[Jimbo232]

Here is a table offered by author Larry Swedroe, based on the 1970s bear market, showing the amount of decline for various stock/bond allocations:

Max Equity - Exposure Max loss
20%...............5%
30%..............10%
40%..............15%
50%..............20%
60%..............25%
70%..............30%
80%..............35%
90%..............40%
100%.............50%

This table gives you a worst case scenario for market declines. In general if your investments are for the "long term" you should invest in equities as your time horizon would allow you to weather the volatility of the stock market. Being forced to cash out to access your money at the heart of a decline would be a very undesirable circumstance.

What you classify as long-term savings is ultimately up to you. Personally, if I think I am going to be using the money in 5 years or less I keep it in a short term savings vehicle (i.e. online savings account) - this includes savings for a home down payment, an emergency fund, and money for a car purchase. Anything longer than 5 years (generally retirement savings) I'll invest in the stock market.

If you are young your retirement savings should be close to 100% equities with an increasing bond % as you age. This is another large discussion we can broach if you are interested.

Hope this helps.