Drawing contemporary comparisons between the stock market today and
the market that existed in 1928 is specious. The entire nature of
our economy and the market has undergone dramatic change. If we
have not learned everything about managing economies and the markets
since the, at least we've learned a few things, e.g., controling
margin. As for the recent market collapse, did anyone notice that
day-by-day about 40% of the market or better was going up instead of
down? (I am happy to say that our clients averaged positive returns
from the end of 1999 through today.) I've run "what if" scenarios
starting each year from 1960 through today using a 3% inflation adjusted
6% withdrawal rate. So far,it has worked. (By the way,all one needed to do to beat the market from 2000 through today was to recognize at the end of 1999 that the obscene PE's of the NASDAQ and S&P 500 could not be sustained and get out of them and flee to value. Of course, if your sole equity investment strategy is to see Bogle as god and an S&P index fund as manna, then you couldn't do that.)