“The stock investor is neither right or wrong because others agreed or disagreed with him; he is right because his facts and analysis are right. The intelligent investor is a realist who sells to optimists and buys from pessimists.”
Benjamin Graham, The Intelligent Investor
Fact: 62% of market cycles are bulls and 38% are bears
This strategy is for people who are patient and satisfied with above-average returns over full market cycles in which they will earn market average returns in bull markets and above-average returns in bear markets
Avoiding major losses beyond 10%
Roughly 40% of all yearly returns in US stocks are greater than 10% or less than -10%. Bear markets can and do decline from 50-100%.
As you can see losses beyond 10% require a greater gain to make up the loss.
Strategy vs. 100% Stocks – Growth of $100,000
Period: 1966 – 2020
401(k) Assets, Tactical & Dynamic Portfolios, Pension Overlay
See how it works:
2 Asset Classes: Stocks, Bonds
2 Funds: Total Stock Market Index, Total Bond Market Index
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By the way, allocation changes are rarely occur more than once every 6 months.
Pricing after trial