Think twice before replacing your bonds with stocks

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Link: Think twice before replacing your bonds with stocks

Quote: “Think of watching your ‘capital’ drop for two years, seeing every dollar invested drop to less than 38 cents. How do you know that it won’t drop further? How do you stop yourself from selling out of fear that it will keep falling? The REIT index took more than four additional years for the price to climb back to its previous peak. That’s more than six years under water. Admittedly this kind of decline doesn’t happen often. But it will again at some point. And when it does, it will test all but the most disciplined investors.”