IDK when this board became "Igy vs the World", but here's something to consider: the important thing for Igy to do is to grow his money slowly while the market rises, and then convert those gains to equity holdings when it crashes.
Assuming for convenience neither invests any new money, and using returns from Jan 1, 2010 to Dec 31, 2018
2010: Igy has $10, could buy 10 stocks at $1 each but doesn't, buys CD's instead and gets, say, 3% annually
2019: Igy has $13.05
2010: market crashes 50%, Igy buys 9.67 stocks at $1.35 each
2010: Racket has $10, buys 10 stocks at $1 each, and markets rise 2.71x over the 9-year period
2019: Racket has 10 stocks at $2.70 each, with dividends having been reinvested
2010: market crashes 50%, Racket now has 10 stocks at $1.35 each
It's almost even, with Racket a bit ahead, although this does not factor in taxes and fees. Call it a draw, all things considered.
Point is, all it takes is one big event for Igy to have just as much cred as the markets--but that big event better happen soon, because if markets continue to rise, the Rackets of the world will pull ahead, and will end up ahead of the Igy's even if there is a 50% crash.
And until such an event, the Rackets are way ahead.
Such a future event is speculative, as were the past 9 years of market gains on Jan 1, 2010. It can be argued by each side that each occurrence is an historical certainty, with Igy's event having probably the greater degree of certainty of the two, since the current bull market is unprecedented.
Igy's is actually the conservative bet, but it relies on nothing have changed over history. I would argue that important things have actually changed, and are responsible for what we now have as the longest bull market in history. Such a bull market is unprecedented, and could not be predicted from historical patterns; similarly, the absence of a 50% crash around this point would be unprecedented, and would not be able to be predicted from historical patterns.
Lots of "if's". The Igy's NEED a 50% crash, and they NEED to convert all their cash holdings to equities when it happens, and right at the bottom--whereas the Rackets NEED to hold all their equities during a crash, but will have the benefit of having their full equity allotment at the absolute bottom. The Rackets have an advantage in that they can sell on the way down, and harvest some of their gains, assuming that they are paying attention and that the crash isn't absolutely immediate. Even if they harvest 10% of their gain and buy right at the bottom, they will come out substantially ahead.
The Rackets, who will harvest some gains, will do much better than will the morons, who in their best case scenario will just hold through the crash and do nothing.
Sorry Igy, but the bull market has gone on so long that this time, it doesn't look like you will come out ahead, even with a perfectly-timed total buy at the bottom of a 50% crash.
Of course there are many assumptions in this, and many things that I have left out. Just throwing it out there for sake of argument, because I am a hybrid--I was in for part of the run up, and while I have been out I have been making sure to work hard to match and exceed market gains, therefore I have gotten what I hope to be some of the good parts of both scenarios. I was in-and-out of lots of things, and therefore making gains but staying responsive with a short time horizon. Lately I have changed that and as we near a potential top, have just essentially been sitting in cash, waiting, but I do think about different investing scenarios and how they end up over a period of years. You can make more money in the long term, but it takes work.
So why are you guys continuing this back-and-forth? Nobody knows what will happen. Long-term history is on Igy's side, while new short-term history is on Racket's side. I suggest changing time horizons as a basis for discussion. Forget about positioning for super-speculative events, why don't you talk seasonal cyclicality, sectors, Fed activities, cost of money, and geopolitics over a shorter horizon like the quarter, or a month or two?