“Once again, I said a lot, but really said nothing? ;o),

It's just my thoughts.

Ask your questions you might have, and maybe we can work through them.”

Chin I appreciate your long response, but I am still a bit confused.  First both you and Stats seem to say that the only test is the sleep test.  I guess that would mean that any percentage of equities would work if you could sleep well at night.  Please correct me if I am wrong, but I don’t think that either of you mean to say that.

You originally said that the greatest and only dependable diversification is in the stocks/fixed allocations (and possibly commodities).  Your latest post primarily focuses on other forms of diversification that presumably are not dependable, so I would like to return to the specific discussion of the stocks/fixed allocation.

To help quantify the stocks/fixed allocation you suggested, “You can look back at history, and consider the Crash of ‘29 and what kind of risk you can take on depleting your portfolio in the event you need to draw on it right at the time the market takes a dive such as this.”  You then added, “we might consider inflation our worst enemy going forward -- something like 1973 - 1982. During this period, when the S&P hadn't really reached bubble valuations, small, value, international and REITs still helped stocks represented by the S&P 500 (large blend) lost 60% real over a 10 year period.”  You then further qualified, “It also has to do with whether or not you think something like 1929 is likely to happen again, or you can depend on historic numbers to create a likely scenario at all.”

I suppose this means that the past declines of the market could happen again, but on the other hand, the future may never be that bad or that it could be even worse.  Assuming that other forms of diversification might be helpful, but are not dependable, what do ’29 and ’73-’82 (and the general lack of dependability of historic numbers) tell us about the stocks/fixed allocations generally, and more specifically for a retiree?