You're misunderstanding.
Taking a haircut after 30years of gains is OK.
That's why one keeps 10 years of cash (or equivalent) as a cache to weather those downturns. I'd recommend 6 years, but something that you could draw from while markets recover. It seems as if the cadence of market downturns and recoveries is increasing.
It's not a binary choice.
Re:Why in the world would you own bonds?
by shanusmagnus on Wednesday March 17, 2021 @11:29AM
(#26492579)
I would love to know who really keeps 10 years of expenses in cash on-hand. I bet you could write the list of non-billionaires on a napkin.
Re:Why in the world would you own bonds?
by mikestew on Wednesday March 17, 2021 @02:02PM
(#26494770)
You could likely write the list, billionaire or not, on a Post-It(tm). I mean maybe billionaires keep 10 years of billionaire lifestyle in cold hard, but that would seem to be a poor use of such a huge chunk of cash.
Re:Why in the world would you own bonds?
by deanmoriarty on Wednesday March 17, 2021 @08:36PM
(#26498539)
I have 10 years in cash/short term bonds, and 40 years of expenses in stocks. It’s basically roughly a 80/20 portfolio, nothing unheard of, especially for retirees (though I’m still working).
Re:Why in the world would you own bonds?
by deanmoriarty on Wednesday March 17, 2021 @08:32PM
(#26498519)
I have 10 years in cash/short term bonds, and 40 years of expenses in stocks. It’s basically roughly a 80/20 portfolio, nothing unheard of, especially for retirees (though I’m still working).
I have never met anyone who does this. Have you?
Re:Why in the world would you own bonds?
by deanmoriarty on Wednesday March 17, 2021 @08:37PM
(#26498540)
I have 10 years in cash/short term bonds, and 40 years of expenses in stocks. It’s basically roughly a 80/20 portfolio, nothing unheard of, especially for retirees (though I’m still working).
Certainly, but as Keynes said, "in the long term we're all dead". Less dramatically, average annual returns over long periods of time depend dramatically on when you start and stop the calculation. At some point, people want to retire and live off their savings and "wait another 10 years and you'll recover your principal loss" isn't a comforting message.