Michael Batnick and Downtown Josh Brown are Live From The Compound to talk about a really simple way to figure out the optimal mix between stocks and bonds for individual investors – this is something everyone can do for themselves as a device to determine how much risk you can really stand.
By examining the drawdown vs returns history of a two-index portfolio, and looking at ten different incarnations of it, you can get an idea of how much downside IN DOLLAR TERMS you’d be able to live with during a worst case scenario market event.
Here’s that chart we posted in the video:
Read Michael’s post to see the chart we put up:
Un-Complicating Investing (The Irrelevant Investor)