03-02-2014, 09:42 PM
(03-02-2014, 07:53 PM)hendi_alex Wrote: Retail investors have a reputation for getting taken to the cleaners during strong down drafts. So the question that I ask [is your temperament such that you could lose 50% of your net worth and still feel good about the dividend flow?]. If the answer is yes, then you are probably a good candidate to always be 100% invested in equities at all times. If on the other hand, you might tend to get frightened, panic and run at the worst possible time, then you should probably increase the cash weighting when the market starts to feel toppy or when the expansion gets a little long in the tooth.
Once again, how many times in the last 50 years has there been that kind of downdraft?
A more likely scenario would be a 10-20% downdraft for the indices and less for blue chip dividend growth companies. My honest opinion is that posing extremely unlikely scenarios is injecting a probability into the discussion that is not significantly different than a zero probability.