No. of Recommendations: 3
Ray:
Work with an assumption that stocks will take a 50% loss sometime. Then stocks recover a year or two or three later. Can you survive during that 50% drawdown?
We typically think of our portfolio being just the brokerage & 401K accounts.
That should be 100% stocks, because stocks are the asset class that is going to grow. Bonds do not grow, at best they maintain their value. A substantial bond allocation in your portfolio is a huge drag on overall performance.
The cash & near-cash? Don't think of that as part of your investment portfolio.100% stocks in retirement with 4% WR.
Enough cash & near-cash to get through a 50% drawdown, say 2.5 years of expenses worth, or 10% of liquid net worth.
1995 retiree is doing great:
testfol.io: Portfolio Backtester for ETFs and Asset Allocation2000 retiree had a rough time, but survived:
testfol.io: Portfolio Backtester for ETFs and Asset Allocation2008 retiree had a rough time and is doing just fine:
testfol.io: Portfolio Backtester for ETFs and Asset AllocationIt could be rough though, unless you have other income to rely on, like a defined pension.
