pjw- "Over an 18 yr (or 22 if you include the years in college) are you really going to be invested 100% in stocks? There is significant risk by remaining in 100% stocks right up until the time the money is needed for college"
reply- No, I never said to be invested 100% up until withdrawal. I think i advocated the opposite by giving the enron example and how bdn's friends were foolish by not diversifying their investments.
pjw- "In addition, an entire 100% stock portfolio, with only 5 yrs to go, had a 1 in 4 chance of underperforming the risk-free rate, not to mention the tuition inflation rate. So I don't think it is appropriate to use one number (90% for 18 yr window). "
reply- pjw, I don't believe you are understanding the 'long term' return percentages in that article. It is appropriate to use the 90% # because it's 90% OVER 18 YEARS, NOT OVER 5 YEARS. You have to assume when you have 5 years left that stocks outperformed by such a margin to outweigh the downturn (if any) in the final 5 years. The point again is that there will be peaks and valleys during the investment cycle, however as the chart shows, you have an overwhelming chance of doing very well w/equities (diversified of course).