How Long Does it Take to Recover From a Crisis?

[Kanto]

This is a subject that always fascinated me.

https://outline.com/9zYPnC

https://www.boringmoney.co.uk/quick-rea ... o-recover/

Assuming you are globally diversified it seems like over 1-2 years you can usually expect equities to recover after a downtown. Couldn`t you maintain a 100% equities portfolio through retirement with relative security?

Maybe keeping 2 years' worth of savings in cash, and replenish that pool by selling 3-4% of your holdings a year?

[RetireJapan]

That's my plan.

[seb]

It seems the general consensus is something like 25x yearly expense with 2x yearly expenses years as cash (or bonds). That works to about 90% equities, 10% cash, actually.

So to me it seems that it's the same final portfolio.

[TJKansai]

90/10 sounds pretty good to me, although I think I am more like 85/15 at the moment.


The link the OP posted has some good advice, although over the last 5 years I have been putting money into Japanese equities and been rewarded recently.

In the late 1980s Japan experienced a so-called asset bubble that pushed its stock market and property prices up to astronomical levels. The inevitable slump lasted twenty years and turned into an enduring deflationary recession. On 29 December 1989, Japan’s Nikkei Stock Average finished the year at an all-time high of 38916. Today – after a period of recovery - it still only sits at 21610. The lesson? Don’t put all your eggs in one basket.