- Graham recommended distributing one's portfolio evenly between stocks and bonds as a way to preserve capital in market downturns while still achieving growth of capital through bond income. Remember, Graham's philosophy was first and foremost, to preserve capital, and then to try to make it grow. He suggested having 25% to 75% of your investments in bonds and varying this based on market conditions. This strategy had the added advantage of keeping investors from boredom, which leads to the temptation to participate in unprofitable trading (i.e. speculating).
I've been shifting over to bonds for a while now (currently sitting something like 70/30). Running the numbers on where I would have been if I hadn't started swinging towards bonds, I haven't missed out on much at all. The S&P is pretty flat since the January 2018 peak, and I'm in a safer position if a crash happens.
https://www.investopedia.com/articles/basics/07/grahamprinci...