quote:

Originally posted by 1967Goat:

Say the stock market totally shits the bed and has a major correction. Say 35% + drop in value, or more. How long do you think it would take to recover from that? 5 years....7 years...longer? Once you come up with the # of years, think about what you need to withdraw every year to live on. $30k...$50k....whatever. Multiply that # by the # of years. Stick that dollar amount in cash or bonds. Invest the remainder in low cost index mutual funds, i.e. Vanguard, etc..., and spread it around...S&P 500, Russel 2000, etc... Re-baseline every year.

........

Read both books, they are well worth the read. Graham's book is definitely a deeper dive.

The Dow did not reach the 1929 high until sometime in the 1950’s. IIRC.

In the meantime, fortunes were being made by investors who could identify value bargains. Many stocks were selling for less than the net current assets per share. Net current assets are cash, receivables and inventory, less ALL debt. Divide this by the number of shares outstanding.

These stocks were plentiful during the 1950’s, less so in the 1960’s, and had virtually disappeared in the ‘70’s until the market declines of that decade. They became less and less plentiful again in the recovery and all but disappeared until the break in 2008-09.

I submit that the risk of loss buying stocks on this basis when you can do so is essentially zero.

Read both books if you are interested in learning how these things work.

quote:

Originally posted by mikeyspizza:
Age in bonds is a general rule of thumb. So, if you are 60-something, than 60-something % of your portfolio should be in bonds. If you have a pension (I don't mean Social Security) then your bond allocation can be less.

Google "asset allocation"

Also, visit bogleheads.org, the sigforum of investing (not stock picking). "Bogleheads emphasize regular saving, broad diversification, and sticking to one's investment plan regardless of market conditions. We follow a small number of simple investment principles that have been shown over time to produce risk-adjusted returns far greater than those achieved by the average investor."

bogleheads.org is a great site. Been a lurker there for some time.