Poll: What is your Bond Allocation %?

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.

What is your bond allocation %?

I don't hold bonds, regardless of my age
21
4%
My age - 45+ (most risky)
15
3%
My age - 40
6
1%
My age - 35
12
2%
My age - 30
23
4%
My age - 25
36
7%
My age - 20
63
12%
My age - 15
74
14%
My age - 10
100
19%
My age - 5
47
9%
MY AGE IN BONDS
72
13%
My age + 5
20
4%
My age + 10
22
4%
My age + 15
9
2%
My age + 20
8
1%
My age + 25
1
0%
My age + 30
3
1%
My age + 35
1
0%
My age + 40
1
0%
My age + 45+ (most conservative)
1
0%
 
Total votes: 535

JustinR
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Poll: What is your Bond Allocation %?

Post by JustinR » Mon Aug 13, 2012 2:42 am

This is a more comprehensive poll to see where Bogleheads stand in practice in regards to the age-in-bonds rule of thumb. It's arranged from riskiest to most conservative, and if you input the wrong answer the first time, you can re-vote. Feel free to elaborate on your answer in the comments if you wish.

  • Even if you don't follow an age rule for bonds, please select the answer closest to your allocation.
  • If you currently have 0% in bonds, but it's in relation to your age, please select the age-appropriate answer (and NOT "I don't hold bonds"). For example, if you're 30 years old and your strategy is "Age - 40", select that as your answer.
  • Similarly, if you're 65 years old (for example), but your allocation strategy was "Age + 40", please select that answer even if the total would be over 100%.
Rounding:
3-7 = 5
8-12 = 10
etc.



Frequently Asked Questions:

1. Why didn't you include voting options for static percentage allocations?
  • The point is to see what people's allocations are relative to their age, whether or not they follow an "age in bonds" type rule. If your strategy is to have a static percentage throughout your entire life, please try to find an average percentage from the available options that best represents your lifetime strategy.

2. Are you looking for a "snapshot" of this particular moment, or long-term strategy?
G-Money wrote:Just to clarify, you just want a snapshot at this particular momen, right? So, if an investor was 32 and held only a Vanguard Target Retirement fund (which holds a constant AA until the investor is 40, then increases bonds at a rate of around 1.5% per year), you'd only want to know that the investor was presently Age-22 in bonds now, even though that same investor would be Age-30 in bonds in 8 years, Age-10 in 28 years, Age-2 in 40 years, and Age-20 in 58 years (assuming he/she planned to stay in the same fund and the glide path remained the same as it is today?

My point is simply that lots of people may increase their bond allocation at a rate greater than or less than 1% per year.
  • In priority:

    1. Your main lifetime asset allocation strategy. The asset allocation you will have in your Investment Policy Statement.

    2. If your age-in-bonds type strategy isn't completely linear (like if the increase is some sort of curve, or maybe you don't control the allocation), then some sort of average lifetime allocation strategy. Like say you were Age-30 right now at age 30, and you plan on ending up at Age-in-Bonds by the time you're 65, then you might answer "Age-15"

    3. If the above still doesn't apply to you and you're all over the place with no average, then a current snapshot will do. Hopefully only a few edge cases will be like this.

    Basically, whatever represents your investment strategy the best should be your answer.
Last edited by JustinR on Mon Aug 13, 2012 11:03 am, edited 10 times in total.

Johm221122
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Re: Poll: What is your Bond Allocation %?

Post by Johm221122 » Mon Aug 13, 2012 2:53 am

I don't use age in bonds now, but my investment plan has me getting there with each milestone and all time high

xerty24
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Re: Poll: What is your Bond Allocation %?

Post by xerty24 » Mon Aug 13, 2012 4:47 am

I don't hold bonds at today's rates, but if I wanted to I'd buy a CD or a muni.
Last edited by xerty24 on Fri Oct 12, 2012 9:06 pm, edited 1 time in total.
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G-Money
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Re: Poll: What is your Bond Allocation %?

Post by G-Money » Mon Aug 13, 2012 5:38 am

Just to clarify, you just want a snapshot at this particular momen, right? So, if an investor was 32 and held only a Vanguard Target Retirement fund (which holds a constant AA until the investor is 40, then increases bonds at a rate of around 1.5% per year), you'd only want to know that the investor was presently Age-22 in bonds now, even though that same investor would be Age-30 in bonds in 8 years, Age-10 in 28 years, Age-2 in 40 years, and Age-20 in 58 years (assuming he/she planned to stay in the same fund and the glide path remained the same as it is today?

My point is simply that lots of people may increase their bond allocation at a rate greater than or less than 1% per year.
Don't assume I know what I'm talking about.

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Cernel
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Re: Poll: What is your Bond Allocation %?

Post by Cernel » Mon Aug 13, 2012 5:52 am

I voted for "Age - 10" given that I included my 5% Cash position which is invested in a CDs.

So the math works out like this: Age 60 with a Bond allocation of 45% and a Cash allocation of 5% for a total of 50% Bond/Cash. Thus the Age-10.

JustinR
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Re: Poll: What is your Bond Allocation %?

Post by JustinR » Mon Aug 13, 2012 5:56 am

G-Money wrote:Just to clarify, you just want a snapshot at this particular momen, right? So, if an investor was 32 and held only a Vanguard Target Retirement fund (which holds a constant AA until the investor is 40, then increases bonds at a rate of around 1.5% per year), you'd only want to know that the investor was presently Age-22 in bonds now, even though that same investor would be Age-30 in bonds in 8 years, Age-10 in 28 years, Age-2 in 40 years, and Age-20 in 58 years (assuming he/she planned to stay in the same fund and the glide path remained the same as it is today?

My point is simply that lots of people may increase their bond allocation at a rate greater than or less than 1% per year.
In priority:

1. Your main lifetime asset allocation strategy. The asset allocation you will have in your Investment Policy Statement.

2. If your age-in-bonds type strategy isn't completely linear (like if the increase is some sort of curve, or maybe you don't control the allocation), then some sort of average lifetime allocation strategy. Like say you were Age-30 right now at age 30, and you plan on ending up at Age-in-Bonds by the time you're 65, then you might answer "Age-15"

3. If the above still doesn't apply to you and you're all over the place with no average, then a current snapshot will do. Hopefully only a few edge cases will be like this.

Basically, whatever represents your investment strategy the best should be your answer.
Last edited by JustinR on Mon Aug 13, 2012 11:04 am, edited 3 times in total.

NYBoglehead
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Re: Poll: What is your Bond Allocation %?

Post by NYBoglehead » Mon Aug 13, 2012 6:00 am

Not a market timer, but at the same time I think it is prudent to scale back on adding more bonds while the yields are paltry and the dividend yields for TSM and S&P 500 aren't that far behind 30-yr Treasury bonds.

I'll maintain a slightly more aggressive portfolio until better yields come back, I've got 30+ years before to go before taking out a single dime.

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englishgirl
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Re: Poll: What is your Bond Allocation %?

Post by englishgirl » Mon Aug 13, 2012 6:14 am

I hold a static bond allocation (or at least, I plan that it will be static for approximately 30 years). Sorry, but I don't think that asking me to come up with some complicated averaging strategy so I can fit within your age minus whatever answers is going to give you any meaningful picture. That does not represent my investing strategy at all. And I can see where some people will answer with a "snapshot" type answer and some will average, so it's going to skew the results. Besides, it's way too much effort!
Sarah

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Re: Poll: What is your Bond Allocation %?

Post by Rajsx » Mon Aug 13, 2012 6:16 am

I keep 5-6% of the fixed portion in money market, so for 56 yrs I have 50% in Bond Funds and 6% in Money Market .

Best regards
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Doc
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Re: Poll: What is your Bond Allocation %?

Post by Doc » Mon Aug 13, 2012 8:37 am

NYBoglehead wrote:Not a market timer, but at the same time I think it is prudent to scale back on adding more bonds while the yields are paltry and the dividend yields for TSM and S&P 500 aren't that far behind 30-yr Treasury bonds.

I'll maintain a slightly more aggressive portfolio until better yields come back, I've got 30+ years before to go before taking out a single dime.
Interesting. Because yields are so paltry you are going to a more risky portfolio. For the very same reason I am going to a less risky portfolio by shortening the duration of the bond part of our portfolio. Its probably an age thing.

Regards,

OLD Doc

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G-Money
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Re: Poll: What is your Bond Allocation %?

Post by G-Money » Mon Aug 13, 2012 9:09 am

See this prior thread, which put the results from 2007 and 2011 in both graph and chart form: http://www.bogleheads.org/forum/viewtopic.php?p=1217243

My AA is "Age/125" in bonds, +/- 5% based upon my sense of valuations. So, at 30 it would be about Age-5 in bonds. At 60, more Age-10 in bonds. At 75, Age-15. At 90, Age-20. I'll choose Age-15 for the poll because the time-weighted value of my portfolio, etc., probably gets pretty close to that, but it's more a guess than anything else.
Don't assume I know what I'm talking about.

NYBoglehead
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Re: Poll: What is your Bond Allocation %?

Post by NYBoglehead » Mon Aug 13, 2012 9:13 am

Doc wrote:
NYBoglehead wrote:Not a market timer, but at the same time I think it is prudent to scale back on adding more bonds while the yields are paltry and the dividend yields for TSM and S&P 500 aren't that far behind 30-yr Treasury bonds.

I'll maintain a slightly more aggressive portfolio until better yields come back, I've got 30+ years before to go before taking out a single dime.
Interesting. Because yields are so paltry you are going to a more risky portfolio. For the very same reason I am going to a less risky portfolio by shortening the duration of the bond part of our portfolio. Its probably an age thing.

Regards,

OLD Doc

Doc,

Definately an age thing. Wouldn't recommend it for someone closer to retirement, but with 30+ years to go, I am willing to take the risk. Will add more bonds a few years down the road, I've got enough runway left in my accumulation phase to correct a short-term period of uber-aggression. Not worried about seeing my portfolio go down 50% and selling out, didn't do it in 2008/2009 and won't do it the next time either.

Sam I Am
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Re: Poll: What is your Bond Allocation %?

Post by Sam I Am » Mon Aug 13, 2012 9:36 am

Message deleted.
Last edited by Sam I Am on Tue Oct 08, 2013 10:27 am, edited 1 time in total.

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leonidas
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Re: Poll: What is your Bond Allocation %?

Post by leonidas » Mon Aug 13, 2012 9:40 am

Roughly 50%. My age is 42. I have been as high as 75% as recently as 2007. I am more conservative in my old age.

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Re: Poll: What is your Bond Allocation %?

Post by Sunny Sarkar » Mon Aug 13, 2012 9:46 am

Retirement portfolio only: Age-10
All portfolios (529, emergency funds included): Age

Fun fact: My daughter's 529 (time frame: 10yrs) has less in bonds than our retirement portfolio (time frame: 25-30yrs).
"Cost matters". "Stay the course". "Press on, regardless". ― John C. Bogle

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Aptenodytes
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Re: Poll: What is your Bond Allocation %?

Post by Aptenodytes » Mon Aug 13, 2012 9:50 am

I'm one of those that scales the "age-minus" number over time, as most of the target-date funds do. I chose an average number, but people with identical strategies will get different averages based on their current age. So for people like me our results are just not comparable in this poll.

Still, the overall results are informative, and reinforce the general pattern I have observed which is that the most common advice that is given on this forum is age-in-bonds, but the most common practice among forum members is less conservative than that.

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FabLab
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Re: Poll: What is your Bond Allocation %?

Post by FabLab » Mon Aug 13, 2012 10:15 am

Don't really have an age+ or age- predisposition regarding bond allocation. At 63, I'm at a 50/50 equities/bonds allocation and plan to stay that way for the long run.
The fundamental things apply as time goes by -- Herman Hupfeld

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Jake46
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Re: Poll: What is your Bond Allocation %?

Post by Jake46 » Mon Aug 13, 2012 10:20 am

Age 65 Bonds 65%

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JupiterJones
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Re: Poll: What is your Bond Allocation %?

Post by JupiterJones » Mon Aug 13, 2012 10:42 am

That's a tricky one. Our portfolio "belongs" to both me and my wife, and she's younger than I.

So my current target bond allocation is my age minus 18, but it's her age minus 10.

I averaged it out and rounded and picked "age minus 15" as the answer.

JJ
Stay on target...

gkaplan
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Re: Poll: What is your Bond Allocation %?

Post by gkaplan » Mon Aug 13, 2012 12:03 pm

Let me get my calculator out.
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trico
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Re: Poll: What is your Bond Allocation %?

Post by trico » Mon Aug 13, 2012 12:07 pm

Age 60 bonds 80. Fear trade.

ThatGuy
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Re: Poll: What is your Bond Allocation %?

Post by ThatGuy » Mon Aug 13, 2012 12:10 pm

=MIN(0.4, 1-COS((YEAR(TODAY())-$BIRTHYEAR)*PI()/180),1-(LOG10(100-(YEAR(TODAY())-$BIRTHYEAR))-1))
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jlj
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Re: Poll: What is your Bond Allocation %?

Post by jlj » Mon Aug 13, 2012 12:25 pm

Thatguy, you have produced and amazingly simple formula. Must have been a misprint but the next-to-last factor you listed as
())-$BIRTHYEAR)) should actually be ())+$BIRTHYEAR)).
You must be one of those 3-fund guys advocating simplicity.

ThatGuy
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Re: Poll: What is your Bond Allocation %?

Post by ThatGuy » Mon Aug 13, 2012 12:49 pm

Bah, I screwed up the log part. I was trying to shoe-horn (off the top of my head) in the concept of a cosine based age in bonds and a log based age in bonds that I had read on the wiki some time ago. Now, I can't seem to find a reference to them. At any rate, I figure the third term should LOG10(YEAR(TODAY())-$BIRTHYEAR)-1.

If one were to add birth year to the year today, that wouldn't give us an age based rule of thumb :D

Besides, if I have to hold only 3 funds, I'll get my tinkering in somehow darnit!
Work is the curse of the drinking class - Oscar Wilde

gkaplan
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Re: Poll: What is your Bond Allocation %?

Post by gkaplan » Mon Aug 13, 2012 2:09 pm

Twenty-eight percent in fixed income at age sixty-nine. Next year, I'm increasing my allocation to thirty-four percent fixed income and the following year to forty percent fixed income.
Gordon

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Munir
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Re: Poll: What is your Bond Allocation %?

Post by Munir » Mon Aug 13, 2012 2:48 pm

I wonder if the responses would be significantly different between the categories of retirees (or over age 65) and those still working. I assume retirees would be more conservative.

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Re: Poll: What is your Bond Allocation %?

Post by woof755 » Mon Aug 13, 2012 3:23 pm

My age in bonds, short-term and TIPS. Higher than what I would normally recommend, but I have a small value tilt.
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555
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Re: Poll: What is your Bond Allocation %?

Post by 555 » Mon Aug 13, 2012 4:07 pm

ThatGuy wrote:=MIN(0.4, 1-COS((YEAR(TODAY())-$BIRTHYEAR)*PI()/180),1-(LOG10(100-(YEAR(TODAY())-$BIRTHYEAR))-1))
Graph, please!

555
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Re: Poll: What is your Bond Allocation %?

Post by 555 » Mon Aug 13, 2012 4:08 pm

I follow a glide path that does not take the form "bond allocation percentage = AGE%/yr minus a constant".

I did vote for what best fits now.

555
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Re: Poll: What is your Bond Allocation %?

Post by 555 » Mon Aug 13, 2012 4:16 pm

JustinR wrote:
G-Money wrote:Just to clarify, you just want a snapshot at this particular momen, right? So, if an investor was 32 and held only a Vanguard Target Retirement fund (which holds a constant AA until the investor is 40, then increases bonds at a rate of around 1.5% per year), you'd only want to know that the investor was presently Age-22 in bonds now, even though that same investor would be Age-30 in bonds in 8 years, Age-10 in 28 years, Age-2 in 40 years, and Age-20 in 58 years (assuming he/she planned to stay in the same fund and the glide path remained the same as it is today?

My point is simply that lots of people may increase their bond allocation at a rate greater than or less than 1% per year.
In priority:

1. Your main lifetime asset allocation strategy. The asset allocation you will have in your Investment Policy Statement.

2. If your age-in-bonds type strategy isn't completely linear (like if the increase is some sort of curve, or maybe you don't control the allocation), then some sort of average lifetime allocation strategy. Like say you were Age-30 right now at age 30, and you plan on ending up at Age-in-Bonds by the time you're 65, then you might answer "Age-15"

3. If the above still doesn't apply to you and you're all over the place with no average, then a current snapshot will do. Hopefully only a few edge cases will be like this.

Basically, whatever represents your investment strategy the best should be your answer.
It seems the average should be dollar weighted and also weighted by the probability you'll be alive at each future time.

Alternatively you could take each Target Retirement fund series (e.g. all Vanguard's TRF's) and take the dollar weighted average (based on fund assets) of 65-(target year - current year)-bond allocation percentage, though you'd need to know the age demographics of the Vanguard Target Retirement Income fund.

Also you could take the radius and multiply by sqrt(pi).

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Re: Poll: What is your Bond Allocation %?

Post by FrugalInvestor » Mon Aug 13, 2012 4:22 pm

I voted, but using my and my wife's average ages since there's a bit of a difference. But even that is not particularly important as I hold a 50/50 mix and will likely do so for some time to come.
IGNORE the noise! | Our life is frittered away by detail... simplify, simplify. - Henry David Thoreau

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Re: Poll: What is your Bond Allocation %?

Post by mickeyd » Mon Aug 13, 2012 5:44 pm

My age 67; DW is 4 years younger. We have been at 40% FI for about 5 years and plan to continue at that mix for the unforeseen future. Having 3 pensions as well as SS gives us more room to invest in equities.
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Re: Poll: What is your Bond Allocation %?

Post by abuss368 » Mon Aug 13, 2012 7:05 pm

I selected age less 10.

Down the road, I will tighten it up to age in bonds.
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Re: Poll: What is your Bond Allocation %?

Post by yukonjack » Mon Aug 13, 2012 8:06 pm

I'm at age minus 10 if you count bonds and cash. It would be more like age -17 with just bonds. And since about half of the cash is about to go into equities my number will get a little more risky.

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Re: Poll: What is your Bond Allocation %?

Post by grabiner » Mon Aug 13, 2012 8:14 pm

Rather than holding 0% bonds, I have chosen to hold 10% bonds and increase the risk of the stock portion of my portfolio, overweighting small-cap, value, and emerging markets.

I am 44, so I answered Age-35, but I expect to stay 10% bonds for at least ten more years.
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Re: Poll: What is your Bond Allocation %?

Post by yukonjack » Mon Aug 13, 2012 10:00 pm

grabiner wrote:Rather than holding 0% bonds, I have chosen to hold 10% bonds and increase the risk of the stock portion of my portfolio, overweighting small-cap, value, and emerging markets.

I am 44, so I answered Age-35, but I expect to stay 10% bonds for at least ten more years.
Where do expect your bond allocation to be in 10 years?

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Re: Poll: What is your Bond Allocation %?

Post by grabiner » Mon Aug 13, 2012 10:07 pm

yukonjack wrote:
grabiner wrote:Rather than holding 0% bonds, I have chosen to hold 10% bonds and increase the risk of the stock portion of my portfolio, overweighting small-cap, value, and emerging markets.

I am 44, so I answered Age-35, but I expect to stay 10% bonds for at least ten more years.
Where do expect your bond allocation to be in 10 years?
It will likely still be 10%, and thus Age-44, and at that time, I may start thinking about what to do with my allocation given the prospects of retirement.
Wiki David Grabiner

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Re: Poll: What is your Bond Allocation %?

Post by 555 » Mon Aug 13, 2012 10:11 pm

grabiner wrote:
yukonjack wrote:
grabiner wrote:Rather than holding 0% bonds, I have chosen to hold 10% bonds and increase the risk of the stock portion of my portfolio, overweighting small-cap, value, and emerging markets.

I am 44, so I answered Age-35, but I expect to stay 10% bonds for at least ten more years.
Where do expect your bond allocation to be in 10 years?
It will likely still be 10%, and thus Age-44, and at that time, I may start thinking about what to do with my allocation given the prospects of retirement.
Are there possible future circumstances where you would consider a sudden jump in bond allocation?

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grabiner
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Re: Poll: What is your Bond Allocation %?

Post by grabiner » Mon Aug 13, 2012 10:17 pm

555 wrote:
grabiner wrote:
yukonjack wrote:Where do expect your bond allocation to be in 10 years?
It will likely still be 10%, and thus Age-44, and at that time, I may start thinking about what to do with my allocation given the prospects of retirement.
Are there possible future circumstances where you would consider a sudden jump in bond allocation?
As with most investors, I would change allocation plans only because of a change in my needs. I could become disabled, or married, or change jobs.
Wiki David Grabiner

555
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Re: Poll: What is your Bond Allocation %?

Post by 555 » Mon Aug 13, 2012 10:34 pm

grabiner wrote:
555 wrote:
grabiner wrote:
yukonjack wrote:Where do expect your bond allocation to be in 10 years?
It will likely still be 10%, and thus Age-44, and at that time, I may start thinking about what to do with my allocation given the prospects of retirement.
Are there possible future circumstances where you would consider a sudden jump in bond allocation?
As with most investors, I would change allocation plans only because of a change in my needs. I could become disabled, or married, or change jobs.
The case I was thinking of is if one has a risky allocation, and after a while it does well, and you decide you have "enough", and so you then decide to lock in gains by jumping to a much more conservative allocation.

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Re: Poll: What is your Bond Allocation %?

Post by dimideme » Tue Aug 14, 2012 7:15 am

I currently use Age - 15 in bonds, resulting in an 85/15 portfolio. I'd really like to change to a slightly less aggressive Age - 10 allocation (80/20), because I'd prefer to have a larger pool to draw from when stocks fall and I need to rebalance, but I'm not comfortable moving so much money into bonds at the moment. I'm thinking that I'll keep my current AA until interest rates start to rise and bond funds start to lose value, at which point I'll slowly transition to Age - 10 (80/20), over the course of a year or so. Does this seem like a reasonable plan, or would you call it market timing?

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Re: Poll: What is your Bond Allocation %?

Post by JustinR » Tue Aug 14, 2012 7:48 am

Right now, with 261 votes, the mean is at "Age - 9" in bonds.

Compare to previous polls: 1 2
  • Bogleheads 2007: Age - 13
    Bogleheads 2011: Age - 6
    Bogleheads 2012: Age - 9
This reaffirms the fact that Bogleheads themselves in practice do not follow the age-in-bonds guideline. I'm not actually suggesting it be changed, but just as a thought I wonder if the Boglehead philosophy should ever be changed to reflect a recommendation of Age-10 in bonds, if indeed most Bogleheads follow something closer to that.

What do you think?
Last edited by JustinR on Wed Aug 15, 2012 11:06 am, edited 2 times in total.

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Re: Poll: What is your Bond Allocation %?

Post by Sheepdog » Tue Aug 14, 2012 10:17 am

There was a similar survey in February 2009. Compare then with now. http://www.bogleheads.org/forum/viewtop ... 11&t=32694
It's not what you gather, but what you scatter which tells what kind of life you have lived---Helen Walton

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Re: Poll: What is your Bond Allocation %?

Post by Sbashore » Tue Aug 14, 2012 10:23 am

I didn't vote because my bond allocation has nothing to do with my age. It has to do with how much volatility risk I want my portfolio exposed to.
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Grt2bOutdoors
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Re: Poll: What is your Bond Allocation %?

Post by Grt2bOutdoors » Tue Aug 14, 2012 10:27 am

Currently running at age-10 after the most recent rebalance. Still higher and holding steady after we re-reviewed our risk tolerance back in 2008.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

Khanmots
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Re: Poll: What is your Bond Allocation %?

Post by Khanmots » Tue Aug 14, 2012 10:45 am

JustinR wrote:Right now, with 210 votes and over 24 hours after the poll began, the mean is at "Age - 9" in bonds.

Compare to previous polls: 1 2
  • Bogleheads 2007: Age - 13
    Bogleheads 2011: Age - 6
    Bogleheads 2012: Age - 9
This reaffirms the fact that Bogleheads themselves in practice do not follow the age-in-bonds guideline. I'm not actually suggesting it be changed, but just as a thought I wonder if the Boglehead philosophy should ever be changed to reflect a recommendation of Age-10 in bonds, if indeed most Bogleheads follow something closer to that.

What do you think?
I think that bogleheads aren't the typical investor. Understanding the risks tends to allow one to better tolerate taking them. Recommending age in bonds as the starting point for those that don't have this level of understanding (most new folks) seems quite reasonable to me.

Besides, it's far better to err on the side of too conservative than on the side of too aggressive; the consequences of the former are minor compared to what can result with the latter.

dbr
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Re: Poll: What is your Bond Allocation %?

Post by dbr » Tue Aug 14, 2012 11:03 am

JustinR wrote:Right now, with 210 votes and over 24 hours after the poll began, the mean is at "Age - 9" in bonds.

Compare to previous polls: 1 2
  • Bogleheads 2007: Age - 13
    Bogleheads 2011: Age - 6
    Bogleheads 2012: Age - 9
This reaffirms the fact that Bogleheads themselves in practice do not follow the age-in-bonds guideline. I'm not actually suggesting it be changed, but just as a thought I wonder if the Boglehead philosophy should ever be changed to reflect a recommendation of Age-10 in bonds, if indeed most Bogleheads follow something closer to that.

What do you think?
I think that advising any particular asset allocation as a generalization is NOT Boglehead advice.

I do not believe that Mr. Bogle ever meant that each and every investor should follow such a simplistic rule literally to the number. I also believe this "rule" was meant to illustrate a concept of taking a more conservative allocation as one ages, using a simple numerical scheme to demonstrate what that might mean. I also think there is a live dilemma about what Mr. Bogle really means to say about applying that rule before of after income streams are capitalized, which makes a huge difference in the actual investment plan. I suspect that once again this statement was intended to illustrate a concept rather than to impose an iron rule.

I am more impressed by the "Boglehead" advice of Benjamin Graham that stock/bond allocation should be between 25/75 and 75/25.

I do not think that plus or minus 10 or 15 points from a norm is a meaningful discrepancy in this case anyway.

jlj
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Re: Poll: What is your Bond Allocation %?

Post by jlj » Tue Aug 14, 2012 11:38 am

JustinR -- thanks for taking the time to put this poll together. It has been valuable to me to see how other bogleheads invest. I think you have achieved your stated goal of "The point is to see what people's allocations are relative to their age." I will keep checking your thread as new responses come in.

MachAF
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Re: Poll: What is your Bond Allocation %?

Post by MachAF » Tue Aug 14, 2012 9:06 pm

JustinR wrote:Right now, with 210 votes and over 24 hours after the poll began, the mean is at "Age - 9" in bonds.

Compare to previous polls: 1 2
  • Bogleheads 2007: Age - 13
    Bogleheads 2011: Age - 6
    Bogleheads 2012: Age - 9
This reaffirms the fact that Bogleheads themselves in practice do not follow the age-in-bonds guideline. I'm not actually suggesting it be changed, but just as a thought I wonder if the Boglehead philosophy should ever be changed to reflect a recommendation of Age-10 in bonds, if indeed most Bogleheads follow something closer to that.

What do you think?
I don't think you can come to that conclusion. There could be more people joining who are older. That might explain the change from -12 to -9. In order to know if your hypothesis is correct you would need to know everyones age and corresponding bond percentage. With this poll you don't get that information.

I don't think age minus a certain number is a good recommendation. It all depends on your time horizon, current assets, and risk tolerance. With bond rates being so low over the recent past, I don't think they have much appeal.

I voted Age-20 for whats its worth.
Last edited by MachAF on Tue Aug 14, 2012 11:45 pm, edited 1 time in total.

JustinR
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Re: Poll: What is your Bond Allocation %?

Post by JustinR » Tue Aug 14, 2012 10:24 pm

MachAF wrote:
JustinR wrote:Right now, with 210 votes and over 24 hours after the poll began, the mean is at "Age - 9" in bonds.

Compare to previous polls: 1 2
  • Bogleheads 2007: Age - 13
    Bogleheads 2011: Age - 6
    Bogleheads 2012: Age - 9
This reaffirms the fact that Bogleheads themselves in practice do not follow the age-in-bonds guideline. I'm not actually suggesting it be changed, but just as a thought I wonder if the Boglehead philosophy should ever be changed to reflect a recommendation of Age-10 in bonds, if indeed most Bogleheads follow something closer to that.

What do you think?
I don't think you can come to that conclusion. There could be more people joining the forum in their 20's and 30's, thus have a long time horizon, therefore less bond allocation. In order to know if your hypothesis is correct you would need to know everyones age and corresponding bond percentage. With this poll you don't get that information.

I don't think age minus a certain number is a good recommendation. It all depends on your time horizon, current assets, and risk tolerance. With bond rates being so low over the recent past, I don't think they have much appeal.

I voted Age-20 for whats its worth.
This particular poll doesn't ask for age, but the previous ones I linked did:

http://www.bogleheads.org/forum/viewtopic.php?p=1217243

Image

I'm pretty sure most of people on here are older folk. Either way, it doesn't look like people get that more conservative relative to their age the older they get. I do agree that Age in Bonds is a simple, solid recommendation, even if it's not practiced by most Bogleheads.

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