Is 100% equities worth the risk?

For MAVENS and MOGULS by The Accumulator on April 7, 2026

A Monevator reader wrote, “I’m 100% invested in equities. I’m 56 and still think there’s time to accumulate and weather the roller coaster of global markets. Am I being foolish?”

I thought this was a brave and important question to ask. The query comes up a fair bit and speaks to a dilemma that many of us face.

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Maven
1 Alan S April 7, 2026, 12:14 pm

This is an interesting question. Three things to bear in mind are that a) there is often a run up before a severe crash (dot-com, Japan, and US in 1929) and b) new money invested after the crash will often have a good return (e.g., money invested in 2003 had a 100% return over the next decade or so) and c) that falling gilt yields meant that bond fund returns were pretty good during the dot-com crash.

You might be interested in DC part of my paper at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4473093, where I looked at three stock allocation glidepaths in accumulation (see Figure 4 in paper), 100% equities until 6 years before retirement with a reduction of 10pp per year until retirement (i.e., finishing at 40%) and two others approximating different ‘lifestrategy’ options. While this isn’t a systematic study of different glidepaths, a fast drop within the last 6 years did very well historically compared to most longer (and, not shown, shorter) glides (see Table 2).

I also note that ‘derisking with a purpose’ can be implemented by building an income floor (e.g., using an inflation linked gilt ladder) over the last decade or so of accumulation. Zwecher’s book (“Retirement Portfolios: Theory, Construction, and Management”) is, IMV, a useful read in this area (it was written not long after the GFC and reflects that, at the time, recent unpleasant memory).
Maven
2 zero more years April 7, 2026, 12:41 pm

Thanks @TA for another telepathically relevant piece, along with the derisking links. I’ve just moved one of my SIPPs into drawdown and sold down a small tranche of MMF to cash ready for my first flexible monthly withdrawal. Exciting times and your (and all at team Monevator’s) wisdom hugely appreciated on my FIRE journey.
Just to follow a thread from the weekend: Subscribe! It’s 250X cheaper (and is delivering me better results) than my long dispensed with IFA. DIY financial management – retirement side-hustle.

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Is 100% equities worth the risk?

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