Economy

either way he has to be worried. As I wrote in #17, my bond fund is down 21.8% in 3 years in purchasing power.

I think you are missing the part about IN THE FACE OF WITHDRAWALS AND INFLATION, and IN THE LONG RUN. Like the odds are very good that an equity portfolio will last longer than a fixed income portfolio over 20 years or more years IN THE FACE OF WITHDRAWALS AND INFLATION, according to historic experience and simulations that include withdrawals.

Yes, I get it, if one doesn't need the money and so doesn't have to withdraw any, then yes, money under a mattress or a money market account or CD will never go down in nominal value (although in purchasing power it will almost certainly, according to historical experience), whereas a stock fund has some risk of going down in the both the short run (high) and the long run - it can happen.

If one needs to make withdrawals of a few percent a year of the original amount, with the withdrawal amount growing with inflation, then the story is very different about which one is far more likely to last longer

Anyway, if you and the poster want to put your money in bond funds or CDs or money market accounts or whatever, you can. The economy depends on both kinds of investments.

I've never heard of a 401k, and certainly not an IRA that forces people to put their money in stocks. They all offer fixed income alternatives -- at least I've never heard of an exception.

Edited to add: As for union pension and state retirement funds and the like, yup, their equity part could suffer quite a haircut and periodically do. And we don't have personal choices in that. But these are long run investments, which, historically have done much better than fixed income investments, so I'm all for these funds having a sizable equity allocation. Even if $624,000 got cut by 57% as happened in the worst stock market pullback since WWII (housing bubble burst of 2007-2009), it would TEMPORARILY be cut down to $268,000 -- still far more value than the $45,000 bond investment (referring to post#25)..