Re-balance IRA Question - Need Help!

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nepatriots1
Posts: 4
Joined: Tue Dec 12, 2017 9:14 pm

Re-balance IRA Question - Need Help!

Post by nepatriots1 »

Hello! I'm looking to re-balance my IRA after a nice run up in my equity portion and need to get back to a 70/30 as I'm 87/13. I'm a big fan of low cost index funds, invest long term (~20yrs to retirement) and want a simple portfolio of 70 equity and 30 bonds/something!

As much as I don't want to do bonds given high probability of interest rate rise/risk, is this what I should invest in?

Given I'm in for the long term, does it still make sense to still take a bond portion? I'm just looking to fill this 30% bucket with something more conservative to balance out my portfolio.

Thanks in advance - really appreciate some feedback!
mhalley
Posts: 10424
Joined: Tue Nov 20, 2007 5:02 am

Re: Re-balance IRA Question - Need Help!

Post by mhalley »

In the short term, the nav of the bond funds will decrease if interest rates rise, but you will then have increased yields, and when you buy new shares they will have the higher yield. As long as you will be holding them for the long term, having all your bonds in tbm is fine.
https://investornews.vanguard/for-bondh ... an-upside/
rkhusky
Posts: 17654
Joined: Thu Aug 18, 2011 8:09 pm

Re: Re-balance IRA Question - Need Help!

Post by rkhusky »

nepatriots1 wrote: Tue Dec 12, 2017 9:18 pm As much as I don't want to do bonds given high probability of interest rate rise/risk, is this what I should invest in?
Bond rates have been predicted to go up for years and, even though they have gone up a little the past year or so, we've not seen any catastrophic results. In fact, I love getting more than 1% on my money market account at Vanguard. Think of it this way: stocks are way over-priced and are due for a correction. When that happens your bonds will be more valuable. So get into bonds now while the getting is good and sell your stocks while they are at all time highs.

But most important: Stick with your plan. You will lose more by changing your portfolio every time the wind blows, than you will gain by getting lucky and timing the market once correctly.
Topic Author
nepatriots1
Posts: 4
Joined: Tue Dec 12, 2017 9:14 pm

Re: Re-balance IRA Question - Need Help!

Post by nepatriots1 »

Thank you both for the feedback, this is helpful!
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