Bond returns

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doglover
Posts: 6
Joined: Sat Jan 05, 2013 9:49 am

Bond returns

Post by doglover »

With all I am trying to learn about 3-fund portfolios, and with everyone on CNBC and elsewhere talking about the "ending" bull market in bonds, is it truly wise to place such a high percentage of a portfolio in these bond funds?
am
Posts: 4233
Joined: Sun Sep 30, 2007 9:55 am

Re: Bond returns

Post by am »

"Bond market crash" (if it ever occurs) will be magnitudes less than your typical stock market crash. I use high quality bonds (total bond market) to cushion the volatility and potential losses of my stock portfolio. I do not have high expectations for bond returns, but if they happen than it is a bonus. I will stay the course with my 3 funder.
dbr
Posts: 46181
Joined: Sun Mar 04, 2007 8:50 am

Re: Bond returns

Post by dbr »

doglover wrote:With all I am trying to learn about 3-fund portfolios, and with everyone on CNBC and elsewhere talking about the "ending" bull market in bonds, is it truly wise to place such a high percentage of a portfolio in these bond funds?
What high percentage of portfolio in bonds? A young investor might hold 20% in bonds. An older investor as much as 60%. What are you talking about in your case?

No doubt it is wise to recognize that bond returns going forward may not be large. Thinking that there will be permanent losses of 10's% in bonds is simply not so. You can assume that there will be 10's% losses in stocks at various points in time though most probably not permanent.

What is your understanding of the role of bonds in your portfolio?
chaz
Posts: 13604
Joined: Tue Feb 27, 2007 1:44 pm

Re: Bond returns

Post by chaz »

" An older investor as much as 60%."

I have 65%.
Chaz | | “Money is better than poverty, if only for financial reasons." Woody Allen | | http://www.bogleheads.org/wiki/index.php/Main_Page
kayo
Posts: 60
Joined: Sat Aug 18, 2012 9:54 pm

Re: Bond returns

Post by kayo »

doglover wrote:With all I am trying to learn about 3-fund portfolios, and with everyone on CNBC and elsewhere talking about the "ending" bull market in bonds, is it truly wise to place such a high percentage of a portfolio in these bond funds?
I am looking forward the big bond crash. When it happens I will buy more bonds.
Call_Me_Op
Posts: 9881
Joined: Mon Sep 07, 2009 2:57 pm
Location: Milky Way

Re: Bond returns

Post by Call_Me_Op »

kayo wrote:
doglover wrote:With all I am trying to learn about 3-fund portfolios, and with everyone on CNBC and elsewhere talking about the "ending" bull market in bonds, is it truly wise to place such a high percentage of a portfolio in these bond funds?
I am looking forward the big bond crash. When it happens I will buy more bonds.
With what? What if stocks are down at the same time? You may only be able to use cash for this.
Best regards, -Op | | "In the middle of difficulty lies opportunity." Einstein
kayo
Posts: 60
Joined: Sat Aug 18, 2012 9:54 pm

Re: Bond returns

Post by kayo »

Call_Me_Op wrote:
kayo wrote:
doglover wrote:With all I am trying to learn about 3-fund portfolios, and with everyone on CNBC and elsewhere talking about the "ending" bull market in bonds, is it truly wise to place such a high percentage of a portfolio in these bond funds?
I am looking forward to the big bond crash. When it happens I will buy more bonds.
With what? What if stocks are down at the same time? You may only be able to use cash for this.
Via the same methods I use to buy bonds and equities today:
1. Biweekly payroll deductions
2. Monthly distributions from income funds
3. Other distributions that come my way

I just keep buying. I don't know any better.
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