Lance-

Thanks for your comment.

The starting point is needs based planning: emergency liquidity portfolio funded with zero volatility investments such as money market funds, income portfolio (if needed) to fund 3-5 years of income (I prefer high yield stocks for lower initial investment and income growth), and long-term growth portfolio funded with truly active equity.

This approach gives the advisory the best opportunity to remove volatility from client discussions (this actually works as evidenced by the advsors we work with who use this approach).

The growth portfolio is long-term so has the opportunity to recover from short-term draw downs. And in the 200+ year history of the stock market, all draw downs, including the 50% one you mention, have been short-term and fully recovered.

An important role of the advisor is to help clients avoid making serious investing errors based on reacting to strong emotions. In other words, be an emotional coach.

Highlighting the very rare 50% drop is not a good start as an emotional coach. Not that this should never be discussed, but putting it in proper historical perspective helps reduce client fears.