Investing During Stock Market Downturns

[Here is my companion piece to this post.](https://www.reddit.com/r/Bogleheads/comments/1qi1uxb/revisiting_2008_to_2011_and_portfolio_performance/?utm_source=share&utm_medium=web3x&utm_name=web3xcss&utm_term=1&utm_content=share_button) [A user friendly version of the graphic.](https://docs.google.com/spreadsheets/d/1goVmwqwZexCoqEKinChv9QjTkIRNG2S9XbPp5jb72sA/edit?gid=2032421018#gid=2032421018) That post discussed what happened during the 2008 to 2011 timeframe, which is oft discussed on these boards. It compared the performance of static portfolios with five different asset allocations, a 100% VTI portfolio, and 90/10, 80/20, 70/30, and 60/40 VTI/BND combinations. This post will discuss investing through downturns. The question often comes up--like with the recent turmoil regarding a certain individual--whether one should keep investing, even seeing the storm clouds on the horizon. IMO, the answer is yes. To illustrate, using the adjusted prices supplied by Yahoo Finance for VTI and BND, I did simulations of an investor investing $500 monthly, into 100% VTI and the four VTI/BND combinations. 1. The first graph is the adjusted stock price, adjusted for splits and dividends. By using the adjusted price over time, the estimated total return can be computed. The graph uses a ratio of the monthly stock price for VTI and BND compared to the beginning price for 1/1/2008. At the end of 2011, the VTI adjusted price was about 97% of the VTI beginning price and BND was 127% of the beginning BND price. At the low point on 3/9/2009, VTI was down 52% from the price as of 1/1/2008 on this adjusted basis. 2. The second section shows the value at the four year ends assuming $500 invested monthly--$24,000 total--monthly from 1/1/2008 until 12/31/2011. The graph shows the 100% VTI, the 60/40, and the total invested. As the graph shows, during the drop--centered on the bottom of 3/9/2009--the investor was underwater, even with the portfolios including bonds. The 60/40 invest