@Derf: I try not to post over something that has already been put up. But, at times, it happens.
Perhaps, the class needed another lecture on the subject and there just might be some that simply missed its first posting as I did. Often times, a professor will offer the same lecture more than once. And, besides @hank, @Old_Joe and @MikeM had a great discussion and exchange going between themselves on this very subject; but, under another thread topic.
For me, what is important about this study, with me being in retirement, is that it reflects that a 50/50 portfolio can substain a 4% withdrawal rate and grow principal over time as the 50/50 portfolio averaged an 8.5% return over time. I'm thinking, the 4% withdrawal rate would have to be computed on the portfolio's average value. This is why I set my own withdrawal rate to generally not exceed a sum of what one-half of my five year average return has been. I found in doing this about twenty years ago when I governed my parents portfolio's provided them ample income plus grew their principal. Now, I have adopted this very same distribution withdrawal method.
Sorry @Ted. My bad. I simply missed it's first posting.
Skeet

In this article Paul Merriman offers up his thoughts on the subject of how much risk investors should take with their portfolio. One of the links within the article opens a chart that reflects the annual return of differenet asset allocation models by year and over time. An asset mix of 50% bonds and 50% stocks offered up an average annualized return of about eight and one half percent over an extended period of time.
The study used the S&P 500 Index to represent stocks and intermediate term US Treasuries to represent bonds.
https://www.marketwatch.com/story/how-much-investment-risk-should-you-take-2019-04-03/print
Enjoy the article.
Old_Skeet

Protect Your Portfolio From a Market Crash
https://money.usnews.com/investing/investing-101/slideshows/7-ways-to-protect-your-portfolio-from-a-stock-market-crash?src=usn_invested_nl
April 4, 2019
Signs are emerging that a stock market crash may be coming. The current 10-year bull market is the longest in history.
The bond yield curve is trending toward an inversion, with longer term interest rates lower than short-term yields; historically, the inversion of the yield preceded many U.S. recessions. For example, the curve inverted in 2007 before the U.S. equity market collapsed.
While the only guaranteed way to protect your money from the next crash is to avoid investing in the market, the average 9% stock market return from long-term investments may be worth it. If history is a valid guide, patient investors will profit from risking a portion of their money.
Reduce permanent capital losses. When stock prices decline, investors must pause and think. “The most important strategy for investors worried about the next bear market is to reduce the risk of a permanent loss of capital,” says Daniel Kern, chief investment officer at TFC Financial Management in Boston.
It’s natural to want to ease the pain of a stock market loss by selling and leaving the stock market altogether. Investors who make this fatal step, let their emotions dictate their decision-making and ultimately turn a temporary loss into a permanent one. Research shows that investors who sell after a market drop have lower long-term returns than those who hold on and wait for the market to rebound.
Prepare in advance for a stock crash. Implementing well-respected portfolio management strategies and creating an appropriate mix of stocks, bonds and cash for one’s age, time horizon and risk tolerance can set investors up to handle the next stock crash.
Gage DeYoung, founder of Prudent Wealthcare in Denver, found that a balanced portfolio of 50 percent stocks, 40 percent bonds and 10 percent cash would have lost about 19 percent of its value from November 2007 to February 2009 during the Great Recession; that's based on a study using financial planning software. A conservative portfolio with 20 percent stocks 50 percent bonds and 30 percent cash would have suffered a small 3 percent loss during that same time, according to his analysis. – Barbara Friedberg

@David_Snowball enjoyed your analysis of BAFWX. Thank you. In the article you mention that:
" With an 18.0% lifetime APR, BAFWX is an MFO Great Owl in the multicap growth category. That means it has consistently received a return rank of 5 (Best) for all periods three years and longer. It joins only nine other GO funds in that category. Investors have not sacrificed returns or experienced a tradeoff from using ESG characteristics in the portfolio."
Could you please provide a list of the other 9 GO funds with a return rank of 5 for all periods? thank you

“Investors Shouldn't Watch Business TV”.
Alright. Than who should watch ?
I’ll say, coming from a very large family where money & money management were pretty much alien concepts (except Fridays when we ate very well), just about everything I learned about the subject of finance came from Rukeyser’s old show on Friday nights - which spanned 25 years. Has shaped my attitudes towards investing for decades.
You could do a lot worse than to invite the likes of John Templeton, Peter Lynch or Henry Kaufman into your living room on Friday nights. Yes - I was a college grad. But being a liberal arts major, left school knowing much more about Robert Frost than about money.

I was intrigued by the absence of Janus from the short best balanced list, and of Wasatch from the short best SC list, and must investigate that further. What was most striking to me, though we all know how conservative DS tends toward in this long richly valued market, was:
"In general, for non-retirement investors, stocks should be treated like cooks treat habañero peppers: cautiously and with a clear understanding that a little bit is good and a lot is disastrous. Asset allocation research from T. Rowe consistently illustrate the risk: stock-light portfolios make a bit above 5% annually, stock-heavy portfolios make a bit below 6% annually while nearly quadrupling your risk."
If I had followed that thinking for long at almost any point during the last 40y, I would have had great difficulty privately educating my two kids, and my wife and I would have never been able to endure forced retirement ~6y ago.

https://www.kiplinger.com/article/investing/T033-C000-S002-kiplinger-25-how-we-did-in-a-very-contrary-year.html
The Kiplinger 25: How We Did in a Very Contrary Year
Also, we move to rebalance our stock portfolio with a midcap offering.

I have a toolbar tab for the WSJ Category Kings; the data have not been updated since February 5, so they may no longer be available.

Hi guys,
I found all of your comments of good value.
This has been a good discussion which I chose to step back from an observe until I felt that it was about to conclude. I'll say this about my all weather asset allocation its purpose is to provide sufficient income, maximizes diversification, minimizes volatility, and provides long-term returns. Thus far from running a back test of the portfolio it seems to accomplish these goals.
Should my portfolio begin to trail the Lipper Balanced Index by a reasonable amount (let's say 10 % to 15% range) then I plan to revisit my allocation and my needs to see if any adjustment might be wise. Just because it is this way now ... does not mean that it will always be this way.
One of the things I now plan to do after monitoring this discussion is to trim the amount of cash now held within my demand cash sleeve down to a sum equal to about one fourth of my portfolio's annual income generation. I'll most likely split position this sum between my Income and Growth & Income Areas as Hank made a good point about opportunity loss by not being more fully invested.
Old_Skeet

@hank; Wouldn't it be nice to have some dry powder to throw at the market, say with a drop of 20,25, or 30 % ? Maybe a spiff play or two as Old_Skeet does from time to time.
Good topic.
Derf

Agree @Derf. But what you suggest is easier said than done. One’s phychology (as well as that of our “news/ information” sources) gets distorted during bear markets. (Would take a Stephen Hawkins to explain it well).
But, yes - Ol’Skeet has a very definitive concrete plan. That’s what one needs. I used to do that (add during declines). The hardest thing was knowing when to “hold fire” and when to begin committing the dry powder. Tough because when markets start to fall you don’t know how far or for how long.
BTW - John Templeton used to say - “It’s very rare” for a market to fall by more than 50% (peak to bottom) and remain there for long (but it is certainly possible). If I recall correctly he was alluding in particular to some of the emerging markets of the day. I’ve always taken that to heart. So, for a long term investor, when you come across a market you’d like to own that has sustained a 50% or greater loss from its peak it isn’t a bad time IMHO to stake out a hold. Doesn’t always work. Example - Oil peaked at over $100 in 2015 and than fell to as low as $26. However, today at $60-$70 it’s getting back nearer to its all time highs.

Agree @Old_Joe, we sometimes have to pay for a restful sleep :) Yes, Hank always makes good points.
I mentioned the 50-40-10 mix in my earlier note, but that was just a random choice to present my point. Another good reason to hold that 2, 3 or 4 year safe-bucket, I think, is that the rest of the portfolio can be more aggressive since you have given yourself time to recover any market-drop loss.

Thanks both for the input. Having deliberated this a while, I want to concede that my analysis is quite distorted in that it may suggest only taking from investments near market peaks. Of course that’s not realistic. So, proponents of the bucket approach need to plan ahead as to when something would “trigger” withdrawals from said bucket - as well as to when they would begin “refilling” it.
What I’d fear most with this approach would be that when my bucket had dropped below the “25% remaining” level (maybe 4 years after I began withdrawing from it), I’d panic and sell some securities at very depressed levels to add to that bucket (similar to noticing your gas tank is below quarter-full and not knowing how far away the next gas station is).
Those with good memories will remember that by the end of ‘08 almost everyone was expecting things to get even worse. Of course, 2 months later the recovery began.
@MikeM - Yes, you make good sense. By pulling from your cash bucket (as you explain it) you are in effect increasing your allocation to equities & other risk assets. Generally, that’s a smart thing to do in a falling market (but psychologically difficult).
@OldJoe - Yep. I sleep well too. Always something in the basket that increases in worth - even on the worst days - (but sometimes only the cash portion) :)

But you’re farther ahead during up markets by having 100% invested (includes allocations to cash / bonds).

@Hank, I don't disagree with that statement. Just some thoughts: buckets for me are really just a frame of mind, a way to delineate. The cash bucket is still part of the total portfolio. If you are say 50% equity funds (which may include some cash, but not bucket cash), 40% bonds and 10% "cash (CDs, MM, and maybe some low risk equivalents) and you call that 10% your cash bucket that you use to withdraw from, your still "fully invested". Right? Fully invested meaning to your appropriate age, needs and risk tolerance.
I agree you need to stay invested, as you said, while the stock market is rising, but also I see advantages to be able to not pull from those equity funds in a bear, when you are cashing in on a loss. The equity drop is just on paper unless you have to withdraw low.
Good discussion. I enjoy this topic.

@hank; Wouldn't it be nice to have some dry powder to throw at the market, say with a drop of 20,25, or 30 % ? Maybe a spiff play or two as Old_Skeet does from time to time.
Good topic.
Derf

Food for thought - I’ve never subscribed to this popular notion of maintaining a separate “bucket” of cash to “tide you over” during temporary declines. My approach has been to create a (1) reasonably stable portfolio with growth potential and to (2) take small enough distributions so as not to deplete significantly the overall portfolio. Yes - you lose some ground by taking distributions from the investment pot during bear markets. But you’re farther ahead during up markets by having 100% invested (includes allocations to cash / bonds). Decision making related to how much cash to hold and trying to time when to dip into that bucket are substantially reduced. Albeit - you may also lose ground during bull markets as well because you’re not as aggressively invested as you might be (having a sizable bucket of cash in reserve). Since Ms Dizubinski and a number of smarter people here than me favor this bucket approach, I’ll defer to their judgement. No intent to give investment advice. Not an expert (Only “C“ s in math).
Proponents of the approach Dizubinski advocates often point to the duration (in month’s) of a bear market. However, a more accurate way to examine this is to look at the number of months from market peak to full recovery. Since the bull market always begins at the bottom of a bear market, the climb back up to the earlier high can be long. I suppose the proponents of the cash bucket approach intend to rely on the bucket during the full recovery period?

Just estimating here -
- Looks like it took about 10 years for the S&P to fully recover from its high reached in 1906 (Dividends / compounding aren’t included* / A world war transpired).
- About 25 years elapsed before full recovery from the 1929 S&P peak (A world war intervened).
- After the 1968 peak, nearly 20 years elapsed before all the S&P losses were recovered.
- The S&P partially recovered from the 2000 sell-off (in 7 years) by around 2007. Than the “big fall” we’re most familiar with occurred.
- From that interim high in 2007, the market recovered in just 5 years. To some extent, that rapid recovery may have taught us the wrong lesson.
- Full S&P recovery, however, from its 2000 high took something in the vacinity of 15 years.
Admittedly, the above analysis is at least partially flawed: *(1) It doesn’t account for compounded dividends paid investors along the way, (2) It assumes (suggests) that investors dipped into their cash bucket immediately after a significant decline from “peak” occurred and relied on it until full market recovery, (3) It fails to acknowledge most investors are diversified into domestic equities, international holdings and debt instruments in addition to the S&P. To this last point ... If you own an actively managed fund of just about any sort you’re automatically exposed to some fixed income (typically cash) held by the manager for liquidity purposes.
Here’s the source of the chart and some accompanying analysis:
https://www.advisorperspectives.com/dshort/updates/2019/04/01/a-perspective-on-secular-bull-and-bear-markets

It used to be printed, then about 5 years ago they announced that it no longer would be, but that it could be accessed online (until now).

WSJ has had an online Mutual Fund Listing of all MF's by family, with their returns, at the end of every quarter - until now. Even if the new report was not out, the website would display the previous quarter. Now I get a completely different page when I enter the old url: http://online.wsj.com/mdc/public/page/2_3053-quarterly_A-quarterly.html. Anyone have a suggestion?

1-2y true cash may be a little scant, though I just commenced moves to result in 5y cash or bonds and that seems excessive, some days

@davidrmoran, I've gone back and forth with myself what that 'number of years' cash bucket should be also. I was initially pretty conservative with a plan to hold 4 years living expenses in cash. I've reduced that # in my plans. The object for me is make sure I don't have to sell equity funds in a bear market. I think from what I've read the typical bear lasts about 14 months. Average recovery about 5 months. So given that, a 2-3 year bucket should be more than efficient.
The other part of that safety bucket I'd like to incorporate is that all dividends earned in my portfolio would continuously go into that safety-cash bucket. That would safely stretch out that 2-3 years need for replenishment even longer.
Good luck with your planning.

@Old_Joe, FWIW, this article was posted a few days ago. An ETF convertible bond fund. I looked at it quickly but not interested at this time.
https://www.marketwatch.com/story/a-bond-etf-with-an-equity-feel-2019-03-29-1246451/print

@Old_Joe: Some convertible funds have a higher yield than others. For the two that I noted that were open PACIX has a yield of 1.94% while LACFX has a yield of 3.75%. Some may favor a higher yield over a higher total return. I know I look a good bit at yield, being retired and seeking income, with some growth of principal to offset inflation. Both of these two funds should also pay out year end capital gain distributions. I consider that bonus money.