely all in tech/communication stocks,” she said. “If you are in the S&P 500, you are overly concentrated in that sector.”

Asset allocation accounts for over 90% of the return in a portfolio, D’Agostini said.

“You can consider creating an allocation which weaves in different assets — such as mid and small cap funds or ETFs as well as international and emerging market funds,” she said. “Diversification reduces risk and can give a more predictable return over time.”

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This story was originally published in June 2026. 

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.