Has the Asset Allocation of Bogleheads changed?

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DaleMaley
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Has the Asset Allocation of Bogleheads changed?

Post by DaleMaley »

I was recently asked to update my historical results, and see if the AA of Bogleheads has changed over time.

Back in circa 2010, I researched and found several sources of AA versus age for large sample sizes. This led me to produce the following chart using this data:

Image

There is a generally accepted rule-of-thumb that says you should reduce your exposure to stocks as you age. I wanted to see if large groups of people actually did this in the "real world". As you can see in the above chart, people do generally tend to reduce their stock exposure as they age.

Using the 2015 Boglehead survey, I first plotted the age versus % stock data.........to get the R-squared, slope and intercept values:

Image

Once I got the slope and intercept values, I added them to the previous results:

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Then I plotted this table data:

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My conclusion is there has not been a major shift in the amount of risk Bogleheads take from 2007 until today. The amount of risk that Bogleheads take versus their age is similar to the other large sample size surveys (some use Vanguard customer data, some use TIAA-CREF data).

Thanks!
Most investors, both institutional and individual, will find that the best way to own common stocks is through an index fund that charges minimal fees. – Warren Buffett
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Rick Ferri
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Re: Has the Asset Allocation of Bogleheads changed?

Post by Rick Ferri »

Dale,

This is a good thing. The lessons of a long-term asset allocation only work if we remain long-term. Your analysis shows it's working.

Thanks!
Rick Ferri
The Education of an Index Investor: born in darkness, finds indexing enlightenment, overcomplicates everything, embraces simplicity.
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cfs
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Re: Has the Asset Allocation of Bogleheads changed?

Post by cfs »

Thanks.
My conclusion is there has not been a major shift in the amount of risk Bogleheads take from 2007 until today.
Thanks shipmate DM, good information.
~ Member of the Active Retired Force since 2014 ~
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