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If you're 55, you must remember the 70s...

1/1/73 S&P 500 was at 118
1/1/75 S&P 500 was at 68
1/1/82 S&P 500 was at 122 (and then started heading up, up, up)

I well remember those years, and the 60's. I recall a WSJ headline about the DOW and the S&P500 which went like this: Blue Chips or Blue Gyps? Pity ye widows and orphans. ... This was in the gunslinger era, when conglomerates were catching on. Nobody wanted the staid old blue chips. They wanted GROWTH and forget that stodgy stuff. Well, in the course of time the gunslingers got carried out feet first, and the S&P was rediscovered. I personally believe the S&P is overpriced in todays market. I don't have an S&P index in my portfolio, quite the opposite, I have the Vanguard Extended Market Index Fund, which is the Total Market Index Fund less the S&P 500.

The studies I recall took data for many combinations, for various mixes of stocks and fixed income securities, for various periods, and assumed a 5% withdrawal rate. The articles I mentioned date from the 1980's. I have a printed copy around here somewhere. The safest combination for long term was between 60 to 70% equities. I think Intercst's (from REHP) data show a similar thing. I actually took his data and plotted 30 year SWD versus starting year for various mixes, from 100% stocks to 100% fixed income. Interestingly, two years were pivotal: 1929 and 1968. Those two starting years dominated the rest completely, and a 60-70% equity mix was still "safest".


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