FM: I doubt market timing can be done consistently. It’s funny you mention Schiff whose clients apparently lost more than the benchmark index did because he was wrong on other things. Just goes to show how difficult it is to anticipate market downturns.

DG: Fair enough. The age in bonds is just a thumb rule which I think will be applicable to a lot of investors.

One quick point on the A/A debate: it’s very common for retail focused investors/advisors to talk about age. However, age is virtually useless to consider when managing a portfolio. I know, a very radical statement to make considering conventional “retail” wisdom. However, the only time consideration that matters is “when is the capital needed?” A 30 year old that needs to supplement his income from a portfolio that he inherited needs a more conservative A/A than a 70 year old that will never spend a penny of her portfolio. The 70 year old’ portfolio can have whatever A/A that’s required to provide the rate of return goal she’d like to achieve, as long as her volatility tolerance can accept the corresponding deviation. Therefore, time horizon matters, not age.

Just MHO

P.S. And as one person mentioned, I’d take the media in these cases with a huge grain of salt. That 70 year old can have been 100% small cap growth before the advisor changed the portfolio, or she could have been sold a high-commission inappropiate strategy…who knows?

Pretty sad.

CSC

What should one’s “long-term buy and hold approach to investing” expectation be for market gains? How did you arrive at that number?

If the investor had a larger portion than warranted in stock market indexes (doesn’t matter whether it was an ETF or active mutual fund), the comments would still apply. She took on too much risk and is now blaming the stock market (or ETF or mutual fund) for it. Instead she should (or have her advisor) write down a sensible asset allocation policy and stick to it.