Ok reasons for a 37 year old to have a 60/40 mix?

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BashDash
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Ok reasons for a 37 year old to have a 60/40 mix?

Post by BashDash » Mon Jun 12, 2017 11:29 am

1) Helps me sleep at night easily.
2) If the stock allocation was higher ( 70/30 or 80/20 ) I don't feel confident on when in my life I would change it to a lower stock allocation.
3) I do feel confident holding 60/40 through a major downturn.
4) I do feel comfortable doing a change to 40/60 on year of retirement ( accompanied by a pension. )
5) I don't want to use a Vanguard target fund that includes international bonds which also carries a higher expense.
6) I feel it gives me exposure to the equity market while still giving me a smooth ride with the bonds.

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Re: Ok reasons for a 37 year old to have a 60/40 mix?

Post by mcraepat9 » Mon Jun 12, 2017 11:30 am

Those are all excellent reasons
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fire5soon
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Re: Ok reasons for a 37 year old to have a 60/40 mix?

Post by fire5soon » Mon Jun 12, 2017 11:32 am

Not too far from age in bonds either. Don't feel pressured to do what everyone else does. It's your money.
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Re: Ok reasons for a 37 year old to have a 60/40 mix?

Post by albanytexan » Mon Jun 12, 2017 11:35 am

I feel the same way at 29. I feel I'm off to a good enough start and don't feel comfortable at 80/20 or something typically recommended for my age. 60/40 just feels better to me

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Re: Ok reasons for a 37 year old to have a 60/40 mix?

Post by letsgobobby » Mon Jun 12, 2017 11:48 am

welcome to the club.

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Re: Ok reasons for a 37 year old to have a 60/40 mix?

Post by mhalley » Mon Jun 12, 2017 11:50 am

I have seen some pundants state that a sixty percent allocation is suitable for everyone, cradle to grave. There have been some articles that say it is dead, others call it timeless. Peter Bernstein called it the center of gravity for investing.
http://web.archive.org/web/200612140619 ... in6040.pdf

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Re: Ok reasons for a 37 year old to have a 60/40 mix?

Post by livesoft » Mon Jun 12, 2017 11:59 am

In this post, I did a Portfolio Visualizer run comparing an 80/20 LifeStrategy fund and a 60/40 LifeStrategy fund for the 20-year time frame 1995 to 2015. The difference was about 0.2% CAGR per year. Ha!
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Re: Ok reasons for a 37 year old to have a 60/40 mix?

Post by BogleAlltheWay » Mon Jun 12, 2017 12:19 pm

Number 1 is enough for me. Allocation is personal decision. Target funds and age recommend allocations are made for everyone, but everyone has different goals and amount of money they want.

An extreme example, I like to use:
If you could bet $100 on a coin flip and receive $500 for a win, almost everyone would do it.
If you could bet your live savings on a coin flip and receive 5X your life savings, almost no one with significant savings would do it.

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Re: Ok reasons for a 37 year old to have a 60/40 mix?

Post by Fallible » Mon Jun 12, 2017 12:22 pm

BashDash wrote:1) Helps me sleep at night easily.
2) If the stock allocation was higher ( 70/30 or 80/20 ) I don't feel confident on when in my life I would change it to a lower stock allocation.
3) I do feel confident holding 60/40 through a major downturn.
4) I do feel comfortable doing a change to 40/60 on year of retirement ( accompanied by a pension. )
5) I don't want to use a Vanguard target fund that includes international bonds which also carries a higher expense.
6) I feel it gives me exposure to the equity market while still giving me a smooth ride with the bonds.
If you understand the importance of the "sleep test," you probably need go no further to confirm your 60/40 allocation. But everything you've listed also confirms it as being right for you. Good work!

Btw, I have a similar list I wrote into my IPS many years ago, so if you have an IPS, you could add it there.
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sco
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Re: Ok reasons for a 37 year old to have a 60/40 mix?

Post by sco » Mon Jun 12, 2017 12:23 pm

Sounds reasonable to me...

Of course with a big enough nest egg #4 isn't an issue, but you may give some thought to changing to 40/60 at retirement if you already have a high % of fixed income.. (Pension/SS)

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Re: Ok reasons for a 37 year old to have a 60/40 mix?

Post by Deltoid » Mon Jun 12, 2017 12:32 pm

It's a perfectly fine allocation for the reasons you list if you don't need to take more risk, i.e., if you keep a high enough savings rate.

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Re: Ok reasons for a 37 year old to have a 60/40 mix?

Post by aristotelian » Mon Jun 12, 2017 12:55 pm

Allocation is based on need, ability, and willingness to take risk. If you have a high enough savings rate that you could achieve your savings goal by saving in cash, then you have no need to take risk. In that case, you absolutely should save cash if that is your preference.

The problem is that most of us need some amount of growth in order to achieve our goals. Then you have to consider your ability and willingness to take risk. 60/40 is very much justifiable if that is the allocation that gives you the best chance of achieving your goal with as little risk as possible.

In fact, the question should be stated the other way. The presumption should be 100% cash. If you are going to risk your savings, you should have a reason for doing so and a strategy to accomplish your goal. It is interesting that it is assumed that the "default" allocation is much higher and 60/40 is considered "conservative". Next the shoeshine boy will be giving stock tips. Makes me want to get out of stocks before the market crashes, but alas my IPS states 75/25.

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Re: Ok reasons for a 37 year old to have a 60/40 mix?

Post by boglephreak » Mon Jun 12, 2017 1:01 pm

i am also 37 this year. i think those are "Ok reasons." i dont agree with being that conservative, but every person has to determine this for themselves based on their own circumstances. my AA may not be right for you, and your AA is not right for me (based on my personal feelings).

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Re: Ok reasons for a 37 year old to have a 60/40 mix?

Post by WhiteMaxima » Mon Jun 12, 2017 1:03 pm

Why not 70/30? or 80/20?

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Re: Ok reasons for a 37 year old to have a 60/40 mix?

Post by neurosphere » Mon Jun 12, 2017 1:19 pm

I'm 45 years old with about a 65/35 stock/bond mix (depending on how you count high-yield bonds). I've had the identical allocation since I started investing at age 28. I'll probably keep this same allocation until a few years before retirement.

So yes, it's "OK". As long as you know/understand your reasons.
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Re: Ok reasons for a 37 year old to have a 60/40 mix?

Post by Elsebet » Mon Jun 12, 2017 2:32 pm

Nothing wrong with 60/40. I'm age 40 and I'm 70/30 at the moment, and plan on slowly going to 60/40 over the next 10 years.

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Re: Ok reasons for a 37 year old to have a 60/40 mix?

Post by Dottie57 » Mon Jun 12, 2017 2:36 pm

BashDash wrote:1) Helps me sleep at night easily.
2) If the stock allocation was higher ( 70/30 or 80/20 ) I don't feel confident on when in my life I would change it to a lower stock allocation.
3) I do feel confident holding 60/40 through a major downturn.
4) I do feel comfortable doing a change to 40/60 on year of retirement ( accompanied by a pension. )
5) I don't want to use a Vanguard target fund that includes international bonds which also carries a higher expense.
6) I feel it gives me exposure to the equity market while still giving me a smooth ride with the bonds.

At your age I floated between 70/30 and 60/40. Worked well. Yours will too.
Last edited by Dottie57 on Mon Jun 12, 2017 2:42 pm, edited 1 time in total.

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Re: Ok reasons for a 37 year old to have a 60/40 mix?

Post by Fudgie » Mon Jun 12, 2017 2:37 pm

:oops:
Last edited by Fudgie on Fri Dec 08, 2017 7:00 am, edited 1 time in total.

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Re: Ok reasons for a 37 year old to have a 60/40 mix?

Post by jebmke » Mon Jun 12, 2017 2:47 pm

We were at ~ 60/40 when we were in our late 30s. I worked in a cyclical business. My spouse worked for an investment company -- her income was highly correlated with the stock market. Our equity was ~75% small cap value. It made sense to keep a fairly large slug of bonds.
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Re: Ok reasons for a 37 year old to have a 60/40 mix?

Post by Phineas J. Whoopee » Mon Jun 12, 2017 3:09 pm

Your reasoning looks good to me.

Here's what I did, a non-age-based asset allocation approach, and a couple of years later I answered some questions about it.

To be clear, I think an age-based allocation strategy will be far more practical for most investors.

PJW

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Re: Ok reasons for a 37 year old to have a 60/40 mix?

Post by goingup » Mon Jun 12, 2017 3:26 pm

You seem pretty set on your decision and appear to be looking for confirmation. It bears noting that Vanguard's TR 2040 fund has about 87% stock. After all, you have some 25 years till retirement. Additionally, you're anticipating a pension.

I'm 60/40(ish) too, but 20 years older than you. In the end, you have to do what works for you, otherwise it won't work. :D

Vanguard's TR 2040
1 Vanguard Total Stock Market Index Fund Investor Shares 51.9%
2 Vanguard Total International Stock Index Fund Investor Shares 35.0%
3 Vanguard Total Bond Market II Index Fund Investor Shares† 9.2%
4 Vanguard Total International Bond Index Fund Investor Shares 3.9%
Total — 100.0%
Characteristics as of 04/30/2017

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Re: Ok reasons for a 37 year old to have a 60/40 mix?

Post by nedsaid » Mon Jun 12, 2017 3:33 pm

A 60/40 allocation is good for most investors. The mix is aggressive enough that you will get the bulk of the stock market's return but conservative enough that you should weather even the worst of bear markets. If we had another 50% bear market, your portfolio losses would be about 28-29%, which should be tolerable. I have been right around 70/30 for about 15 years now and that has worked for me. Your reasoning is sound on all counts, now you need a savings rate high enough to meet your goals.
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Re: Ok reasons for a 37 year old to have a 60/40 mix?

Post by herpfinance » Mon Jun 12, 2017 3:36 pm

I'm in my early 30's and when taking every single account into question, 60/40 is roughly my allocation. If you exclude short term savings for a car, the equity portion is a bit higher.

I agree with most of your points, too, and unless there's a major life change, I plan to stick with the allocation until I reach retirement or my savings goal.

And my savings rate is way above average, so that helps a lot.
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Re: Ok reasons for a 37 year old to have a 60/40 mix?

Post by BashDash » Mon Jun 12, 2017 7:19 pm

OP here. Thanks for all your comments. Very grateful for this forum. Life changing year in discovering my 403b fees thru this forum. Even opened my first Roth. Related to this post; balanced index fund admiral of course.

Thx again.

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Re: Ok reasons for a 37 year old to have a 60/40 mix?

Post by FIREchief » Mon Jun 12, 2017 9:02 pm

I'll be the contrarian here. When do you want to retire? If you stay at 60/40, will historical market returns get you there?

If the answers are something like 60 and "no," then you have to ask another question. Are you willing to bet the odds and be more aggressive?

I don't know you and you don't know me. In my situation, I was 100% equities until near retirement, and it greatly improved my chances of a safe, happy and early retirement. You probably have 20 years (plus or minus) before you need your retirement savings. Equities have always outperformed everything else over that long a period of time. Also consider that with interest rates at record lows, bonds can simply not mathematically perform over the next 20 years as they have over recent decades. YMMV.
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Re: Ok reasons for a 37 year old to have a 60/40 mix?

Post by StevieG72 » Mon Jun 12, 2017 9:07 pm

60/40 is the sweet spot!
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Re: Ok reasons for a 37 year old to have a 60/40 mix?

Post by JonnyDVM » Mon Jun 12, 2017 9:16 pm

It's fine if you know yourself and you want to stay (relatively) conservative. Better than 20/80 and way better than stuffing it all into a savings account because you don't want to "gamble" in the market.
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Re: Ok reasons for a 37 year old to have a 60/40 mix?

Post by stemikger » Mon Jun 12, 2017 9:46 pm

mcraepat9 wrote:Those are all excellent reasons
+1

Can't argue with your reasoning. Stick with the plan and you will be rewarded.

Check out this post I started called Cradle to Grave in the Vanguard Balanced Index Fund which is 60/40.

viewtopic.php?t=164521
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Re: Ok reasons for a 37 year old to have a 60/40 mix?

Post by MnD » Mon Jun 12, 2017 10:34 pm

I know plenty of people at all age points that could never get beyond the credit union/money market/stable value fund options for life savings.
Your reasons seem valid and are no-where even near the low/no return approach of the truly risk-adverse.

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Re: Ok reasons for a 37 year old to have a 60/40 mix?

Post by Smurf » Tue Jun 13, 2017 5:31 am

I think your allocation is perfectly fine and only part of the picture. You need to choose the allocation that is most likely to get you where you need to be at the end of the day. Your savings rate and expense management is far more important. If you make $100k/yr and save $50k/yr at a 60/40 allocation, you are going to be way ahead of the person who only saves $10k but has an allocation of 90/10.

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Re: Ok reasons for a 37 year old to have a 60/40 mix?

Post by BashDash » Tue Jun 13, 2017 7:07 am

OP here again. I do realize that my savings rate will be a driving force more than the actual allocation. My wife and I just started maxing our roths and 457 accounts in a low cost environment and will continue to do so. We will both have pensions but have to live through two political events that could jeopardize the pension( in NY there is a vote for constitutional convention that could possibly throw the pension at risk ).

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Re: Ok reasons for a 37 year old to have a 60/40 mix?

Post by azanon » Tue Jun 13, 2017 7:28 am

I'd come at it from the opposite angle that you anticipated. Even a 60/40 is an equity-dominated portfolio and stocks will explain 90%+ of any volatility that you experience. You're still placing a heavy bet on stocks, so if that's your concern that you weren't, I assure you that you still are.

I'll also have a pension (and social security) when I retire. It is for that reason that I personally don't see why I would lower my equity allocation when I have the added stability of a pension and social security, whereas now I have a job that I may or may not still have next year. What I'm getting at is that if you see your eventual target as a 40/60, why wait? I'd say your risk is higher now, not after you get 2 pensions and social security.

I admit I've gotten to the point that I think the average person, and the average financial adviser is asking individual's portfolios to work too hard, perhaps in many cases to make up for the fact that they're not saving enough. I'm now more in the camp of save 15-20% or more, and have a portfolio with something less than 50% equities. The tortoise beats the hare and the journey is a lot less stressful along the way.

Here's another way to think of it - the Global Market Portfolio (all investments combined) have about 45% stocks, give or take a few percent. So you have a significant tilt towards stocks from baseline.

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Re: Ok reasons for a 37 year old to have a 60/40 mix?

Post by randomguy » Tue Jun 13, 2017 8:12 am

livesoft wrote:In this post, I did a Portfolio Visualizer run comparing an 80/20 LifeStrategy fund and a 60/40 LifeStrategy fund for the 20-year time frame 1995 to 2015. The difference was about 0.2% CAGR per year. Ha!
Which over say a 40 year accumulation period adds up to having 10% more money. So when you retire you can have a 3.7% SWR instead of a 4% one. That is a huge change in safety.

The question when people start talking about feeling comfortable is how much of that feeling is theoretical (you think losing 25% is ok but 35% is unacceptable) versus real (you didn't sell in 2007-9. Even then you need to remember you are 10 years old and hopefully your portfolio is a lot larger. It is one thing to lose 20k. It is another to lose 100k).

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Re: Ok reasons for a 37 year old to have a 60/40 mix?

Post by livesoft » Tue Jun 13, 2017 8:26 am

randomguy wrote:
livesoft wrote:In this post, I did a Portfolio Visualizer run comparing an 80/20 LifeStrategy fund and a 60/40 LifeStrategy fund for the 20-year time frame 1995 to 2015. The difference was about 0.2% CAGR per year. Ha!
Which over say a 40 year accumulation period adds up to having 10% more money. So when you retire you can have a 3.7% SWR instead of a 4% one. That is a huge change in safety.
I think there is another message in that. There are many 60/40 funds including many 60/40 essentially passively-managed managed funds. The annual returns within that group of 60/40 funds varies by much more than 0.20% over most time periods. Basically, you cannot even use probability and "risk level" to see future outcomes.

So I don't think one can state that it "adds up to having 10% more money." That's just a myth that we cling to. What is not a myth are fees and taxes, so one needs to keep those as low as possible for whatever asset allocation one chooses. And one must avoid so-called behavioral errors or they will cost one as well, but that's "by definition" since if it didn't cost one, then it wouldn't be an error. :)
Last edited by livesoft on Tue Jun 13, 2017 8:30 am, edited 2 times in total.
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Re: Ok reasons for a 37 year old to have a 60/40 mix?

Post by azanon » Tue Jun 13, 2017 8:27 am

randomguy wrote:
livesoft wrote:In this post, I did a Portfolio Visualizer run comparing an 80/20 LifeStrategy fund and a 60/40 LifeStrategy fund for the 20-year time frame 1995 to 2015. The difference was about 0.2% CAGR per year. Ha!
Which over say a 40 year accumulation period adds up to having 10% more money. So when you retire you can have a 3.7% SWR instead of a 4% one. That is a huge change in safety.

The question when people start talking about feeling comfortable is how much of that feeling is theoretical (you think losing 25% is ok but 35% is unacceptable) versus real (you didn't sell in 2007-9. Even then you need to remember you are 10 years old and hopefully your portfolio is a lot larger. It is one thing to lose 20k. It is another to lose 100k).
When you look at something like that in hindsight, the portfolio that produced the higher return always looks better regardless of the volatility. That's where you have to be careful when projecting forward.

Forward looking, the exact picture is a guarantee of higher volatility with more stocks, in hope of a higher return, that you may or may not get.

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Re: Ok reasons for a 37 year old to have a 60/40 mix?

Post by cjcerny » Tue Jun 13, 2017 8:45 am

I'm 50 and all in on Vanguard's Balanced Index Fund. No plan to change once I retire, but I will if I find the volatility to be unnerving at that point. All my investment decision making is made based on the volatility. I've found a level that I am completely comfortable with.

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Re: Ok reasons for a 37 year old to have a 60/40 mix?

Post by randomguy » Tue Jun 13, 2017 8:56 am

livesoft wrote:
randomguy wrote:
livesoft wrote:In this post, I did a Portfolio Visualizer run comparing an 80/20 LifeStrategy fund and a 60/40 LifeStrategy fund for the 20-year time frame 1995 to 2015. The difference was about 0.2% CAGR per year. Ha!
Which over say a 40 year accumulation period adds up to having 10% more money. So when you retire you can have a 3.7% SWR instead of a 4% one. That is a huge change in safety.
I think there is another message in that. There are many 60/40 funds including many 60/40 essentially passively-managed managed funds. The annual returns within that group of 60/40 funds varies by much more than 0.20% over most time periods. Basically, you cannot even use probability and "risk level" to see future outcomes.

So I don't think one can state that it "adds up to having 10% more money." That's just a myth that we cling to. What is not a myth are fees and taxes, so one needs to keep those as low as possible for whatever asset allocation one chooses. And one must avoid so-called behavioral errors or they will cost one as well, but that's "by definition" since if it didn't cost one, then it wouldn't be an error. :)
With the funds the OP picked and for the time period, the person ended up with 10% more money. That is actually a pretty bad period. Normally the higher AA gives .4% not .2% returns. I assume some of that is timing and some is the glide path. The high level point is that .2% doesn't seem like much but over time it adds up. Picking between providers and AA are independant choices. Yeah sticking 60% of my money in Apple would have outperformed shoving 70% in an index fund in 1995 but that is not the same choice as picking between 60% and 70%.

Obviously you might not get higher returns. Just because 100% of 30 year US market periods have favored 70/30 over 60/40 doesn't tell you what the future will be. But the odds are really stacked in one direction.

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Re: Ok reasons for a 37 year old to have a 60/40 mix?

Post by livesoft » Tue Jun 13, 2017 9:00 am

randomguy wrote:With the funds the OP picked and for the time period, the person ended up with 10% more money.
Another point I want to make is that the timing of contributions along the way will make another difference that can overwhelm the 0.2% difference. It's not just the starting point.

So there's the theory and then there's the reality. Reality seems to have a lot more variability than people expect from theory. And that's both to the upside and to the downside.
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Re: Ok reasons for a 37 year old to have a 60/40 mix?

Post by Emergent_Order » Tue Jun 13, 2017 9:18 am

I think you gave excellent reasons why 60/40 is a good stock and bond mix for you. A small difference in exposure to equities would be absolutely dwarfed if you capitulated on a severe downturn and sold everything for cash. Just by having a good sense of your risk tolerance, you are so far ahead of most people. Good work. Don't change a thing.

I couple years ago I was revisiting our asset allocation. At the time we were early 40's and had a 70/30 mix. I could tell my wife was a little uncomfortable with that mix, the more we talked about our plans. We agreed to lower it to 60/40 and hold a little more in our emergency fund. Our investments will likely grow slightly slower, but we both found a compromise that should still get us to our goals and allow both of us to sleep at night. I don't regret our decision for a minute.

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Re: Ok reasons for a 37 year old to have a 60/40 mix?

Post by BL » Tue Jun 13, 2017 9:56 am

Here is another expert that recommends about 33% bonds for beginning or young investors:
https://www.etf.com/docs/IfYouCan.pdf
That is not far from what you chose.

Also you are choosing not to spend an extra 1-2% in fees and higher-ERs that you would probably spend using an adviser. So you can go more conservative with the money you are saving, if you choose, and have good results.

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Re: Ok reasons for a 37 year old to have a 60/40 mix?

Post by BashDash » Thu Nov 30, 2017 9:23 pm

OP here.

Wanted to add another reason for me to use 60/40.

I am trying to visualize the feeling of a major downturn and I think 60/40 would be great. Lately, I think maybe I should be more in equities with the huge run up but I think my personal allocation should be thought out based on bad times not good times. 60/40 seems to work for both good and bad times for me although I haven't really experienced the bad yet. Technically I have but I was not financially aware of what was going on.

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Re: Ok reasons for a 37 year old to have a 60/40 mix?

Post by sambb » Thu Nov 30, 2017 9:29 pm

60/40 is perfect in a lot of ways. Not too risky, not to conservative, easy to maintain, and doesnt cause panic. Enjoy it and sleep well while it grows.

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Re: Ok reasons for a 37 year old to have a 60/40 mix?

Post by randomizer » Thu Nov 30, 2017 10:15 pm

Having an imperfect plan you can stick to is more important than having a perfect plan that you can't stick to.
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Re: Ok reasons for a 37 year old to have a 60/40 mix?

Post by TomCat96 » Thu Nov 30, 2017 10:21 pm

A 60/40 will give you a greater reward relative to risk taken than a 70/30, 80/20, all the way up to 100/0

One aspect about the efficient frontier is that there an infinite number of optimal portfolios. But as you up your stock ratio, you are surely taking on more risk than you are being rewarded. Nevertheless, if a person your age can bear the risk, he/she should.

If you cannot bear the risk, go with 60/40. Your marginal drop in gains will be a good amount smaller than quantity at which you derisk.

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Re: Ok reasons for a 37 year old to have a 60/40 mix?

Post by dbr » Fri Dec 01, 2017 12:07 am

I think three previous posters pointed out that the issue is does this portfolio promise enough expected return to meet your objectives given enough ability on your part to take the associated risk and given willingness to take that risk. Answer those questions and you will know. Don't answer those questions and you are winging it. There is enough uncertainty in investing that taking a SWAG is not necessarily a bad idea, but somewhat more systematic thinking might not hurt.

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stemikger
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Re: Ok reasons for a 37 year old to have a 60/40 mix?

Post by stemikger » Fri Dec 01, 2017 1:11 am

BashDash wrote:
Thu Nov 30, 2017 9:23 pm
OP here.

Wanted to add another reason for me to use 60/40.

I am trying to visualize the feeling of a major downturn and I think 60/40 would be great. Lately, I think maybe I should be more in equities with the huge run up but I think my personal allocation should be thought out based on bad times not good times. 60/40 seems to work for both good and bad times for me although I haven't really experienced the bad yet. Technically I have but I was not financially aware of what was going on.
Nothing wrong with your plan. Just stick with it and try not to look at your portfolio throughout the year. As Jack Bogle says "Don't Peek" and when you are ready to retire take a peek, you might faint at the amount you have in there.
Choose Simplicity ~ Stay the Course!! ~ Press on Regardless!!!

Theoretical
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Re: Ok reasons for a 37 year old to have a 60/40 mix?

Post by Theoretical » Fri Dec 01, 2017 1:22 am

1. Heavy value tilting (especially Small Value) is another good reason on the portfolio side.

2. Known likely high expenses beyond normal college/retirement - serious family medical history or having to chip in for elderly family.

3. Volatile personal situations (extended family drama).

The list can go on.

BashDash
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Re: Ok reasons for a 37 year old to have a 60/40 mix?

Post by BashDash » Fri Dec 01, 2017 1:53 pm

OP here. The fact that we will be a dual pension household pension in retirement makes me feel no reason to take on unnecessary risk. Yes, pensions are not guaranteed but ours is stable and should be enough to provide for all of our expenses. I have read others on the board who would take more risk due to this but to me it feels like it is best to just stay at 60/40. Have been using Vanguard Balanced in our Roth while using 60/40 with some international in all other retirement tax deferred accounts that automatically rebalance quarterly back to 60/40. Plan on opening the envelope at age 55 and being surprised.

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Re: Ok reasons for a 37 year old to have a 60/40 mix?

Post by TomCat96 » Fri Dec 01, 2017 2:24 pm

BashDash wrote:
Fri Dec 01, 2017 1:53 pm
OP here. The fact that we will be a dual pension household pension in retirement makes me feel no reason to take on unnecessary risk. Yes, pensions are not guaranteed but ours is stable and should be enough to provide for all of our expenses. I have read others on the board who would take more risk due to this but to me it feels like it is best to just stay at 60/40. Have been using Vanguard Balanced in our Roth while using 60/40 with some international in all other retirement tax deferred accounts that automatically rebalance quarterly back to 60/40. Plan on opening the envelope at age 55 and being surprised.
There really isn't that much to say. Even if you needed the money, the largest factor which should drive your allocation is your risk tolerance. It sounds like being 60/40 helps you sleep at night.

Your risk intolerance (relative to your age) is alone dispositive of your proper allocation. But you don't need the money. So much the better.

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sergeant
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Re: Ok reasons for a 37 year old to have a 60/40 mix?

Post by sergeant » Fri Dec 01, 2017 2:53 pm

Your pensions will cover all expenses in retirement, you have a good savings rate, you have a reasonable investment plan. As long as you have LTC covered I see nothing but success here. :sharebeer
Lincoln 3 EOW!

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