Comments on: The 100% Stock Portfolio: Why Not?

By: Mark Riddix

Mark Riddix — Tue, 02 Dec 2008 22:07:12 +0000

Do I think that the whole stock market will go to zero? of course not. I personally have most of my money in equities. But I do think that you can miss getting a return if stocks ever have another 10 year period like the past decade. Bond funds offer stable income during erractic times.

By: Finance Frenzy

Finance Frenzy — Tue, 02 Dec 2008 19:05:37 +0000

You do run a very large risk of not receiving any investment back at all if you are 100% in stocks. The last few years the stock market has been fluctuating significantly but really not going anywhere, causing some serious problems for people to be investing in the long run. The volatility of the market has been very disturbing.

By: Paul Williams @ Crackerjack Greenback

Paul Williams @ Crackerjack Greenback — Tue, 02 Dec 2008 14:27:00 +0000

I can answer your question about the difference between a 100% Stock portfolio and a 90% Stock portfolio.

For the 100% Stock portfolio from 1927-2007:
Geometric Mean Return = 11.4%
Arithmetic Mean (Average) Return = 14.0%
Standard Deviation (Measure of Risk) = 23.3%
Highest Single Year Return = 83.4%
Lowest Single Year Return = -50.3%
Sharpe Ratio (Measure of Return per unit of Risk) = 0.43

For the 90% Stock portfolio from 1927-2007:
Geometric Mean Return = 11.0%
Arithmetic Mean (Average) Return = 13.1%
Standard Deviation (Measure of Risk) = 21.0%
Highest Single Year Return = 75.5%
Lowest Single Year Return = -45.3%
Sharpe Ratio (Measure of Return per unit of Risk) = 0.43

Not much difference if you ask me, but not that detrimental either. If that little bit of extra volatility really bothers you, go with the 90% Stock portfolio.

By: Bob

Bob — Tue, 02 Dec 2008 14:23:24 +0000

Take a look at the Monetta Young Investor Fund.
An all stock fund that is exceeding the return of
the S&P 500 index by 10% this year. Innovative investment concept.