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Old 05-22-2011, 06:55 PM   #61
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Join Date: Feb 2011
Posts: 660
The "inevitability" of corrections and rebounds is more a confidence that they will occur borne of prior experience and a necessary expectation for anyone with belief in investing and dollar cost averaging.
I found a Forbes Calculator which estimates returns on various portfolio allocations and allows you to fix the expected rates of return and for the bond and equity portions. It also has a cash allocation. With my very conservative rates of return and splitting the "at risk" part of my portfolio at 60% equity/40% bonds (But lower percents of the total when accounting for cash) I played with different cash percentages. The returns only went up a little below 10% but dropped more above 15%. My conclusion for me is the risk withlower than 10% cash is not worth the slight gain in return.. And the lost return above 12% cash is not a trade off that I like.

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