Every asset has its bad year.

Let’s play “what if.” Below are four made-up years and how four kinds of assets might move in each, in Egyptian pounds. The numbers are assumptions to show the idea, not forecasts.

Four scenarios

• Local stocks fall: equity funds −30%, fixed income +12%, gold and dollar assets flat.
• The pound loses 30% against the dollar: dollar assets and gold +43% in pounds, fixed income +12%, equity +5%. Inflation would also jump, so real gains are smaller.
• A global crash: equity −20%, dollar assets −25%, gold +5%, fixed income +12%.
• A calm year: fixed income and equity +15%, dollar assets +10%, gold +5%.

No single asset wins all four. Even fixed income loses ground after inflation when the pound falls. That’s the whole case for diversification: not to avoid every loss, but to make sure one bad year doesn’t sink everything.

How the mix changes the bad year

Apply those four years to some example mixes (fixed income / equity / gold / dollar assets):

These are examples, not recommendations. The right mix for you depends on your goal, your time horizon and one more thing.

How you feel vs. what you can afford

Risk tolerance is your feelings: would you sell after a 15% drop? Risk capacity is your facts: is your income stable, is your emergency fund in place, who depends on you, and when do you need the money? A brave 25-year-old with an unstable income and no savings has high tolerance and low capacity. Invest at the lower of the two. Tools like Thndr Alpha ask about tolerance; capacity is your homework.

Same amount, every month

Dollar-cost averaging means investing a fixed amount on a schedule, whatever the price. It isn’t magic. Here’s 6,000 pounds invested either all at once or 1,000 a month for six months:

• Prices keep rising (10 → 15): all at once ends at 9,000; monthly at 7,339. All at once wins.
• Prices dip, then recover (10 → 6 → 10): monthly ends at 7,833; all at once at 6,000. Monthly wins.
• Prices keep falling (10 → 5): both lose. Monthly ends at 4,228, all at once at 3,000.

Its real value is behavioural. You never have to guess the right moment, and you keep buying when everyone else is scared. For anyone paid monthly, it’s the natural way to invest anyway. Boring and consistent wins.

Your feelings are expensive

FOMO makes people buy after big rises, near the top. Panic makes them sell after big falls, near the bottom. That’s buying high and selling low, the exact opposite of the plan. The fix is a written plan made while you’re calm, and automatic monthly investing so you don’t decide in the moment.

Check in. Don’t check obsessively.

Over time your mix drifts. After a strong year, a 60/40 plan might become 75/25 without you noticing, which means more risk than you chose. Rebalancing brings it back: sell a little of what grew, or direct new money to what shrank. Once or twice a year is enough.

What you invest in matters. How you behave when it falls matters just as much.