<p>When I was growing up no one had either cleaning or lawn services now almost everyone seems to have either one or the other.
It seems to me that large national companies and State wide utilities were employing most of the people in my area. I am not sure those jobs are available in the quantity they were in the past.</p>
<p>My retirement fund prices are moving up almost every day since I subscribed for daily price email notification a week ago.
When should I worry about price drop? The funds are in midcap growth, large cap growth, and equity index.</p>
<p>āWhen should I worry about price drop?ā</p>
<p>If someone on here has that crystal ball, Iād like to borrow it too.</p>
<p>I am talking about the economy trend. When I heard about bad news in economy and the risk of owning stocks couple years ago, I moved my funds to bonds then moved them back to stocks later. That helped my funds quite a bit. </p>
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<p>I think how much wealth is in how many people matters greatly. Throughout the history, social structure changed when material distribution changed. Would democracy have been possible without indurial revolution? </p>
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<p>I wondered about that, too. Is it because labor got cheaper with immigration? Or do people splurge in small luxuries? We also see small fancy items selling well.</p>
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<p>You shouldnāt take my advice as anything important, but I donāt see a reason why the stock market should crash in the near future. P/E is low right now but not extremely low. </p>
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<p>Fundamentally, productivity in agriculture and manufacturing has increased, so thereās more people available for service jobs. There didnāt used to be so many people available for those jobs so the cost would have been prohibitive, now itās now.</p>
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<li><p>If youāre still accumulating, you should not only not worry about a price drop, but hope for it. Itās better to buy shares on sale, right?</p></li>
<li><p>If youāre done accumulating and youāre worried about a price drop, your asset allocation is probably too aggressive. </p></li>
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<p>So, no worries 
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<p>^ Yes, my new contributions will not be large. And my asset allocation is agressive.</p>
<p>interesting article: <a href=ā5 Investing Myths May Stop You From Retiring On Timeā>http://finance.yahoo.com/news/5-investing-myths-may-stop-retiring-time-134550245.html</a></p>
<p>If you are aggressive then take some of the table, my husband has 50/50 AA, I have 36/64 AA from 40/60 AA. We still have large amount of cash in case the market drop.
On my private non IRA and non trading account, I stopped buying a while back, Iām full. Not selling but not buying either.</p>
<p>What does 50/50 AA mean?</p>
<p>AA stands for Asset Allocation. It usually means 50% bonds and 50% stocks, in my case 50% cash. But Iāve heard bonds did well recently.</p>
<p>Asset allocation? Stocks and Bonds? </p>
<p>Iām quite petrified with my portfolio. Other than the 529s which are all target and short term, and perhaps 20% in target 2020 funds, everything else we have is in equity index funds or etfs. I know I need to get out of this equity heavy model, but I feel so bad buying bonds with such low yields and the future potential has more of a downside if inflation rears its head.</p>
<p>@Dad<em>of</em>3, in a really bad year, bonds total return wonāt go down more than single digit percent. Thatās not fun, but itās nothing compared to equities which can easily go down 30%, 50% (90% in the Great Depression, but please, letās not have than). If nothing else, owning bonds provides some powder to fuel a rebalancing.</p>
<p>People differ about AA, but a 20% bond .80% equities portfolio will typically return as much as a 100% equities portfolio, but with lower volatility. </p>
<p>As Benjamin Graham said: āthe proportion held in bonds be never less than 25% or more than 75%.ā</p>
<p>I have had Benjamin Grahamās book on my night table for years. I guess I will have to read it because an</p>
<p>80/20 allocation does not equal a 100/0 allocation. </p>
<p>I thought I talked about this before. I am glad I made such an impact. :)</p>
<p><a href=āhttp://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/histretSP.htmlā>http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/histretSP.html</a></p>
<p>If stocks return 9 percent a year and bonds return 6 precent a yearā¦</p>
<p>Stocks are going to double in 8 years and bonds in 12 years.</p>
<p>If a person has $100,000 in stocks and makes 9 percent compounded for 12 years that person will have $281,266. I am not looking at taxes.</p>
<p>If another person allocates $80,000 in stocks (9 percent compounded) and $20,000 in bonds (6 percent compounded) ā¦that person will have $265,256 or $15,010 less. </p>
<p>If we are talking $1,000,000ā¦</p>
<p>The difference is $150,100 after 12 years.</p>
<p>Benjamin Graham looked at over valuations to allocate between bonds and stocks and I dont know what he would decide today with a 10 year note at 2.4 percent or so and the S&P PE at ?</p>
<p>We know that 10 year notes bought today and held to maturity are not going to yield 6 percent a year for 10 years.</p>
<p>Dont know stocks future returnsā¦</p>
<p>^^ I remember what you said. You always make an impact 
. However, youāre not rebalancing in your example. </p>
<p>It goes without saying that 9% returns are higher than a blend of 9% and 6% returns without rebalancing. 9% returns are not a straight sloping line; there will be peaks and troughs. The bonds are for purchasing more equities when equities are down and are replenished when equities are up. </p>
<p>Okā¦so how do you rebalance when both bonds and stocks are up and when do you rebalance?</p>
<p>I started reading the BGraham book and the forward was written by John Bogle. It is a little premature but it looks like BGraham changed his mind many times over the years on valuations. :)</p>
<p>I have the wrong book. I have the Intelligent Investor book instead of the Security Analysis book. I hope the Intelligent Investor book will suffice. :)</p>
<p>bob, I think thatās what the Vanguard guy told me too.
dstark, I also have the Intelligent Investor in the garage. Right now Iām the non-Intelligent Investor.</p>