What is YOUR bond/equity ratio compared to your age/horizon?

Have a question about your personal investments? No matter how simple or complex, you can ask it here.

What is your current equity/bonds ratio versus your age/horizon?

I do my age plus 10 in bonds.
17
29%
I am higher than my age plus 10 in bonds.
21
36%
I am higher than my age plus 10 in bonds.
21
36%
 
Total votes: 59

EmptyWallet
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What is YOUR bond/equity ratio compared to your age/horizon?

Post by EmptyWallet » Sat Mar 12, 2011 5:14 pm

I see tons of suggestions for all sorts of bond/equity ratios based on age, age minus 10, etc.

Of course it's subjective to each person, but what are YOU actually doing?

If you could list your age, or perhaps how long your horizon is until retirement, that would be greatly appreciated.

I am currently 90/10 equities/bonds.

I'm all in VGTR2045 (ticker VTIVX). I'm having serious thoughts of going all in VGTR2025 (ticker VTTVX), which would make me 75/25 equities/bonds.

I'm 29, and plan on retiring when I'm 65...hence why I picked VGTR2045 (ticker VTIVX). However, after looking under the hood...I'm not so sure that's where I should be.

I think a poll like this would actually see newbs such as myself and everyone else that is new to the board, that the members here actually practice what they preach.

NOT that there is anything wrong if you don't, everyone has special circumstances, I'm just really curious to see what everyone is doing.
Last edited by EmptyWallet on Sun Mar 13, 2011 11:00 pm, edited 2 times in total.

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alec
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Re: What is YOUR bond/equity ratio compared to your age/hori

Post by alec » Sat Mar 12, 2011 5:18 pm

EmptyWallet wrote:If you could list your age, or perhaps how long your horizon is until retirement, that would be greatly appreciated.


35 year old
20-25 years until retirement
50/50 stocks/bonds
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Post by Manbaerpig » Sat Mar 12, 2011 5:24 pm

i put roughly my age in bonds
i think commodities are mostly equivalent to bonds for this purpose, and REIT are mostly stocks

that being the case im 67/33

at age 37
I hope to retire in ~20 years

GammaPoint
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Post by GammaPoint » Sat Mar 12, 2011 5:25 pm

I'm 90/10 at age 28.

EmptyWallet
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Re: What is YOUR bond/equity ratio compared to your age/hori

Post by EmptyWallet » Sat Mar 12, 2011 5:25 pm

alec wrote:
EmptyWallet wrote:If you could list your age, or perhaps how long your horizon is until retirement, that would be greatly appreciated.


35 year old
20-25 years until retirement
50/50 stocks/bonds


Did you vote? Looks like you would have been the bottom selection.

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camper
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Post by camper » Sat Mar 12, 2011 5:31 pm

Both of us are age 30. 20% bond allocation.
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midareff
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lower

Post by midareff » Sat Mar 12, 2011 5:34 pm

63 with one year to retirement. Significant state pension + SS will cover my base living expenses. Besdides pensions will be 44% equities, 44% bonds, 8% REIT and 4% cash at that point for about a $1M portfolio.

Hope it helps.

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alec
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Re: What is YOUR bond/equity ratio compared to your age/hori

Post by alec » Sat Mar 12, 2011 5:35 pm

EmptyWallet wrote:
alec wrote:
EmptyWallet wrote:If you could list your age, or perhaps how long your horizon is until retirement, that would be greatly appreciated.


35 year old
20-25 years until retirement
50/50 stocks/bonds


Did you vote? Looks like you would have been the bottom selection.


Yeah, but apparently chose the exact opposite of what I should have. :oops: That's what I get for attempting to read the forum with kids yelling at each other. :D
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jbk
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Post by jbk » Sat Mar 12, 2011 5:43 pm

I'm 44, wife is soon to be 38 (don't tell her I mentioned it). We're at 80/10/10 (Equity, Bond, TIAA Real Estate). We both plan to retire around 65.

Jay

livesoft
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Post by livesoft » Sat Mar 12, 2011 5:44 pm

OK, I am in my early 50s. My horizon is my early 40s. So that ratio is say 50/40 or 1.25. My bond/equity ratio is 0.5.

The thread title suggests equity/bond ratio, but the poll question asks the inverse. Is that confusing or what?
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Post by RadAudit » Sat Mar 12, 2011 5:47 pm

63 and in retirement for six months. 50 / 50 stocks bonds. Horizon - 21.7 years (hopefully more) or at least that's what the government says is the average.

However, most of the time in the accumulation stage I was 70 / 30 stocks bonds and only in the last ten years did I go from 70 / 30 to 60 / 40 and then to 50 / 50 with about two years to retirement.
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bob90245
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Post by bob90245 » Sat Mar 12, 2011 5:49 pm

I follow Nobel Laureate, Harry Markowitz, the father of Modern Portfolio Theory:

I once asked Harry Markowitz, who shared the Nobel Prize in economics in 1990 for his mathematical explorations of the relationship between risk and return, how he diversified his portfolio.

Dr. Markowitz first got to choose how to divide his assets between a stock fund and a bond fund not long after publishing his pioneering article "Portfolio Selection" in the prestigious Journal of Finance. Following his own breakthroughs, he should have made intricate calculations, based on historical averages, to find the optimal trade-off between risk and return. But, Dr. Markowitz told me, that isn't what he did: "Instead, I visualized my grief if the stock market went way up and I wasn't in it -- or if it went way down and I was completely in it. My intention was to minimize my future regret."

Dr. Markowitz paused, then added wryly: "So I split my contributions 50/50 between bonds and equities."

Source: http://online.wsj.com/article/SB123093692433550093.html
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ourbrooks
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Post by ourbrooks » Sat Mar 12, 2011 6:13 pm

At age 70, I expect to go to 100% stocks. By that time, I'll have followed bob90245's approach and have enough income from pensions, Social Security and the single premium immediate annuities I plan on buying so that the main purpose of my portfolio will be to compensate for the effects of inflation on my pensions and to leave an estate. TIPS only protect themselves and bonds don't really keep up with inflation very well, so it has to be equities despite their risks.

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ruralavalon
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Post by ruralavalon » Sat Mar 12, 2011 6:19 pm

Both age 65 1/2
Just retired this year
50/50

No TIPS
No pension
No annuity
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Post by Chuck T » Sat Mar 12, 2011 6:40 pm

I am 65 and DW is 71. We are both retired. I have a pension and she has SS. We are currently 45/55 stocks/bonds. Our IPS says we should be 40/60. We will be 40/60 the next time I rebalance.
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Post by yobria » Sat Mar 12, 2011 6:55 pm

I'm 38, about 120% stocks including my mortgage as a negative bond. Might retire tomorrow, might retire in 30 years.

I also manage my mother's money - she's 62, I have her at 55/45 stock/bond. I expect to be about the same when I'm her age.

Nick

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Post by kyounge1956 » Sat Mar 12, 2011 7:07 pm

I am 55, plan to retire in a little over 2 years, with a DB pension, possibly a small SPIA (if I take a partial return of contributions from the pension fund) and eventually Social Security. I'll use my portfolio to supplement the above if some of my expenses turn out to be higher than expected, and to buy into a continuing care retirement community if I need/want to later in life. I don't plan ever to increase my equity allocation above 30%.

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Jake46
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Post by Jake46 » Sat Mar 12, 2011 7:08 pm

Age 64
Bonds 60%
Stocks 40%

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Post by bettykayWAAZ » Sat Mar 12, 2011 7:26 pm

I am retired, age 67. DH is 55 and works half the year. Morningstar xray says we are 51/25/20 bonds/us/foreign (rest in cash & other). Vanguard says we are 52/48 bonds/equities with 27 us and 19 foreign. I don't know why the difference, or if it matters.

Since finding bogleheads I've slowly increased my bonds. My top 6 funds (78% of my portfolio) are the basic three fund boglehead portfolio 58/23/16.

In addition to that I have some tilt (4), and some long time funds (4) that are doing well and I haven't yet let go of. This drops our bond % to the 51 in the first paragraph.

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steve roy
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Post by steve roy » Sat Mar 12, 2011 7:50 pm

58% bonds (60% Vanguard ST bonds; 40% VG TIPS)
42% stocks (value tilt -- 22% foreign.)

Age: 62

I have a relatively small position in VG Convertibles -- which I like, even though the cost is higher than most Vanguard funds. Vanguard informs me that they count convertibles as equities, even though Morningstar says they're all bonds inside the fund.

Anybody know why this is?

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Post by Sam I Am » Sat Mar 12, 2011 7:54 pm

Message deleted.
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Regal 56
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Post by Regal 56 » Sat Mar 12, 2011 7:58 pm

Age: 54

90/10 portfolio

Risk?

Pfft!

(Cue "Jaws" theme music.)

Lorraine
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Post by Lorraine » Sat Mar 12, 2011 8:24 pm

Age: me 61, husband 62 (both retired)

40/60 equities to bonds

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Post by travelerfromsj » Sat Mar 12, 2011 8:28 pm

Ages: me 47, hubby 53

70/30 equities to bonds, but we're thinking that's too high, since we may retire in a few years.

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chuck-lyn
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Post by chuck-lyn » Sat Mar 12, 2011 8:37 pm

I am 77 and have about 75% fixed income.

Cheers,

charlie

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Post by roranicus » Sat Mar 12, 2011 8:38 pm

Age 52
Bonds 45%

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Robert The Bruce
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Post by Robert The Bruce » Sat Mar 12, 2011 8:50 pm

We are 50 and 60% in bonds (including cash balance pension), 54% w/out pension. I have considered myself cautious for the last 15 years and so far it has treated me well. Those ratios (40/60% or 46/54%) fit my need for risk, especially if I am employed 6 more years.

My equities are 50/50 US/foreign.
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Post by TheEternalVortex » Sat Mar 12, 2011 8:52 pm

I am 75/25 and age 24. Although my age did not play into my choice of allocation.

Manbaerpig
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Post by Manbaerpig » Sat Mar 12, 2011 9:11 pm

TheEternalVortex wrote:I am 75/25 and age 24. Although my age did not play into my choice of allocation.



how can this statement be accepted logically, serious question

synergy
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Post by synergy » Sat Mar 12, 2011 9:17 pm

We are 62 and plan on working another 4 years when we will each be eligible for full SS. No pension. Will combine SS, an annuity and savings for retirement income.

30% equities, 60% bonds, 10% other fixed. I am worried about the possibility of a decline in bond value especially TIPS fund.

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Post by bmelikia » Sat Mar 12, 2011 9:18 pm

Age 26

95% stocks
5% bonds
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vonbraun
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no bonds

Post by vonbraun » Sat Mar 12, 2011 9:18 pm

a youngster should not be in bonds at all!
I am 100% equities at age 41. One needs to be clearing greater than 10% per year on your 401k or whatever, and bonds will be draggin your yearly gains down with such a long time horizon as the pollster. Run an investment calculator and you will see.
Get long VDE, and VOT 50/50 right now, and ride the lightning baby. When you need glasses and your knees hurt, then think about some bonds, but right now you need to be making mass dough. The trick is to keep a stop loss on your funds, and when they drop a certain % you go to cash. When you think the drop is over (like right now), get back in to the equities only and go go go.
just my 2 cents.

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Re: What is YOUR bond/equity ratio compared to your age/hori

Post by LadyGeek » Sat Mar 12, 2011 9:21 pm

EmptyWallet wrote:I'm all in VGTR2045. I'm having serious thoughts of going all in VGTR2025, which would make me 75/25 equities/bonds.

I'm 29, and plan on retiring when I'm 65...hence why I picked VGTR2045. However, after looking under the hood...I'm not so sure that's where I should be.

I think a poll like this would actually see newbs such as myself and everyone else that is new to the board, that the members here actually practice what they preach.
EmptyWallet is setting the asset allocation based on his/her level of acceptable risk, and then working backwards to find the target date retirement fund that matches. It's explained in the wiki: Vanguard Target Retirement Funds (see Choosing a Target Retirement Fund)

Post #1 is showing acronyms, not the ticker symbols - confusing. VGTR2045 is VTIVX, VGTR2025 is VTTVX, as shown here: Vanguard Target Retirement Funds

Wiki article link: Asset Allocation
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Re: What is YOUR bond/equity ratio compared to your age/hori

Post by EmptyWallet » Sat Mar 12, 2011 10:07 pm

LadyGeek wrote:
EmptyWallet wrote:I'm all in VGTR2045. I'm having serious thoughts of going all in VGTR2025, which would make me 75/25 equities/bonds.

I'm 29, and plan on retiring when I'm 65...hence why I picked VGTR2045. However, after looking under the hood...I'm not so sure that's where I should be.

I think a poll like this would actually see newbs such as myself and everyone else that is new to the board, that the members here actually practice what they preach.
EmptyWallet is setting the asset allocation based on his/her level of acceptable risk, and then working backwards to find the target date retirement fund that matches. It's explained in the wiki: Vanguard Target Retirement Funds (see Choosing a Target Retirement Fund)

Post #1 is showing acronyms, not the ticker symbols - confusing. VGTR2045 is VTIVX, VGTR2025 is VTTVX, as shown here: Vanguard Target Retirement Funds

Wiki article link: Asset Allocation


I can't tell if you're asking me a question, or explaining what I'm doing to another person....but I'm all about getting help! :D

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Post by CTBob » Sat Mar 12, 2011 10:25 pm

We're both 68 and retired. Maintaining 55/45 stocks/bonds.

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Post by sadie wess » Sat Mar 12, 2011 10:33 pm

livesoft wrote:OK, I am in my early 50s. My horizon is my early 40s. So that ratio is say 50/40 or 1.25. My bond/equity ratio is 0.5.

The thread title suggests equity/bond ratio, but the poll question asks the inverse. Is that confusing or what?


Yes. Confusing indeed.

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Post by S&L1940 » Sat Mar 12, 2011 10:38 pm

54% Bond
46% Stock
Age, 72 & 70
Retired, no pension

RMD's & Roth rollovers go to building the bond percentage
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Re: no bonds

Post by stevewolfe » Sat Mar 12, 2011 10:39 pm

vonbraun wrote:a youngster should not be in bonds at all!
I am 100% equities at age 41.


No offense but I think this is terrible and dare I say reckless advice. A 100% stock allocation is extremely aggressive. This can't possibly be put out as general purpose advice...

EyeDee
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Previous Surveys

Post by EyeDee » Sat Mar 12, 2011 10:57 pm

Randy

Matthew1
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Post by Matthew1 » Sat Mar 12, 2011 11:06 pm

Age: 37
Stocks: 65%
Bonds: 35%

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mcrunyan
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Post by mcrunyan » Sat Mar 12, 2011 11:18 pm

Age in bonds (37). Retirement 18 years away if things go smoothly.

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Re: What is YOUR bond/equity ratio compared to your age/hori

Post by y5a5gdqwty » Sat Mar 12, 2011 11:22 pm

EmptyWallet wrote:I'm all in VGTR2045. I'm having serious thoughts of going all in VGTR2025, which would make me 75/25 equities/bonds.


I have a similar dilemma, but have the following thoughts:

1. What about keeping VGTR2045, but adding Total Bond Market Index Fund to have the desired stock/bond ratio?

2. Keep VGTR2045 but also add a combination of other fine funds, like Target Date Income, Wellesley Income Fund, etc. Just make sure that the final mix provides the desired asset allocation.

What Bogleheads think about such strategy? Would it be inferior to just switching to VGTR2025?

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Post by letsgobobby » Sat Mar 12, 2011 11:56 pm

i am apparently "too conservative" and certainly more so than the board.

Age 37
Stock/bond 55/45*

*though I tactically allocate so was as high as 70/30 in mid 2009.

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pjstack
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Post by pjstack » Sun Mar 13, 2011 12:04 am

We are 50/50.

I'm 75 but my wife is 56, so 50/50 feels right.
pjstack

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Post by jidina80 » Sun Mar 13, 2011 12:15 am

I am surprised at the large number of respondents who are heavy in equities compared to their age. I am one of them, though.

My age is mid-50's, retired, and I am 60% equities and 40% bonds. This is a comfortable level for me because pension and social security income is expected to meet approximately half of my financial needs during retirement. Also, my asset level is comfortably above the bare minimum I needed to retire.

The "need to take risk" takes a backseat to "ability to take risk" in my thinking. Many semi-wealthy people are missing a great opportunity by going heavy on bonds.

Just.

EmptyWallet
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Post by EmptyWallet » Sun Mar 13, 2011 1:06 am

Morgan wrote:
sadie wess wrote:
livesoft wrote:OK, I am in my early 50s. My horizon is my early 40s. So that ratio is say 50/40 or 1.25. My bond/equity ratio is 0.5.

The thread title suggests equity/bond ratio, but the poll question asks the inverse. Is that confusing or what?


Yes. Confusing indeed.


I too was bamboozled for a moment.

Image


Yeah, I kinda fudged that, but I think most everyone got the picture. I appreciate you guys chiming in though with what you're doing. Looks like there is a heavy equity position with a lot people that voted, however, many people that posted seem to be more conservative.

EmptyWallet
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Re: Previous Surveys

Post by EmptyWallet » Sun Mar 13, 2011 1:10 am



Wow, so if I'm reading this right, a lot of people in the past few years according to those polls have been heavier in equities than their age.

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Post by Exuberent » Sun Mar 13, 2011 4:09 am

Me 58 wife 45 60 stocks / 40 bonds still working, no pensions ahead.

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Re: What is YOUR bond/equity ratio compared to your age/hori

Post by YDNAL » Sun Mar 13, 2011 5:41 am

EmptyWallet wrote:I see tons of suggestions for all sorts of bond/equity ratios based on age, age minus 10, etc.

Of course it's subjective to each person, but what are YOU actually doing?

I turned 59yo last month, DW is 55yo.

Our Stock/Bond split has nothing to do with age - it is just a ratio (0.515151 to follow livesoft's lead :) ) because of our plan. So, to answer your survey, EmptyWallet, our Bonds are Age+7 (average age) currently.

Like Bob in 90245 (and Markowitz), we were 50/50 pre-08/09 drop - with a goal of a Dollar ($) amount in Fixed Income and to manage the marginal utility of wealth. New contributions at 50/50 Stocks/Bonds have continued to pad the $ amount in Fixed, and the Equity/Bond ratio free-floats with the Stock Market - the ratio is expected to increase as we further age.
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Post by rai » Sun Mar 13, 2011 9:05 am

I am age (45) minus 20 in bonds.

plan to retire in 15 years with 60:40.
Last edited by rai on Sun Mar 13, 2011 9:44 am, edited 1 time in total.
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