7% returns

In his January 5, 2009 article Portfolio Rebalancing - Don't Ignore Duration, John Hussman provides a good explanation of portfolio strategies with stocks, Treasury bonds and cash.

Given the probable long-term returns that stocks and Treasury bonds are priced to deliver, an investor seeking a 7% long-term total return would currently require an allocation of about 60% in stocks and 17% in bonds, for an overall portfolio duration of about 21 years

effective duration for the S&P 500 Index (which turns out to be essentially the price/dividend ratio). ... at a dividend yield of 1.7%, stocks have a duration of nearly 60 years. At a dividend yield of 4%, stocks have a duration of just 25 years.... the appropriate allocation to stocks is inverse to their valuation.

need to know : portfolio duration, rebalancing, passive investing, market valuations, market cycle, dividend yields