Part of what you are saying is a discussion people have and part of what you are saying may be a misunderstanding of how people are using words.Juice3 wrote: ↑Sun Feb 04, 2018 6:53 pmMy point was that pensions and annuities are Fixed Income investments. It is often more precise to look at an asset allocation as Equity/Fixed Income.dbr wrote: ↑Sun Feb 04, 2018 6:35 pmA pension or annuity is not a stock and bond portfolio asset, but the presence of such an income stream would certainly affect what stock and bond portfolio asset allocation a person might have. That obvious fact is one reason so many of the responses on this thread are verging on the snarky.
Sources outside of our wiki often talk asset allocation in terms of Equities, fixed income and cash for example:
https://www.investopedia.com/terms/a/as ... cation.asp
This board often states AA as stock / bond ... readers should note this is a simplification.
OP likely has a very high Fixed Income percentage as he stated his pensions covers his expected expenses.
The words part is that in usual discussions about asset allocation fixed income, bonds, bonds and cash, etc. etc. are all used for about the same thing, which is various investments that are not equities and generally have low risk and low return compared to equities. Trying to untangle what one person means by cash and another person means by fixed income and another person means by bonds is usually pointless. Even the Treasury has its own nomenclature as so called Treasury bonds can be bonds, notes, or bills except TIPS that are securities and savings bonds that are, well, savings bonds and not bonds. In any case the fixed income in those descriptions does not at all refer to actual income that is fixed, as in pensions and annuities. In the Investopedia article they are clearly using the term fixed income for bonds as distinct from cash. I can assure you that they are not referring to income payments that are fixed as the fixed income they are talking about.
A different issue is whether or not it is useful to capitalize income streams and create virtual fixed income holdings on that basis when figuring out asset allocations. For that one can refer to the frequent discussions of that topic that appear from time to time.