Amanda, one thing to remember about your aunt is she won’t be redeeming all her investments in 5 years, that will only be the beginning of retirement years. She should hope for those investments to be in place for many years beyond that.

I’ve thought about this recently with my mother who has a lot of stock investment, including oil stocks inherited from her parents. My mother is 75 years old. She has other savings to give her income and has not had to sell any of her inherited stocks. She also takes stock dividends as cash for ongoing income. For her the market price of the stock is almost immaterial because she doesn’t plan to sell any of them. The dividends are what’s important, and oil stocks don’t seem to be having any problem paying those. A lot of people seem to like condemning “Big Oil” for being profitable companies, without recognizing that my mother and your aunt and their fellow shareholders are “Big Oil”.

@Kevin: Exactly my point. I was shocked to see that bond fund had only gone down 1.6%. Impressive considering the conditions.

@Philip: Yea, I’m currently 100% equities (except for our target retirement fund, which automatically has 10% bonds in it). Long, long term.

Nice example to illustrate why people should do such things. Hopefully the person who is in all stocks will not take it all out right now and they likely will only be using some of their savings for a few years and will be able to ride some of that 46% loss back up closer to the 750,000 mark.