Scooter57 wrote:If hr had sudden, very large unanticipated expenses at a time when stock prices were way down, could he cover them without having to sell the stock at a loss?
Scooter57's comment is probably among the most important considerations.
If all other assets were equities, any sudden need for cash, and they might be forced to "sell low".
(In the old days, they might have had a low-rate line of credit available, given the seasonal costs of farming. If that ever existed, it might have changed as all lending changed a few years ago.)
One purpose of bond/cash/other fixed income assets is that they can be used for unexpected (or expected) expenses, without worrying about whether one would need to sell equities during a "down" market.
This is another reason to keep some of the "fixed income" in good old cash. It's available immediately, without a loss.
This obviously doesn't apply to assets held in a 401k/403b that can't be accessed until separation, etc.
(Yes, there is the slow loss to inflation, but with current interest rates, and for a modest amount, that's not a huge concern given the security of "just in case".)