A.I.M. Users Bulletin Board

[ls7550]

Fundamentally 50/50 is a good broad choice. If stocks do well they float you, if stocks perform poorly bonds float you. Thick or thing, expansion or contraction, likely that will do OK. Vanguard published a paper some time back highlighting the similarities in returns across periods of contraction and expansion for 50/50.

Whether you hold that in practice as a more 'conventional' 50/50, or go along Zvi Bodie type lines (he uses Options for 10x type scaling) ... is a matter of personal choice - whichever is the more cost/tax efficient.

https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=1985&firstMonth=1&endYear=2016&lastMonth=12&endDate=08%2F10%2F2016&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&showYield=false&reinvestDividends=true&symbol1=XIV&allocation1_1=10&symbol2=SPY&allocation2_2=50&symbol3=BND&allocation3_1=90&allocation3_2=50

PS Zvi Bodie likes 90% inflation bonds, 10% Options (LEAPS), which he considers to be 10x, so in practice he's more of a 100% long stock type position player. But if reviewed once yearly and if you count bonds as being safe, then your maximum single year loss is < 10% in nominal terms (assuming bonds earn a positive yield).