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Friday, 12/14/2018 8:03:08 PM

Friday, December 14, 2018 8:03:08 PM

Post# of 19856
Well, now comes the moment of truth for the market - the Oct/Nov lows have failed, so next comes the test of key support (Feb-April lows). Better hope that holds or it could be a long way down.

Of course for the HDGE aficionados, that will be a time of glee and celebration, and too bad if the world unravels and we head into another Dark Age. But a recession won't be the end of the world, and even if Ice-9 comes, we will survive.

An interesting insight from that '60/40' asset allocation article I posted is that even if the stock market is cut in half, with a 60% Bond/40% Stock allocation, your portfolio would only be down 20% overall, and less if you have some Treasuries in the bond mix since Treasuries should rally.

If you use the Vanguard Total Bond Fund or ETF, they have 64% in US Govt bonds, and on the corporate bond side, 21% in bonds rated Aaa, Aa, and A, and less than 15% in corporates rated Baa, with zero rated under that.

I figure the 60% bond allocation will probably rally during a stock market meltdown, with the expected flight to quality/safety (Treasuries) and the Fed reversing course on interest rates. Add in a 10% gold and a sizable cash position, and a 50% drop in stocks shouldn't faze a conservative investor too much.
















































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