CY09 portfolio

[CityFarmer]

So yes, a bear market and severe market plunge will test everyone's process, and also everyone's mettle and resolve.

IIRC, VB was incepted in 2010 and its 'only major' crisis to date was the Euro and US fiscal fiasco that seemed to be like ages ago. Looking forward to the interesting REAL time case studies in VB that will present itself when depression hits (especially on what happens to those who are adamant to be 100% invested at all times as their stock picking/diversification or whatever competitive moat they believe to possess, will provide the hedge...in other words, my question is 'what would be your emotional hedge?)

I am probably one of those highlighted, who are "adamant to be 100% invested"

I have gone thru the 2008/2009 cycle, with portfolio value slumped to half. I am glad I survived, and have a good feel on what a crisis like

Emotional hedge? Good point raised...Hmm...

If u r fully invested. It will be trying to sleep with half portfolio down won't it be ? Would having significant portion in some fixed returns help buffer this emotional impact ?

Will you sleep well with portfolio value downed by half?
I slept well during the last crisis, and continue to buy with new money. I don't know why I slept well. I guess may be the conviction that the vested companies wouldn't bankrupted due to the crisis, although I had no idea when was the recovery then.

Why not buffer the emotional with fixed income allocation?
I don't brush off the merit of asset-allocation on different asset classes. I started off with WB's style, then Peter Lynch's. Both believe in equities over fixed incomes. Why not buffer the emotional with it? I guess I have more emotional issue, with the opportunity cost of fixed income, over crisis. One is a sustained pressure, while the other is one in a long while.