28 Years Old: In the current market, what % into bonds?

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TheHouse7
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Re: 28 Years Old: In the current market, what % into bonds?

Post by TheHouse7 » Sun Dec 17, 2017 12:33 pm

YoungPup26 wrote:
Fri Dec 15, 2017 10:55 pm
Thank you all so much for quick responses and advice. It seems I'm at least not out of bounds with what I have currently and maybe could be a bit more aggressive. Someone suggested reading some books and I have done some of that but it's been a while. When I first started teaching I happened upon "Millionaire Teacher" by Andrew Hallam. I seem to remember him saying something about buying more of his bond funds when the stock market was going gangbusters but maybe I am mis-remembering that. I have also read Bogle's "The Little Book of Common Sense Investing" but I should probably go back and read that again as well.

Thanks again, everyone!

JT
Please read this quick page someone gave on this site to me:

https://portfoliocharts.com/2016/07/25/ ... tion-plan/

After reading plenty of interesting points of view, I'm 80/20 at 30. Warning: the more you learn the less the AA will matter.

(It has to do with accumulating as much as you can and sticking with one AA avoiding fees.)
"PSX will always go up 20%, why invest in anything else?!" -Father-in-law early retired.

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ruralavalon
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Re: 28 Years Old: In the current market, what % into bonds?

Post by ruralavalon » Sun Dec 17, 2017 12:45 pm

At age 28, 26% in bonds is well within the range of what is reasonable in my opinion.

Keep making your regular $250 contributions every two weeks. Increase your contributions if that is practical for you. Keep your contribution rate as high as you can comfortably sustain. That's probably the most important thing that you can do at age 28 and just beginning.

If market moves throw the asset allocation far off what you want, say by 5% or more (for example to 21% or 31% bonds), then adjust back to your desired asset allocation.
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Daedalus
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Re: 28 Years Old: In the current market, what % into bonds?

Post by Daedalus » Sun Dec 17, 2017 6:51 pm

I'm 27 currently and I'm still at 100/0. I wouldn't mind adding 5-10% in bonds to my portfolio (possibly in January in my Roth IRA), just for the future ease of adjusting asset allocation. But with such a long horizon for investing, being so high in equities doesn't bother me. I don't necessarily need the added mental security of bonds at the present time. If we enter a bear market soon, I'll be happy to buy "discounted" equities for a few years knowing they will grow immensely in the following bull market.

james865
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Re: 28 Years Old: In the current market, what % into bonds?

Post by james865 » Sun Dec 17, 2017 8:57 pm

I'm 90/10 in early 30's.

Didn't have bonds until I turned 30. I weathered the 08/09 fine and purchased all the way down. Granted my net worth was much less at that time, but I hope to have the same instincts for the next crash.

In addition, I also know that I don't need to get 10% in the market with my savings rate to hit my retirement goal, thus I don't need to be 100% equities. I've calculated my returns at a conservative 5%.

johnbarry
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Re: 28 Years Old: In the current market, what % into bonds?

Post by johnbarry » Sun Dec 17, 2017 10:42 pm

31: AA is 100/0. High job security and planning to retire at 70 or 75.

Already exposed to international stocks (incl emerging markets), but only 15% of portfolio. Ideally I'd like to take even more risk than 100% stocks; anyone have advice on how best to do that esp. with the 401k?

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peterinjapan
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Re: 28 Years Old: In the current market, what % into bonds?

Post by peterinjapan » Sun Dec 17, 2017 10:43 pm

I'm 90/10 equities and bonds and I'm about to turn 50. I'll tell you later whether I was genius or stupid.

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CaliJim
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Age in Bonds is a good rule of thumb

Post by CaliJim » Sun Dec 17, 2017 10:55 pm

bmritz wrote:
Fri Dec 15, 2017 7:42 pm
To get a feel for the relative risk vs. returns, here is a table from Vanguard of historical returns in the past 91 years.

Keep in mind that the table only tracks gains/losses for 91 calendar years. Gains and losses within 1 year periods can be larger than this table shows, because they might occur across two consecutive calendar years, or the portfolio may swing back the other direction before Dec. 31.

Image
In terms of investor behavior.... the most important column in this chart is the "worst" year. A 100% stock portfolio declines by 43% in the worst year. A 50%/50% portfolio only goes down ~22%. What would you do if one year your portfolio tanks to almost half in value? Most all folks would be depressed, many would panic and sell. UGH!

Most folks are better off saving themselves from bad behavior by holding between 25% and 75% in bonds.

Once the average investor has the actual experience of being invested through a severe recession or two... then maybe the average investor will be ready to stay the course with a stock allocation greater than "age in bonds". The rest are well advised to do "age in bonds". Even though it may "leave money on the table", it is an antidote to the temptation to sell in a panic.
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