[zie]

While partially true, that "If you have better behavioral tolerance for volatility" is HUGE. Most people can not do this. Once they see their net worth go from $x to $x/2 or worse, they panic sell. People are emotional beings and it's very very hard to not let your emotions dictate what's going on.

If you haven't lived through a market panic and crash(last one in the US was 2008/2009), then chances are you shouldn't count yourself as being able to do it.

Also, their 100% equity time frames are measured in many lifetimes, not in a single lifetime.

If the goal is to have the biggest $ balance, then sure 100% equities for the win, but if the goal is to survive your retirement with little worry, 100% equities is a terrible idea.

Bonds provide stable cash flow. Equities provide growth/return. Use both in the appropriate amounts for your situation.

[throwaway2037]

    > Bonds provide stable cash flow. Equities provide growth/return. Use both in the appropriate amounts for your situation.

This is sound advice. I want to add some nuance about "bonds": Consider some broad categories: (1) regular gov't bonds, (2) inflation protected gov't bonds, (3) investment grade corporate bonds, and (4) high yield corporate bonds. In category (4), it is possible to get both cash flow and capital appreciation. It is the bond-equivalent of "stock picking".

[zie]

Indeed. Category #4 "high yield corporate bonds" are also known as "Junk bonds" because they kind of suck at the stable cashflow part, since they tend to go to $0 sometimes, much like stocks.

Technically when bonds "go to $0", you actually get priority over any corporate assets vs stock ownership, but if the bond went to $0, there is likely not a lot of assets left either. So you can't expect to get saved completely from whatever asset sale happens.

[throwaway2037]

Credit events (late payments, bankruptcy, etc.) for junk bonds are much less rare than people think. If there is bankruptcy, usually it is Chapter 11 which allows for re-org.

    > Technically when bonds "go to $0"

Extremely unlikely, unless there is massive accounting fraud. Recovery rates are on average about 45-55% (since 1987 according to research by S&P).

[zie]

> Recovery rates are on average about 45-55% (since 1987 according to research by S&P).

Exactly.