When to move into bonds

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Weymouth
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When to move into bonds

Post by Weymouth » Sat Dec 16, 2017 12:26 pm

I am ~9 years from retirement and am unsure how/when to move into bonds. I have invested 100% in stocks/mutual funds/etfs for years and hate the thought of losing the higher gains. My situation is as follows:
- age 53 and married; both children are done with college
- my wife and I both max out our 401ks annually ($48k total)
- current net worth = $1.4M & we have no debt
- neither of us will have pensions and our goal is to have $3M by retirement age

I realize 100% stocks is too risky as we get closer to retirement. Are there other investments that would reduce risk as well as diversify?

Any advice is appreciated. Also, there may be similar questions/feedback in these forums but I am not sure where to check.

Weymouth

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nisiprius
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Re: When to move into bonds

Post by nisiprius » Sat Dec 16, 2017 1:02 pm

Weymouth wrote:
Sat Dec 16, 2017 12:26 pm
...Are there other investments that would reduce risk as well as diversify?...
I don't think so--not in any robust, reliable, or serious way. Bonds are just intrinsically different from stocks. Fine tuning tweaks among stock allocations just aren't a powerful or a trustworthy lever. Here is a random old bunch of bond funds--my only constraint is investment grade, and no longer than intermediate term--and here is a random old bunch of stock funds, and among the stock funds I'm going to include some that are in categories that often described as providing "downside protection." I don't think I even need to say which are the stock funds and which are the bond funds--you can tell looking at the screen from across the room.

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As for how to do it, my suggestion is make a start and do it gradually. Choose some bond percentage that is so low that you can bring yourself to do it. 20%? If that's too much to stand, then 10%. If that's too much to stand, then 5%. It's much easier to make a slow, gradual increase than to make a big change because for any big change you start to get anxious about timing.
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tigermilk
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Re: When to move into bonds

Post by tigermilk » Sat Dec 16, 2017 1:07 pm

For myself, I started late last year, and as of today I can retire early in just over 8 years. I am currently at 90/10 and plan a glide to 80/20 at retirement. I also wanted to start last year as a hedge - I can't see this bull market lasting the next 8 years. Figured I would bank/protect several years worth of retirement income.

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Re: When to move into bonds

Post by Daryl » Sat Dec 16, 2017 1:07 pm

I'd make the change on Monday. A 20% decline in equities over a relatively short period of time is considered reasonable, normal, and even healthy. With your $1.4M portfolio, that is almost $0.3M! To put this another way, that is more money than I earn in several years of working. I've added a significant amount of bonds to my portfolio simply to reduce the expected volatility (with full knowledge of that change could mean to the expected returns). Of course, my willingness to take risk might be lower than yours.

aqan
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Re: When to move into bonds

Post by aqan » Sat Dec 16, 2017 1:09 pm

100% sounds like a lot of risk, I’d start taking something off the table while the stocks are still at all time high.
Your ultimate bond allocation depends upon your comfort level but anything 20+% sounds reasonable to me.

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LittleGreenSoldiers
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Re: When to move into bonds

Post by LittleGreenSoldiers » Sat Dec 16, 2017 1:11 pm

When making a fairly large move from stocks to bonds does it make sense to wait until after an upcoming dividend distribution?
Of course the equity position could go down in value while waiting a few weeks for dividends.

chevca
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Re: When to move into bonds

Post by chevca » Sat Dec 16, 2017 1:20 pm

Weymouth wrote:
Sat Dec 16, 2017 12:26 pm
I have invested 100% in stocks/mutual funds/etfs for years and hate the thought of losing the higher gains.
You wouldn't be losing them. You'd be keeping them. :happy

How much are you looking to move to bonds? What about future contributions going only to bonds?

dharrythomas
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Re: When to move into bonds

Post by dharrythomas » Sat Dec 16, 2017 4:28 pm

Ben Graham would have recommended you make the move a long time ago. He said that the default position should be 50/50 and that everyone should be somewhere between 75/25 and 25/75. We just all think we know better.

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Re: When to move into bonds

Post by livesoft » Sat Dec 16, 2017 4:31 pm

Another idea is to look at what Target Date funds do with their bonds allocations and sort of follow them.
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kerplunk
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Re: When to move into bonds

Post by kerplunk » Sat Dec 16, 2017 4:49 pm

dharrythomas wrote:
Sat Dec 16, 2017 4:28 pm
Ben Graham would have recommended you make the move a long time ago. He said that the default position should be 50/50 and that everyone should be somewhere between 75/25 and 25/75. We just all think we know better.
It sounds like he/you think you/him know better. :)

OP, if you are unsure, ask yourself what is the most you would be comfortable with losing and then choose your asset allocation adcordingly.

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Re: When to move into bonds

Post by retiredjg » Sat Dec 16, 2017 4:53 pm

There is a time to make money. And there is a time to preserve what you have made...so that you actually have something when you retire. If you don't, you may not retire when you want or you may have a difficult retirement.

You are entering the preservation stage.

On Monday, I'd shift your AA from 100% stocks to 70% stocks. That is is a number that is more appropriate for your age. You've had a great run up and you should take some profit off the table before it disappears.

As the years move on, I'd have no less than age minus 20 in bonds. More if you want. Your portfolio will be growing slower than in the past, but it will tolerate the down times much better.

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stemikger
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Re: When to move into bonds

Post by stemikger » Sat Dec 16, 2017 7:42 pm

dharrythomas wrote:
Sat Dec 16, 2017 4:28 pm
Ben Graham would have recommended you make the move a long time ago. He said that the default position should be 50/50 and that everyone should be somewhere between 75/25 and 25/75. We just all think we know better.
+1

I'm 53 and 60/40 for several years now. I would be too anxious at 100% in stocks especially since they are at all time highs.
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Re: When to move into bonds

Post by Dottie57 » Sat Dec 16, 2017 7:50 pm

I am 61 and at 50/50. I don't want to lose a lot if stocks go down and stay down.

And this year at 50/50. I have still done avout 13% return. My portfolio still has enough stocks to grow.

Last thing -'don't be greedy - realize you are at a point in life where you need to preserve too.

mmcmonster
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Re: When to move into bonds

Post by mmcmonster » Sat Dec 16, 2017 8:16 pm

Weymouth wrote:
Sat Dec 16, 2017 12:26 pm
I am ~9 years from retirement [...]
- current net worth = $1.4M & we have no debt
- neither of us will have pensions and our goal is to have $3M by retirement age
[...]
I'm sorry, but I'm not sure if you can reach your goal with expected/average market returns. Or am I missing something? :annoyed

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dwickenh
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Re: When to move into bonds

Post by dwickenh » Sat Dec 16, 2017 8:25 pm

Dottie57 wrote:
Sat Dec 16, 2017 7:50 pm
I am 61 and at 50/50. I don't want to lose a lot if stocks go down and stay down.

And this year at 50/50. I have still done avout 13% return. My portfolio still has enough stocks to grow.

Last thing -'don't be greedy - realize you are at a point in life where you need to preserve too.
+1 I could not have said it better Dottie57!!
The market is the most efficient mechanism anywhere in the world for transferring wealth from impatient people to patient people.” | — Warren Buffett

4nwestsaylng
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Re: When to move into bonds

Post by 4nwestsaylng » Sat Dec 16, 2017 8:32 pm

Agree with earlier poster, you should reduce your 100% allocation to stocks by at least 30% Monday morning,ie go immediately to a 70 equity/30 bond at the least, and in fact you might consider tapering even more over the next month or so to a 60/40 position.

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Re: When to move into bonds

Post by gvsucavie03 » Sat Dec 16, 2017 8:43 pm

dwickenh wrote:
Sat Dec 16, 2017 8:25 pm
Dottie57 wrote:
Sat Dec 16, 2017 7:50 pm
I am 61 and at 50/50. I don't want to lose a lot if stocks go down and stay down.

And this year at 50/50. I have still done avout 13% return. My portfolio still has enough stocks to grow.

Last thing -'don't be greedy - realize you are at a point in life where you need to preserve too.
+1 I could not have said it better Dottie57!!
It's not something to bet on going forward, though. Both have done well this year.

I'd change all future contributions to go to bonds and I'd find the most tax effecient to move 20-30% (or even greater) of the 1.3 to bonds. Don't go crazy and have a massive tax bill if you have a bunch in taxable.

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dwickenh
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Re: When to move into bonds

Post by dwickenh » Sat Dec 16, 2017 8:54 pm

gvsucavie03 wrote:
Sat Dec 16, 2017 8:43 pm
dwickenh wrote:
Sat Dec 16, 2017 8:25 pm
Dottie57 wrote:
Sat Dec 16, 2017 7:50 pm
I am 61 and at 50/50. I don't want to lose a lot if stocks go down and stay down.

And this year at 50/50. I have still done avout 13% return. My portfolio still has enough stocks to grow.

Last thing -'don't be greedy - realize you are at a point in life where you need to preserve too.
+1 I could not have said it better Dottie57!!
It's not something to bet on going forward, though. Both have done well this year.

I'd change all future contributions to go to bonds and I'd find the most tax effecient to move 20-30% (or even greater) of the 1.3 to bonds. Don't go crazy and have a massive tax bill if you have a bunch in taxable.
I think it is safe to say it has been an unusually good year for stocks!!!!! But even with a good ballast, the returns have been more than acceptable. I don't expect that every year, as it would be naive to do so.
The market is the most efficient mechanism anywhere in the world for transferring wealth from impatient people to patient people.” | — Warren Buffett

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Re: When to move into bonds

Post by Sidney » Sat Dec 16, 2017 8:54 pm

mmcmonster wrote:
Sat Dec 16, 2017 8:16 pm
I'm sorry, but I'm not sure if you can reach your goal with expected/average market returns. Or am I missing something?
Additional saving for nine years.
I always wanted to be a procrastinator.

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David Jay
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Re: When to move into bonds

Post by David Jay » Sat Dec 16, 2017 9:01 pm

Based on your numbers (1.4M, 450K additional contributions), you should be able to absorb a small reduction in growth and still hit your 3M goal in 9 years. The thing that will destroy your likelihood of success is to have a 40% drop in asset value 3-5 years before retirement.

I was 100% stocks into my mid-50s but I am now on a glide path down to 40% equities at retirement in about a year (age 62). I will then allow my asset allocation to drift up as I spend from my portfolio. After start of Social Security (likely age 70) I will set up a plan to increase asset allocation up to 80/20 by age 80.
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Hyperborea
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Re: When to move into bonds

Post by Hyperborea » Sat Dec 16, 2017 10:13 pm

4nwestsaylng wrote:
Sat Dec 16, 2017 8:32 pm
Agree with earlier poster, you should reduce your 100% allocation to stocks by at least 30% Monday morning,ie go immediately to a 70 equity/30 bond at the least, and in fact you might consider tapering even more over the next month or so to a 60/40 position.
Yes, OMG it's a market top. The OP should time the markets and move into bonds right now!!!! Don't think about it, just do it!!!
-----------

OP, don't do anything rash on the advice you get on a discussion board. Take it all, go away, think it through, and then make a reasoned and planned decision.

If you the OP wants to glide in to more bonds then set a target. What do you want your equity percentage to be at retirement? Have a look at the retirement withdrawal series on Early Retirement Now. At 60-ish you have about a 10% chance that one of you will be alive in 35-40 years so I would consider that as the retirement horizon. I would suggest no lower than 50% equity and maybe more like 60+% but it will depend on what withdrawal rate (WR) you want to take.

With that desired equity amount plan a gradual slope to hit your percentage of equity a year or two before you plan to retire. You should be able to get there by directing new investments and using dividends. You've got 9 years to go till retirement so you've time to take a gradual approach.

I retired last year and didn't slope in the same though I pulled back from 100% equity but only slightly. I had the luxury of being able to adjust my retirement date because I was retiring so early at 51. If the market had tanked leading up to that I could have delayed. I also need a higher equity %age because of my longer retirement horizon. You do have some ability to delay but that's a choice you need to make on whether your 62 is fixed or not.

Oh yeah, is that networth total include your house or is that your investable assets? Don't include the house unless you plan to sell and downsize. Even then, only include what would be a reasonable remainder after buying the replacement house.
"Plans are worthless, but planning is everything." - Dwight D. Eisenhower

mindboggling
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Re: When to move into bonds

Post by mindboggling » Sat Dec 16, 2017 10:31 pm

dharrythomas wrote:
Sat Dec 16, 2017 4:28 pm
Ben Graham would have recommended you make the move a long time ago. He said that the default position should be 50/50 and that everyone should be somewhere between 75/25 and 25/75. We just all think we know better.
Especially if we have an advanced degree from Blah-blah-blah University (a top yada-yada school).
In broken mathematics, We estimate our prize, --Emily Dickinson

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Re: When to move into bonds

Post by CurlyDave » Sun Dec 17, 2017 2:18 am

Before doing anything I would recommending thinking and exploring some more.

You may have more "bonds" than you think. There is a minority here, but a sizable minority (and it includes Jack Bogle himself) who feel that Social Security should be counted as a "bond-like" investment. Exactly how to do that is open to debate. Some people suggest multiplying an annual SS benefit by 20 and calling that a "bond equivalent" is about right. I think that a fixed pension would come in at about 20x and SS, since it is inflation-adjusted, would be closer to 25x.

Of course SS isn't a bond, since it ceases on your death, and it can't be sold, but it sure does look like a steady income stream that can offset many of the risks of retirement.

What is your SS strategy?

Many here recommend waiting until 70 to start SS in order to get the maximum benefit. IMHO there is also a reasonable counter-argument for starting SS early in order to preserve one's portfolio. I retired in 2007 and took SS at the first possible opportunity, preserving my portfolio, a calculated risk. I won that bet, since I did not have to deplete my portfolio in the 2007-2008 time frame when equities were down, and the recovery in values since then is high enough that I will always have more income than if I had waited to take SS. So long as the CAGR stays more than a few % above inflation, I could live to 1000 and still be ahead.

But, my point is that you should take SS into account in your planning.

Some will say that calling SS a bond is just plain wrong, and that I am torturing the nature of an income stream when I do that. My primary response is that doing this allows me to approximate a bond holding and then to take advantage of the vast amount of research on withdrawal rates and strategies based on asset allocation which did not consider SS at all.

If you and your wife have been putting a combined $48k into IRAs, I am going to guess that you are entitled to the maximum SS benefit possible. If you wait until 70 to claim, it cold be more than $40k each per year.

And, there is a very interesting strategy to help alleviate sequence of returns risk (a crash with just before or after retirement). Even if you plan to wait until 70 to claim, it is always possible to claim earlier if there is a market crash. One or both of you can make an early claim. Essentially you are giving up future assured income in order to preserve capital in a downturn.

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stemikger
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Re: When to move into bonds

Post by stemikger » Sun Dec 17, 2017 7:31 am

dwickenh wrote:
Sat Dec 16, 2017 8:25 pm
Dottie57 wrote:
Sat Dec 16, 2017 7:50 pm
I am 61 and at 50/50. I don't want to lose a lot if stocks go down and stay down.

And this year at 50/50. I have still done avout 13% return. My portfolio still has enough stocks to grow.

Last thing -'don't be greedy - realize you are at a point in life where you need to preserve too.
+1 I could not have said it better Dottie57!!
Ditto! It's one thing to hear Warren Buffett suggest 90/10 for his wife but in real life, I rather listen to his mentor Ben Graham and go with 50/50. It will still get you there with a lot less stress. Jack Bogle's advice is the same. I'm 53 and 60/40 which is my SWAN portfolio.

P.S. I love Warren and this is not a slight to him in the least, but you have to know your risk tolerance also.
Choose Simplicity ~ Stay the Course!! ~ Press on Regardless!!!

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wander
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Re: When to move into bonds

Post by wander » Sun Dec 17, 2017 7:58 am

Only you can change you. I am far away from retirement and my asset allocation is 80/20 (equity/bond). Nisiprius is right. I used to be like you (100% in equity), but then decided to add 1% to bond and from there increased it easily to 20%.

rbslos36
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Re: When to move into bonds

Post by rbslos36 » Sun Dec 17, 2017 8:02 am

+1
I have a very similar situation. I’m five to seven years from retirement with similar assets. 3 million is also my goal. When I reach it, I will retire regardless of when that occurs.

Oh how I remember the downturn in 2008/9 and the gut-wrenching feeling and sleepless nights. I was 100% stocks. My impulse was to sell some of my portfolio to buy funds back at a lower price (a fool’s game!). My wife (liberal arts wiz, who has zero understanding or knowledge of investments said, “Don’t you dare! Buy more! You always like to buy things on sale. This is your dream come true. Everything is on sale! Don’t you dare sell anything!” Fortunately, I listened to her. Friends who sold will likely never recoup their losses. My response to the downturn was to change my approach. I become a Boglehead.

Like you, during this timeframe, we will contribute $400-500,000 to retirement. Just last week, I switched from a well-diversified allocation of 55/45 (33 US/22 overseas/45 Bonds) to 50/50. What pushed me was the Warren Buffett quote: “Be Fearful When Others Are Greedy and Greedy When Others Are Fearful.” I sense a rising greed factor. A more conservative portfolio will provide ballast to the portfolio when the inevitable downturn comes. 10% of my assets await a sale.

RB

Valuethinker
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Re: When to move into bonds

Post by Valuethinker » Sun Dec 17, 2017 8:47 am

Hyperborea wrote:
Sat Dec 16, 2017 10:13 pm
4nwestsaylng wrote:
Sat Dec 16, 2017 8:32 pm
Agree with earlier poster, you should reduce your 100% allocation to stocks by at least 30% Monday morning,ie go immediately to a 70 equity/30 bond at the least, and in fact you might consider tapering even more over the next month or so to a 60/40 position.
Yes, OMG it's a market top. The OP should time the markets and move into bonds right now!!!! Don't think about it, just do it!!!
-----------
Straw man. The logic behind the suggestion of 70/30 is that a 50% bear market right now would be devastating.

Imagine the thing with North Korea kicks off this weekend. Nuclear weapons exchanged. Continental US might not be hit, but major economic powers and allies like South Korea and Japan would almost certainly be. The "victors" would then have the problem of millions of refugees and huge rebuilding-- US Russia China all heavily involved. Even a conventional war would involve the destruction of Seoul, Korea-- a city of 20 million people with an income per capita of Chicago, if not New York. Tens or hundreds of thousands dead*. Untold disruption to the world economy (memory chip production, for example; shipbuilding for another).

The stock market reaction would be brutal

The OP is running a very high risk level. 70/30 is going to be a high risk level.

A rapid reallocation is justified. Whether to go below 70/30 can be considered at leisure.
OP, don't do anything rash on the advice you get on a discussion board. Take it all, go away, think it through, and then make a reasoned and planned decision.

If you the OP wants to glide in to more bonds then set a target. What do you want your equity percentage to be at retirement? Have a look at the retirement withdrawal series on Early Retirement Now. At 60-ish you have about a 10% chance that one of you will be alive in 35-40 years so I would consider that as the retirement horizon. I would suggest no lower than 50% equity and maybe more like 60+% but it will depend on what withdrawal rate (WR) you want to take.

With that desired equity amount plan a gradual slope to hit your percentage of equity a year or two before you plan to retire. You should be able to get there by directing new investments and using dividends. You've got 9 years to go till retirement so you've time to take a gradual approach.

I retired last year and didn't slope in the same though I pulled back from 100% equity but only slightly. I had the luxury of being able to adjust my retirement date because I was retiring so early at 51. If the market had tanked leading up to that I could have delayed. I also need a higher equity %age because of my longer retirement horizon. You do have some ability to delay but that's a choice you need to make on whether your 62 is fixed or not.

Oh yeah, is that networth total include your house or is that your investable assets? Don't include the house unless you plan to sell and downsize. Even then, only include what would be a reasonable remainder after buying the replacement house.
You (and I) gambled in effect-- ran 100% equity until quite late in the game. I am a few years from retirement, but such high equity ratings became scary-- I shut off checking my valuations in 2008/09. It is now 9 years later, and I don't have so much time to make good losses.


* the brother of the current ruler of DPRK was assassinated in (?) Kuala Lumpur airport using VX nerve gas on a wet towel-- the women who did so, who sound like total dupes, have come to trial and face the death penalty. VX is c. 100x more deadly than Sarin gas which was used by an apocalyptic cult on a crowded morning in a Tokyo subway car. And Sarin in turn at least 5x (?) more deadly than Zyklon B, which was used in the Auschwitz gas chambers, and mustard gas which was used on the Western Front in WW1.

DPRK has c. 3000 artillery tubes (howitzers to you and me) as well as large numbers of BM multiple rocket launchers (Katyushas in Russian informal parlance) within range of Seoul.

There's no doubt VX was chosen as a warning to the outside world of the chemical capabilities of DPRK.
Last edited by Valuethinker on Sun Dec 17, 2017 8:56 am, edited 1 time in total.

Valuethinker
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Re: When to move into bonds

Post by Valuethinker » Sun Dec 17, 2017 8:51 am

Weymouth wrote:
Sat Dec 16, 2017 12:26 pm
I am ~9 years from retirement and am unsure how/when to move into bonds. I have invested 100% in stocks/mutual funds/etfs for years and hate the thought of losing the higher gains. My situation is as follows:
- age 53 and married; both children are done with college
- my wife and I both max out our 401ks annually ($48k total)
- current net worth = $1.4M & we have no debt
- neither of us will have pensions and our goal is to have $3M by retirement age

I realize 100% stocks is too risky as we get closer to retirement. Are there other investments that would reduce risk as well as diversify?

Any advice is appreciated. Also, there may be similar questions/feedback in these forums but I am not sure where to check.

Weymouth
I would argue you want to be 50% in stocks or at most 60%.

However you won't get to $3m in 9 years starting with $1.4m with only 50% stocks. And in fact with 100% stocks you are not likely to get there (I doubt the stock market will return over 7% pa over the next 10 years).

So much depends on how much more money can you save in that time period?

The optimal would probably be something like 50% stocks 25% US Treasury Bonds 25% US TIPS (and ibonds).

There's a significant case (see my other posts) to going 70% stocks and 30% bonds really quickly. And then thinking about it. It's not a bad rule of thumb that a bear market would take out say 50% of your equity value- -that's definitely at the high end of bear markets (I imagine, with inflation, that in real terms at the worst of the 1966-1980 period, you had lost something like that) but it's not unimaginable. Remember it will be a risk we don't see right now that will get us.

goblue100
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Re: When to move into bonds

Post by goblue100 » Sun Dec 17, 2017 10:28 am

I would start by diverting all new contributions to bonds. @ $96,000 a year you can build a bond percentage relatively quickly. In fact, I am doing this myself. Started a couple months ago. This way you can satisfy your desire to keep your growth portion intact, while avoiding buying equities at presumably high prices. Another thing to consider is if you have the option to have capitol gains and dividends not reinvested, you could siphon those off into bonds.

I was something like 90/10 @ 53, 4 years ago. I'm now 68 /27 /5 (slowly building a CD ladder for a LLMP (limited liability matching portfolio)). I've cost myself some gains by moving into bonds, no doubt, but nothing is certain. I certainly would have kicked myself hard if a large correction occurred while I was at 90/10.
Some people are immune to good advice. - Saul Goodman

Dandy
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Re: When to move into bonds

Post by Dandy » Sun Dec 17, 2017 10:43 am

What many people approaching retirement under weight is that for most their human capital is getting near its practical end. That is a lot different that someone in their 30's or 40's. So, the ability to recover from a equity plunge of 20% or more is very difficult - and even if they do recover in a few years that is fewer years to get to their number and even less human capital. There is also, I suspect, a feeling for those very aggressive investors that cutting back from 100% equities to, say, 60% with stifle their growth to the extent that it will be minimal. Add that we have had a great 8 year or so bull market and 2017 has been very good for equities, and you have a strong bias to stay very aggressive.

Not many would recommend a person 9 years from retirement be at 100% equities. I believe you should add fixed income now and get to about 60/40 soon. The 3 million dollar lifestyle may still be there but I would have an acceptable plan B in mind. I wouldn't count on an additional 9 years for this bull market.

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ruralavalon
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Re: When to move into bonds

Post by ruralavalon » Sun Dec 17, 2017 10:45 am

Welcome to the forum :) .

It looks to me like you are probably be in good shape -- no debt, children through college, and contributing the maximum ($48k/yr total) to your 401ks. Focus less on net worth and more on amount invested. Here is a calculator you can use www.firecalc.com to help asses whether your investments will likely meet your needs.

You are right, 100% stocks is too risky.

Weymouth wrote:
Sat Dec 16, 2017 12:26 pm
I am ~9 years from retirement and am unsure how/when to move into bonds. I have invested 100% in stocks/mutual funds/etfs for years and hate the thought of losing the higher gains. My situation is as follows:
- age 53 and married; both children are done with college
- my wife and I both max out our 401ks annually ($48k total)
- current net worth = $1.4M & we have no debt
- neither of us will have pensions and our goal is to have $3M by retirement age

I realize 100% stocks is too risky as we get closer to retirement. Are there other investments that would reduce risk as well as diversify?

Any advice is appreciated. Also, there may be similar questions/feedback in these forums but I am not sure where to check.

Weymouth
You are age 53, and 9 years to retirement. Moving from full-blown accumulation to protecting and still growing what you have does require a change in outlook. It's not necessarily easy to change your way of viewing investments, but it's necessary in my opinion.

I suggest moving to about 30% bonds now, even that is pretty aggressive for age 53. This is expected to substantially reduce volatility (risk), with only a relatively slight decrease in return. Graph, "An Efficient Frontier: the power of diversification". Please see the wiki articles Bogleheads® investment philosophy, part 3 "Never bear too much or too little risk", and "Asset allocation".

For what its worth we are 72 of age, retired 6 years, with an asset allocation of 50/50 for the last 12 years. Total return of our portfolio year to date was 11.16% the last time I looked.

I would not switch the allocation in stages. Pick an allocation that suits your circumstances at age 53, and just go ahead and make the change.

. . . . .

Here are some other resources for you.

www.firecalc.com.

Boglehead's wiki, list of articles, "Retirement"

I suggest that you read one or two books on retirement and retirement planning. Wiki article, "Books: recommendations and reviews". When I first stated managing my own investments, I found this tutorial very helpful in learning investing terminology/jargon and some of the investing basics. Morningstar, "Investing Classroom".
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

goblue100
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Re: When to move into bonds

Post by goblue100 » Sun Dec 17, 2017 3:10 pm

Weymouth wrote:
Sat Dec 16, 2017 12:26 pm

- current net worth = $1.4M & we have no debt
- neither of us will have pensions and our goal is to have $3M by retirement age

I realize 100% stocks is too risky as we get closer to retirement. Are there other investments that would reduce risk as well as diversify?

Weymouth
I thought about this some more. One way to look at it is what you need for your goal:
1.3 Mil
96000 additional
9 years.
To get to over 3 million, you only need 4.5% on your investments annually.

Lets consider an alternative scenario
Scenario A: 100% stock.
1.3 million + 96,000 - 50% drop(presumed worst case for 100% stock) = $698,000
8 years to get to 3 million. You will need 12% to get there on time.

Scenario B: 50 /50 portfolio
1.3 million + 96,000 - 25% drop = %1,047,000
You need about 8% to get to $3,000,000

Obviously there are best case scenarios where you get to 3 million in 4 or 5 years, and some even worse than I outlined. That's what Monte Carlo simulators are for. :)
The main thing I'm trying to show is by adding bonds, you try to eliminate some of the worst case scenario's and be more certain of your goal. In return for that, you give up some of the best case scenarios.

* Just noticed I shorted your existing portfolio by 100,000. Oh well, the point is the same while the exact numbers will be different.
Some people are immune to good advice. - Saul Goodman

3funder
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Re: When to move into bonds

Post by 3funder » Sun Dec 17, 2017 4:05 pm

retiredjg wrote:
Sat Dec 16, 2017 4:53 pm
There is a time to make money. And there is a time to preserve what you have made...so that you actually have something when you retire. If you don't, you may not retire when you want or you may have a difficult retirement.

You are entering the preservation stage.

On Monday, I'd shift your AA from 100% stocks to 70% stocks. That is is a number that is more appropriate for your age. You've had a great run up and you should take some profit off the table before it disappears.

As the years move on, I'd have no less than age minus 20 in bonds. More if you want. Your portfolio will be growing slower than in the past, but it will tolerate the down times much better.
+1

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nedsaid
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Re: When to move into bonds

Post by nedsaid » Sun Dec 17, 2017 5:41 pm

Weymouth wrote:
Sat Dec 16, 2017 12:26 pm
I am ~9 years from retirement and am unsure how/when to move into bonds. I have invested 100% in stocks/mutual funds/etfs for years and hate the thought of losing the higher gains. My situation is as follows:
- age 53 and married; both children are done with college
- my wife and I both max out our 401ks annually ($48k total)
- current net worth = $1.4M & we have no debt
- neither of us will have pensions and our goal is to have $3M by retirement age

I realize 100% stocks is too risky as we get closer to retirement. Are there other investments that would reduce risk as well as diversify?

Any advice is appreciated. Also, there may be similar questions/feedback in these forums but I am not sure where to check.

Weymouth
After seeing the US Stock Market decline by over 50% in 2000-2002 and again in 2008-2009, I was pretty well cured of the fear of missing out on stock market gains. 2008-2009 was particularly painful as my losses were the equivalent of two years of take home pay. I joked that I worked two years for free! It smarted then and smarts even now just thinking about it. As they say, discretion is the better part of valor. Better to avoid a dangerous situation than confront it.

Fortunately, I started de-risking at age 40. I was 94% stocks in my retirement portfolio and went to 80% stocks just before the 2000 crash. My losses in 2000-2002 were just 32% and they could have been a lot worse. I lost 35% peak to trough in 2008-2009. I grew to appreciate the virtues of bonds.

At age 58, I am at 66% stocks. I have been doing waves of minor selling of stocks and buying of bonds, my program of mild rebalancing since July of 2013. I am a stock guy but I am realizing that I am getting older. Don't have oodles and oodles of time to recover from really bad bear markets. Time to start de-risking.

My recommendation for 53 year olds would be a 70% stock/30% bond portfolio. If we see another big bear market, that won't seem conservative enough for you. Fortunately, markets usually bounce back fully within about three years. I am just not as brave as I used to be. As the market keeps advancing, I keep hitting the sell button.
A fool and his money are good for business.

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Re: When to move into bonds

Post by tibbitts » Sun Dec 17, 2017 5:46 pm

Weymouth wrote:
Sat Dec 16, 2017 12:26 pm
I am ~9 years from retirement and am unsure how/when to move into bonds. I have invested 100% in stocks/mutual funds/etfs for years and hate the thought of losing the higher gains. My situation is as follows:
- age 53 and married; both children are done with college
- my wife and I both max out our 401ks annually ($48k total)
- current net worth = $1.4M & we have no debt
- neither of us will have pensions and our goal is to have $3M by retirement age

I realize 100% stocks is too risky as we get closer to retirement. Are there other investments that would reduce risk as well as diversify?

Any advice is appreciated. Also, there may be similar questions/feedback in these forums but I am not sure where to check.

Weymouth
I'm going to go 100% anti-Boglehead and suggest high yield and emerging market bonds. I do hold a pretty high percentage of high yield, and if I invest enough to qualify for Admiral shares in Vanguard's emerging market fund, will have a pretty high percentage of them, too. As of now I have only a smaller amount in Fidelity's emerging market bond fund. Otherwise I just have some I-bonds, most from the 2%+ days, but also $10k at 0% (ugh - just haven't decided to restart my penalty period for that extra .1% yet.)

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nedsaid
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Re: When to move into bonds

Post by nedsaid » Sun Dec 17, 2017 6:15 pm

tibbitts wrote:
Sun Dec 17, 2017 5:46 pm
Weymouth wrote:
Sat Dec 16, 2017 12:26 pm
I am ~9 years from retirement and am unsure how/when to move into bonds. I have invested 100% in stocks/mutual funds/etfs for years and hate the thought of losing the higher gains. My situation is as follows:
- age 53 and married; both children are done with college
- my wife and I both max out our 401ks annually ($48k total)
- current net worth = $1.4M & we have no debt
- neither of us will have pensions and our goal is to have $3M by retirement age

I realize 100% stocks is too risky as we get closer to retirement. Are there other investments that would reduce risk as well as diversify?

Any advice is appreciated. Also, there may be similar questions/feedback in these forums but I am not sure where to check.

Weymouth
I'm going to go 100% anti-Boglehead and suggest high yield and emerging market bonds. I do hold a pretty high percentage of high yield, and if I invest enough to qualify for Admiral shares in Vanguard's emerging market fund, will have a pretty high percentage of them, too. As of now I have only a smaller amount in Fidelity's emerging market bond fund. Otherwise I just have some I-bonds, most from the 2%+ days, but also $10k at 0% (ugh - just haven't decided to restart my penalty period for that extra .1% yet.)
I believe there is merit to owning high yield and emerging market bonds. Keep in mind that these are sort of hybrids between stocks and bonds. You will get higher returns than from safer bonds but you will sometimes get equity like volatility. I call these phoney stocks, the thing is if you want equity like returns, why not invest in the real thing? In general, stocks are for growth and bonds are for safety. My standard recommendation is Intermediate Term Investment Grade Bonds. The Total Bond Market Index fits the bill well. The maximum diversification benefit between stocks and bonds is with safe bonds, nominal US Treasuries, preferably in the short or intermediate term.
A fool and his money are good for business.

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Re: When to move into bonds

Post by KlangFool » Sun Dec 17, 2017 6:17 pm

OP,

Starting Net Worth $1,400,000
Annual Savings $48,000
Years
Annual Return Rate 9
5.00% $2,701,135
6.00% $2,916,854
7.00% $3,148,786
8.00% $3,398,009
9.00% $3,665,660


You can get there with 70/30. You have no need to take the risk. So, you should change to 70/30 immediately.

KlangFool

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Re: When to move into bonds

Post by KlangFool » Sun Dec 17, 2017 6:19 pm

tibbitts wrote:
Sun Dec 17, 2017 5:46 pm
Weymouth wrote:
Sat Dec 16, 2017 12:26 pm
I am ~9 years from retirement and am unsure how/when to move into bonds. I have invested 100% in stocks/mutual funds/etfs for years and hate the thought of losing the higher gains. My situation is as follows:
- age 53 and married; both children are done with college
- my wife and I both max out our 401ks annually ($48k total)
- current net worth = $1.4M & we have no debt
- neither of us will have pensions and our goal is to have $3M by retirement age

I realize 100% stocks is too risky as we get closer to retirement. Are there other investments that would reduce risk as well as diversify?

Any advice is appreciated. Also, there may be similar questions/feedback in these forums but I am not sure where to check.

Weymouth
I'm going to go 100% anti-Boglehead and suggest high yield and emerging market bonds. I do hold a pretty high percentage of high yield, and if I invest enough to qualify for Admiral shares in Vanguard's emerging market fund, will have a pretty high percentage of them, too. As of now I have only a smaller amount in Fidelity's emerging market bond fund. Otherwise I just have some I-bonds, most from the 2%+ days, but also $10k at 0% (ugh - just haven't decided to restart my penalty period for that extra .1% yet.)
tibbitts,

Why would OP take the risk when he doesn't have to? He only needs about 6.5% to get to 3 million.

KlangFool

tibbitts
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Re: When to move into bonds

Post by tibbitts » Sun Dec 17, 2017 10:22 pm

KlangFool wrote:
Sun Dec 17, 2017 6:19 pm
tibbitts wrote:
Sun Dec 17, 2017 5:46 pm
Weymouth wrote:
Sat Dec 16, 2017 12:26 pm
I am ~9 years from retirement and am unsure how/when to move into bonds. I have invested 100% in stocks/mutual funds/etfs for years and hate the thought of losing the higher gains. My situation is as follows:
- age 53 and married; both children are done with college
- my wife and I both max out our 401ks annually ($48k total)
- current net worth = $1.4M & we have no debt
- neither of us will have pensions and our goal is to have $3M by retirement age

I realize 100% stocks is too risky as we get closer to retirement. Are there other investments that would reduce risk as well as diversify?

Any advice is appreciated. Also, there may be similar questions/feedback in these forums but I am not sure where to check.

Weymouth
I'm going to go 100% anti-Boglehead and suggest high yield and emerging market bonds. I do hold a pretty high percentage of high yield, and if I invest enough to qualify for Admiral shares in Vanguard's emerging market fund, will have a pretty high percentage of them, too. As of now I have only a smaller amount in Fidelity's emerging market bond fund. Otherwise I just have some I-bonds, most from the 2%+ days, but also $10k at 0% (ugh - just haven't decided to restart my penalty period for that extra .1% yet.)
tibbitts,

Why would OP take the risk when he doesn't have to? He only needs about 6.5% to get to 3 million.

KlangFool
Because he is having trouble giving up the return potential of equities and faced with 2-2.5% from traditional bonds might stick with 100% equities.

Not sure 6.5% qualifies as "only" when we're getting the predictions we've been seeing from Bogle and others. Not that riskier bonds will fix that, but nothing else might, either.

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CaliJim
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Re: When to move into bonds

Post by CaliJim » Sun Dec 17, 2017 10:42 pm

dharrythomas wrote:
Sat Dec 16, 2017 4:28 pm
Ben Graham would have recommended you make the move a long time ago. He said that the default position should be 50/50 and that everyone should be somewhere between 75/25 and 25/75. We just all think we know better.
+1
Old Ben was a wise man.

"Lock in" your gains by some buying bonds. Increase your bond allocation to 10%+ asap.

Then create a glide path. By the time you retire, you should be 50% to 60%+ in bonds. And don't wait too long. PE's are almost frothy.

The first 5 to 10 years in retirement are critical. If you experience a 50% decline in stock prices in this early retirement period, it won't be easy to recover....unless you have a significant allocation to bonds.

The risk of only having $750k - $900k to retire on is much worse than the risk of not quite reaching $3m.
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Hyperborea
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Re: When to move into bonds

Post by Hyperborea » Mon Dec 18, 2017 1:38 am

tibbitts wrote:
Sun Dec 17, 2017 10:22 pm
KlangFool wrote:
Sun Dec 17, 2017 6:19 pm
tibbitts wrote:
Sun Dec 17, 2017 5:46 pm
Weymouth wrote:
Sat Dec 16, 2017 12:26 pm
I am ~9 years from retirement and am unsure how/when to move into bonds. I have invested 100% in stocks/mutual funds/etfs for years and hate the thought of losing the higher gains. My situation is as follows:
- age 53 and married; both children are done with college
- my wife and I both max out our 401ks annually ($48k total)
- current net worth = $1.4M & we have no debt
- neither of us will have pensions and our goal is to have $3M by retirement age

I realize 100% stocks is too risky as we get closer to retirement. Are there other investments that would reduce risk as well as diversify?

Any advice is appreciated. Also, there may be similar questions/feedback in these forums but I am not sure where to check.

Weymouth
I'm going to go 100% anti-Boglehead and suggest high yield and emerging market bonds. I do hold a pretty high percentage of high yield, and if I invest enough to qualify for Admiral shares in Vanguard's emerging market fund, will have a pretty high percentage of them, too. As of now I have only a smaller amount in Fidelity's emerging market bond fund. Otherwise I just have some I-bonds, most from the 2%+ days, but also $10k at 0% (ugh - just haven't decided to restart my penalty period for that extra .1% yet.)
tibbitts,

Why would OP take the risk when he doesn't have to? He only needs about 6.5% to get to 3 million.

KlangFool
Because he is having trouble giving up the return potential of equities and faced with 2-2.5% from traditional bonds might stick with 100% equities.

Not sure 6.5% qualifies as "only" when we're getting the predictions we've been seeing from Bogle and others. Not that riskier bonds will fix that, but nothing else might, either.
Of course, that's also 6.5% on top of inflation. That's a pretty tall order.

Didn't somebody in this thread often use a quote about planning on stuff and it not happening so don't plan or something like that? How can they be suggesting planning on 6.5% over inflation over a 9 year period? Wasn't that Klang?
"Plans are worthless, but planning is everything." - Dwight D. Eisenhower

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Hyperborea
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Re: When to move into bonds

Post by Hyperborea » Mon Dec 18, 2017 1:41 am

CaliJim wrote:
Sun Dec 17, 2017 10:42 pm
dharrythomas wrote:
Sat Dec 16, 2017 4:28 pm
Ben Graham would have recommended you make the move a long time ago. He said that the default position should be 50/50 and that everyone should be somewhere between 75/25 and 25/75. We just all think we know better.
+1
Old Ben was a wise man.
He also was a strong advocate of stock picking too. It seems pretty common hereabouts to pull a quote or two from somebody and then ignore that bulk of their work. So, Graham is right about a particular minor point of his work and the rest of it is wrong and we should index? If he was so wise how is that possible?
"Plans are worthless, but planning is everything." - Dwight D. Eisenhower

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Hyperborea
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Re: When to move into bonds

Post by Hyperborea » Mon Dec 18, 2017 2:09 am

Valuethinker wrote:
Sun Dec 17, 2017 8:47 am
Hyperborea wrote:
Sat Dec 16, 2017 10:13 pm
4nwestsaylng wrote:
Sat Dec 16, 2017 8:32 pm
Agree with earlier poster, you should reduce your 100% allocation to stocks by at least 30% Monday morning,ie go immediately to a 70 equity/30 bond at the least, and in fact you might consider tapering even more over the next month or so to a 60/40 position.
Yes, OMG it's a market top. The OP should time the markets and move into bonds right now!!!! Don't think about it, just do it!!!
-----------
Straw man. The logic behind the suggestion of 70/30 is that a 50% bear market right now would be devastating.
No straw man but a summary of the advice given by at least some on this thread.

A 50% drop right now would most likely be very beneficial to neutral for the OP given the 9 years to go and the yearly addition to his portfolio.

A glide to retirement is fine if the OP's date is more firm than flexible. However, what's been suggested by some on this thread isn't a glide but that the OP should turn off his rational functions and sell, sell first thing Monday morning. Don't wait! I would suggest not following blindly the advice of random internet strangers but the OP is free to do what he pleases.

Valuethinker wrote:
Sun Dec 17, 2017 8:47 am
You (and I) gambled in effect-- ran 100% equity until quite late in the game. I am a few years from retirement, but such high equity ratings became scary-- I shut off checking my valuations in 2008/09. It is now 9 years later, and I don't have so much time to make good losses.

<snip> non sequitur about rocket man
I ran 100% from the early 90's until near to retirement through 2.5 recessions. My date wasn't fixed though and as I was retiring reasonably early I had room to adjust the date. I didn't shut off checking the accounts during those downturns but used it as an opportunity to pump more into the markets and was rewarded for it. It was no more a "gamble" than if a more timid investor with a 20/80 portfolio called your allocation a "gamble" because it was more risk than they could bear.

The more fixed the date is then the more important it is to glide. For the OP, his retirement being at an older age the date may be more fixed. With his cash flow to investments and dividends it should a decent glide in from now using that only. If he wants to be at 60/40 by retirement then set a 5% / year shift and use the contributions and dividends. Depending on how the equities do he still may have to sell some to make that target but he should be doing that inside the tax advantaged accounts.
"Plans are worthless, but planning is everything." - Dwight D. Eisenhower

Finridge
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Re: When to move into bonds

Post by Finridge » Mon Dec 18, 2017 2:26 am

I recommend not making any sales of stock that would result in realized capital gains. LIke others have suggested, if you are going to increase your bond allocation, turn off dividend reinvestment, and then use all your dividends (and any additional cash you have for investing) to buy bonds, until you reach your desired allocation.

I suggest using this questionnaire to help determine (and understand the consequences of) the allocation that is the best fit for you.

https://personal.vanguard.com/us/FundsInvQuestionnaire

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Re: When to move into bonds

Post by gvsucavie03 » Mon Dec 18, 2017 6:59 am

Hyperborea wrote:
Mon Dec 18, 2017 1:41 am
CaliJim wrote:
Sun Dec 17, 2017 10:42 pm
dharrythomas wrote:
Sat Dec 16, 2017 4:28 pm
Ben Graham would have recommended you make the move a long time ago. He said that the default position should be 50/50 and that everyone should be somewhere between 75/25 and 25/75. We just all think we know better.
+1
Old Ben was a wise man.
He also was a strong advocate of stock picking too. It seems pretty common hereabouts to pull a quote or two from somebody and then ignore that bulk of their work. So, Graham is right about a particular minor point of his work and the rest of it is wrong and we should index? If he was so wise how is that possible?
This is a pretty dramatic oversimplification. There is plenty of research backing indexing.

birdog
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Re: When to move into bonds

Post by birdog » Mon Dec 18, 2017 7:22 am

nisiprius wrote:
Sat Dec 16, 2017 1:02 pm
As for how to do it, my suggestion is make a start and do it gradually. Choose some bond percentage that is so low that you can bring yourself to do it. 20%? If that's too much to stand, then 10%. If that's too much to stand, then 5%. It's much easier to make a slow, gradual increase than to make a big change because for any big change you start to get anxious about timing.
This is my plan. It’s in my IPS not to change AA by more than 5% in one year so that I’m not tempted to time the market by jumping from stocks to bonds at “all time market highs”.

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Ditchwitch
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Re: When to move into bonds

Post by Ditchwitch » Mon Dec 18, 2017 7:57 am

birdog wrote:
Mon Dec 18, 2017 7:22 am
nisiprius wrote:
Sat Dec 16, 2017 1:02 pm
As for how to do it, my suggestion is make a start and do it gradually. Choose some bond percentage that is so low that you can bring yourself to do it. 20%? If that's too much to stand, then 10%. If that's too much to stand, then 5%. It's much easier to make a slow, gradual increase than to make a big change because for any big change you start to get anxious about timing.
This is my plan. It’s in my IPS not to change AA by more than 5% in one year so that I’m not tempted to time the market by jumping from stocks to bonds at “all time market highs”.
I kinda have been doing it this way....in the past I had a hard time in seeing any good in owning bonds and then started tapering into them so that I had 20% now for about 3 years. Just upped that percentage to 30% and plan to continue to increase it gradually. I am educating myself more so that I better appreciate the conservation aspect better relative to the growth of a portfolio. It helps me to read more about retirement allocation topics and glide path investing etc since that gives me a deeper appreciation of what bonds can do for my portfolio. In the end I think we all have tendencies and I am probably more on the aggressive side so I am not going to fight it too much. I am 56 now and my goal is to to go from a 70:30 now to a 60:40 allocation in 2 years and then be at 50:50 around 60 or so.
“Anyone who has never made a mistake has never tried anything new.” | ― Albert Einstein

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CaliJim
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Re: When to move into bonds

Post by CaliJim » Mon Dec 18, 2017 5:14 pm

Hyperborea wrote:
Mon Dec 18, 2017 1:41 am
CaliJim wrote:
Sun Dec 17, 2017 10:42 pm
dharrythomas wrote:
Sat Dec 16, 2017 4:28 pm
Ben Graham would have recommended you make the move a long time ago. He said that the default position should be 50/50 and that everyone should be somewhere between 75/25 and 25/75. We just all think we know better.
+1
Old Ben was a wise man.
He also was a strong advocate of stock picking too. It seems pretty common hereabouts to pull a quote or two from somebody and then ignore that bulk of their work. So, Graham is right about a particular minor point of his work and the rest of it is wrong and we should index? If he was so wise how is that possible?
I grant you that this is cherry picking of a quote and also argumentum ad verecundiam.

However I have no doubt Graham, the father of value investing, and strong advocate of deep company financial analysis, would advocate index funds over active funds for the average investor, where he alive today to discuss it.
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Re: When to move into bonds

Post by dharrythomas » Mon Dec 18, 2017 10:10 pm

CaliJim wrote:
Mon Dec 18, 2017 5:14 pm
Hyperborea wrote:
Mon Dec 18, 2017 1:41 am
CaliJim wrote:
Sun Dec 17, 2017 10:42 pm
dharrythomas wrote:
Sat Dec 16, 2017 4:28 pm
Ben Graham would have recommended you make the move a long time ago. He said that the default position should be 50/50 and that everyone should be somewhere between 75/25 and 25/75. We just all think we know better.
+1
Old Ben was a wise man.
He also was a strong advocate of stock picking too. It seems pretty common hereabouts to pull a quote or two from somebody and then ignore that bulk of their work. So, Graham is right about a particular minor point of his work and the rest of it is wrong and we should index? If he was so wise how is that possible?
I grant you that this is cherry picking of a quote and also argumentum ad verecundiam.

However I have no doubt Graham, the father of value investing, and strong advocate of deep company financial analysis, would advocate index funds over active funds for the average investor, where he alive today to discuss it.
As a matter of fact, in some later interviews, Graham indicated that the growth of the financial analyst profession, had made it harder to beat the market and that investing in the market would be the way to go. Graham is writing for a general audience and recommends a middle course with limits on risk but not complete risk avoidance. Seems pretty sound to me.

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Re: When to move into bonds

Post by CaliJim » Mon Dec 18, 2017 11:24 pm

Dear Original Poster (OP):

Sorry we got sidetracked..... back to your question about when and how much in bonds, how to diversify, where to look for more info:

Regarding where to look:

1) Most of our collected wisdom on retirement planning is in this book -
"Boglehead Guide to Retirement Planning",
https://www.amazon.com/gp/product/04704 ... ads.org-20. (If I recall correctly - profits go to a good charity.)

2) And much of that is also here:
https://www.bogleheads.org/wiki/Outline ... l_planning
https://www.bogleheads.org/wiki/Outline ... t_planning

3) Getting into bonds is an asset allocation question. Here is the wiki on that: https://www.bogleheads.org/wiki/Asset_allocation

4) Which then begs the Risk question. Got a wiki on that too: https://www.bogleheads.org/wiki/Risk_tolerance

Are you getting any answers that resonate with you? Any more thoughts / questions?

IMHO: A good intermediate term investment grade or better bond index fund with a low expense ratio would be a good way of adding bonds to your portfolio. If in 401k/IRA/tax advantaged space - 15% to 25% into Vanguard Total Bond Market Fund (VBMFX or BND) would be a good way to get into bonds now. Or, if in taxable accounts, an Intermediate term tax-exempt bond fund (something like: VWITX or VCADX for Cali) would be a good choices too.

How much in bonds is frequently discussed. A useful rule of thumb is "Age in Bonds, the rest in Equity". Some say "Age less 10 in bonds". There is also a pyramid approach, that I won't go into that. You can use the site's search box to look for postings on "asset allocation", "age in bonds", "glide path", etc, etc...
-calijim- | | For more info, click this Wiki

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