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Originally Posted by Cut-Throat
Well, if I understand what you are saying is that since I believe that if you stay in the market long enough (30-40 years) my returns will be positive. And that if the market is a proxy for the economy, you believe that the U.S. economy could be in a recession for 30-40 years!
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The rule of thumb is that the market returns GDP growth - 2% over the long term. If we simply extrapolate our past growth to the future, the gurus I mentioned believe that we're looking at maybe 6% nominal, right? That doesn't factor in any long-term economic slowdown. The CBO estimates that the retirement of the baby boomers *alone* will knock 2% off of our forward GDP growth. So, that 6% becomes 4%. And that doesn't factor in anything else, such as the changing character of our economy from manufacturing to services, the enormous debt burden, etc. You only need to look to Japan and Germany to see how demographics affects market returns, but they don't have our debt burden and other factors.
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What I was hoping you would give me is your prediction of a conservative number for estimating say a 50/50 portfoilo?
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The problem I have with that is that the bond component is predictable. It's whatever your bonds yield is. The stock market portion of that has a wide range of outcomes. As an investor, you should characterize risk as something like:
1) What are the possible outcomes
2) What is the probability of each outcome
3) What is the seriousness of each outcome
4) What can I do to mitigate the risk, and what is the potential cost of that mitigation
It's not as simple as saying that the most likely outcome is X% over Y years. What I think people universally tend to underweigh is the seriousness of the low-probability outcomes. And that's the sort of thing that would keep me up at night. As a retireee, I strive to be worry free. 
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