atDev wrote:I am currently 30 years old and have about 20% of my portfolio in BND (Vanguard Total Bond Market ETF).
Does anyone have any thoughts on my current exposure when considering the current low interest rates? I am considering lowering my exposure due to how low rates are (and have been) and the possibility of those rates rising.
I wouldn't recommend this. Stocks have higher expected returns than bonds, but you chose not to hold 100% stock, probably because you don't want the risk of a 100% stock portfolio (few investors do). If you reduce your bond exposure and buy more stocks, you will increase the risk of your portfolio.
You could also reduce your bond exposure and buy other types of fixed income, such as CD's, I-Bonds (which track inflation and can be redeemed after one year with little penalty), or a stable value fund if your 401(k) offers one. In this case, you wouldn't be changing the risk of your portfolio much, so the question is whether the new bond options have a better risk-return trade-off.