I am a retiree who has reverted to primarily passive index investing after trying stock picking and timing for six years. Going forward, I will hold roughly 2/3 of our portfolio in broad stock funds (SCHB, SCHF), retaining only JNJ as a permanent keeper pick. The remaining 1/3 will be in the SCHZ aggregate bond fund and a small CD. Brokerage cash holdings will be negligible. This is an allocation that my wife and I are comfortable with in our present circumstances. Along with Social Security and a pension to cover ordinary monthly expenses, it provides reasonable financial security while still growing a nest egg for our heirs. Furthermore, it is an approach that my wife, who has zero interest in market matters, could easily take over if I should die or become disabled. While I enjoyed the challenges of picking and timing, at least at first, I found that I was taking on much greater risk while still performing only roughly the same as my benchmark. More importantly, I was not improving. Perhaps this was because I am a dunce, but I would rather believe it was because stock picking and market timing are more matters of luck than skill. Put differently, I became convinced that the Efficient Market Theory is essentially correct. Except for rare and obvious instances of panic in the markets, there is no basis for distinguishing between fair value and current price. (Or if there is, I was never able to find it, and not through lack of trying over a reasonable test period.) Current price is an instantly traded assessment of all relevant publicly available information from thousands of traders and investors. So why should my take on fair value be superior to their collective assessment? Beats me, except in the rare case where the market is obviously in panic mode. Only then will I will move temporarily above my equity allocation.