[VertigoAtHome]

I use the bucket approach (i.e. harvesting plan) where you keep enough cash to fulfill your needs after you subtract guaranteed income streams. This allows you to stay invested through a bear market w/o being forced to sell. I've lived through the 2000 and the 2007 bear market and 7 yrs cash seems to be right. However I was somewhat surprised to see the S&P chart chassis posted that I believe shows inflation adjust returns. Once inflation is introduced it shows a 24 yr (68-92) period where you went nowhere in real terms and again a much longer period that I thought to recover from 2000 bear market. I don't know if dividends were included, but none the less, it shows what has happened and can happen in the future. I doubt I'll see that kind of inflation again in my lifetime and am comfortable using equities as a hedge against inflation but the chart is sobering.