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>over the long term it seems to hold Certainly, but as Keynes said, "in the long term we're all dead". Less dramatically, average annual returns over long per
by DebtDeflation 6y ago
>over the long term it seems to hold
Certainly, but as Keynes said, "in the long term we're all dead". Less dramatically, average annual returns over long periods of time depend dramatically on when you start and stop the calculation. At some point, people want to retire and live off their savings and "wait another 10 years and you'll recover your principal loss" isn't a comforting message.
- jdhzzz 6y agoThat's why one keeps 10 years of cash (or equivalent) as a cache to weather those downturns. I'd recommend 6 years, but something that you could draw from while markets recover. It seems as if the cadence of market downturns and recoveries is increasing. It's not a binary choice.
- shanusmagnus 6y agoI would love to know who really keeps 10 years of expenses in cash on-hand. I bet you could write the list of non-billionaires on a napkin.
- mikestew 6y agoYou could likely write the list, billionaire or not, on a Post-It(tm). I mean maybe billionaires keep 10 years of billionaire lifestyle in cold hard, but that would seem to be a poor use of such a huge chunk of cash.
- deanmoriarty 6y agoI have 10 years in cash/short term bonds, and 40 years of expenses in stocks. It’s basically roughly a 80/20 portfolio, nothing unheard of, especially for retirees (though I’m still working).
- deleted 6y ago[deleted]
- deanmoriarty 6y agoI have 10 years in cash/short term bonds, and 40 years of expenses in stocks. It’s basically roughly a 80/20 portfolio, nothing unheard of, especially for retirees (though I’m still working).
- eloff 6y agoI have never met anyone who does this. Have you?
- deanmoriarty 6y agoI have 10 years in cash/short term bonds, and 40 years of expenses in stocks. It’s basically roughly a 80/20 portfolio, nothing unheard of, especially for retirees (though I’m still working).
- eloff 6y agoGood for you. That's puts you in the top few % for retirement planning.
- gowld 6y agoYou're misunderstanding. Taking a haircut after 30years of gains is OK.