Did you know that the S&P 500 is down 5% since year-end 1999? That’s not just price; I’m including dividends here. What an atrocious return. And for the privilege of losing 5% of your capital, you’d have had to endure two of the most severe bear markets in history with peak-to-trough declines of 50% or more.

Investors who retired at year-end 1999, at the height of the tech bubble, undoubtedly had too much invested in the stock market. The weekly asset allocation survey conducted by the American Association of Individual Investors showed that in January of 2000, investors were putting close to 80% of their portfolios in equities—a record high. When the bulk of financial assets held by individuals in the U.S. are owned by those in or nearing retirement, an 80% allocation to stocks is scandalous. And if the average was almost 80%, you can be sure there were more than a few investors with their entire portfolios invested in stocks.

If you retired at year-end 1999 with a $500,000 portfolio invested in the S&P 500 index and decided to withdraw a modest $20,000 annually, adjusted for inflation each year, you would have only $230,000 today. After adjusting for 10 years’ worth of inflation, your initial $20,000 withdrawal would now amount to $25,600 or a staggering 11% of your portfolio. You’re doomed. You could either maintain your withdrawal rate and quickly deplete your portfolio, or take a colossal pay cut of 65% to reset your withdrawal rate to a more sustainable 4%. Either way, you face financial ruin.

To avoid such a disastrous scenario, all retired and soon-to-be retired investors should take a balanced approach. Your portfolio should include significant fixed-income holdings, a healthy allocation of global dividend-paying equities, and—in the current inflation-prone environment—a meaningful amount of hard assets and hard currencies.