In my opinion, it so depends on the person and where they are at in relation to retirement which I can personally attest to (having recently retired) has lowered my appetite for risk. I personally have a low risk, high yield bond fund as part of my Roth and Investment accounts but that bond fund pays a nearly 8% dividend and with the specter of lower interest rates looming it has had and should continue to have some principal accumulation to go along with the dividend. I will take on extra risk with securities (stocks) as cash returns decline but still relatively conservative.
In a nutshell with my mix of cash securities and bonds for 2024 I've made 2/3rds of the market return (about 10%) at 1/3rd of the risk. It works for my risk tolerance and needs. I sleep OK.
But my needs aren't your friends, and if he's a long ways from retirement it's potentially a very different conversation.
Keep in mind that the concept of taking on risk can be very different than the actual response to risk when a problem (significant downturn) materializes. I did some extensive analysis once and came to the conclusion (that many others have also come to) that should the market adjust down and if a person rides it down, the very worst thing a person can do is sell at the bottom; and of course no one knows exactly where that will be. That's why (again my opinion) investment advisors ask a lot of questions about risk, to avoid putting a client into a portfolio that will cause them to panic and bolt at the bottom.
Just things to think about, I am not all trying to say what's right for your friend.
