The Little Green Truck


Investment books mention the word "risk" a lot, but they seem to quickly introduce terms like beta and get rather wordy. While doing some other research I found that the Yahoo Finance section had information about a stocks best and worst years. I think the table below shows risk with nice simple numbers. How "risky" are stocks verses bonds? Check below.

Are you going to sell your stocks if the market drops 33% in one year? If yes, you should NOT have 100% of your portfolio in stocks. It has done this before, and will likely do so again.

How long is a long "downturn"? About 3 years it seems. Can your retirement account survive a 3 year period of time where it is still at -9%? If that is a problem, you should not be 100% in stocks.

Ticker Name Worst
1 Year
3 Year
VTSMX Vanguard Total Stock Market Index Fund Investor Shares (US) -37% -9% 1992
VGTSX Vanguard Total International Stock Index Fund Investor Shares -44% -7% 1996
VBMFX Vanguard Total Bond Market Index Fund Investor Shares (US) -3% +1% 1986