No. of Recommendations: 1
"If you have 20+ years to go, there's no reason to have any bond exposure. Which is essentially what "diversified" comes down to--owning bonds. Not to mention the terrible losses that bonds will have in the coming decades as interest rates cease their long decrease and start going back up to normal levels."

Oh, there are several good reasons for owning bonds in your portfolio. Or a ladder of CDs.

Yeah, the market , so far, has never gone down and stayed down. But if you bought in 1929, it would be till the 1940s before the DOW recovered....more than 15 years.

If you had retired in 1929, your portfolio would not look all that great with just stocks after 2 years. Stocks down 90%. Now, if you were 50/50, each year you rebalanced...you would have bought a lot of cheap stocks and really cleaned up as the market recovered.

If you owned all stocks, you would be crying in your beer (if you could afford it) in 1932 with the market down 90%. With your stocks down that far, you probably couldn't afford it. Unemployment was 25% so going 'back to work' would have been a big problem too.

1968 also wasn't pretty. all stocks? Hmmm.....

Remember, the 4% rule is based upon a diversified portfolio of bonds and stocks, even starting out at the beginning of a 30 year period.

Now, for the past 30-40 years, running 90% of stocks or more has been the most successful strategy....... but that could all change TOMORROW..... who knows?

But telling someone who is retired, with 20 years left on the 30 year withdrawal period, that 'all stock' is just peachy.....well, not in my book. The next 10 years could be down 10% a year for year after year after year.......


t.
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