60/40 [Portfolio asset allocation]

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Vti777
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Joined: Sat Nov 16, 2019 3:31 pm

60/40 [Portfolio asset allocation]

Post by Vti777 » Sat Nov 16, 2019 3:36 pm

Is the 60%/40% investment still a good thing right now given that the market is way overdue for a major pullback? ( was thinking of investing 60% in BND and BNDX and 40% in VTI and VXUS )

Silk McCue
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Re: 60/40 [Portfolio asset allocation]

Post by Silk McCue » Sat Nov 16, 2019 4:27 pm

Welcome to Bogleheads!

What you are describing is market timing plain and simple and we don’t recommend that here. It is a fools errand.

There is no way to predict when the market will go down, how deeply it will go down, and for how long it will stay down. You simply need to decide what the proper asset allocation is for your need, willingness, and ability to take risk and align your investments with that.

Please take time to take it advantage of our free resources to give you an education regarding our philosophy starting here.

https://www.bogleheads.org/wiki/Getting_started

Cheers

Trader Joe
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Re: 60/40 [Portfolio asset allocation]

Post by Trader Joe » Sat Nov 16, 2019 6:05 pm

Vti777 wrote:
Sat Nov 16, 2019 3:36 pm
Is the 60%/40% investment still a good thing right now given that the market is way overdue for a major pullback? ( was thinking of investing 60% in BND and BNDX and 40% in VTI and VXUS )
Hi and welcome to the forum.

The stock market will always go up and will go down. This is normal and expected.

Your own asset allocation will depend on your ability to accept those up and down movements.

Having decades of experience and being well versed in the historical up and down movements of the stock market, we are 100% invested in VFIAX/VTSAX.

Our emergency fund is in parked in VMMXX.

We are very happy with our performance and we will never change.

Topic Author
Vti777
Posts: 4
Joined: Sat Nov 16, 2019 3:31 pm

Re: 60/40 [Portfolio asset allocation]

Post by Vti777 » Sun Nov 17, 2019 1:19 am

thank you for your reply but just wondering when do you pull the trigger on your investment(s)?

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Eagle33
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Re: 60/40 [Portfolio asset allocation]

Post by Eagle33 » Sun Nov 17, 2019 1:57 am

Vti777 wrote:
Sun Nov 17, 2019 1:19 am
thank you for your reply but just wondering when do you pull the trigger on your investment(s)?
If by "pull the trigger" you mean to rebalance your asset allocation (AA), then there are 2 main approaches to rebalancing.
1. rebalance based on the calendar (choose either annually, semi-annual or quarterly)
2. rebalance when AA exceeds your predefined AA %band (often chosen is 5%/25%)

Please note that Bogleheads don't market time so don't focus on price when rebalancing.
Rocket science is not “rocket science” to a rocket scientist, just as personal finance is not “rocket science” to a Boglehead.

longinvest
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Re: 60/40 [Portfolio asset allocation]

Post by longinvest » Sun Nov 17, 2019 8:27 am

Vti777 wrote:
Sat Nov 16, 2019 3:36 pm
Is the 60%/40% investment still a good thing right now given that the market is way overdue for a major pullback? ( was thinking of investing 60% in BND and BNDX and 40% in VTI and VXUS )
Yes, it's an excellent Bogleheads portfolio, not concentrated into either of the two major asset classes. It's probably a good idea to get it using the all-in-one LifeStrategy Moderate Growth fund (VSMGX, globally-diversified balanced index 60/40 stocks/bonds). The fund manager takes care of management hassles like rebalancing. Here's a post about it.
Vti777 wrote:
Sun Nov 17, 2019 1:19 am
thank you for your reply but just wondering when do you pull the trigger on your investment(s)?
Bogleheads don't time the market. The best time to invest money is as soon as it's available to invest. The beauty of using VSMGX is that one doesn't have to worry about choosing a rebalancing schedule or other hassles.

Good luck!
Bogleheads investment philosophy | One-ETF global balanced index portfolio | VPW

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1789
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Location: OR

Re: 60/40 [Portfolio asset allocation]

Post by 1789 » Sun Nov 17, 2019 10:21 pm

Trader Joe wrote:
Sat Nov 16, 2019 6:05 pm
Vti777 wrote:
Sat Nov 16, 2019 3:36 pm
Is the 60%/40% investment still a good thing right now given that the market is way overdue for a major pullback? ( was thinking of investing 60% in BND and BNDX and 40% in VTI and VXUS )
Hi and welcome to the forum.

The stock market will always go up and will go down. This is normal and expected.

Your own asset allocation will depend on your ability to accept those up and down movements.

Having decades of experience and being well versed in the historical up and down movements of the stock market, we are 100% invested in VFIAX/VTSAX.

Our emergency fund is in parked in VMMXX.

We are very happy with our performance and we will never change.
I like this. Just curious what do you use for fixed income? Do you keep extra cash other than emergency fund?
"My conscience wants vegetarianism to win over the world. And my subconscious is yearning for a piece of juicy meat. But what do i want?" (Andrei Tarkovsky)

surfstar
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Location: Santa Barbara, CA

Re: 60/40 [Portfolio asset allocation]

Post by surfstar » Sun Nov 17, 2019 10:25 pm

We (bogleheads) don't "pull the trigger" on investments.
When you have the funds, you invest them.
For some, that is every two weeks, for others it may be a bonus, or business sale/proceeds, etc.

averagedude
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Re: 60/40 [Portfolio asset allocation]

Post by averagedude » Sun Nov 17, 2019 10:45 pm

Vti777 wrote:
Sat Nov 16, 2019 3:36 pm
Is the 60%/40% investment still a good thing right now given that the market is way overdue for a major pullback? ( was thinking of investing 60% in BND and BNDX and 40% in VTI and VXUS )
It depends on your goals, age, and risk tolerance. It is considered a moderate allocation and is probably the most recommended asset allocation in the finance industry. It is just as reasonable today as it was yesterday.

Topic Author
Vti777
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Joined: Sat Nov 16, 2019 3:31 pm

Re: 60/40 [Portfolio asset allocation]

Post by Vti777 » Mon Nov 18, 2019 2:19 pm

longinvest wrote:
Sun Nov 17, 2019 8:27 am
Vti777 wrote:
Sat Nov 16, 2019 3:36 pm
Is the 60%/40% investment still a good thing right now given that the market is way overdue for a major pullback? ( was thinking of investing 60% in BND and BNDX and 40% in VTI and VXUS )
Yes, it's an excellent Bogleheads portfolio, not concentrated into either of the two major asset classes. It's probably a good idea to get it using the all-in-one LifeStrategy Moderate Growth fund (VSMGX, globally-diversified balanced index 60/40 stocks/bonds). The fund manager takes care of management hassles like rebalancing. Here's a post about it.
Vti777 wrote:
Sun Nov 17, 2019 1:19 am
thank you for your reply but just wondering when do you pull the trigger on your investment(s)?
Bogleheads don't time the market. The best time to invest money is as soon as it's available to invest. The beauty of using VSMGX is that one doesn't have to worry about choosing a rebalancing schedule or other hassles.

Good luck!
thank you!

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ruralavalon
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Location: Illinois

Re: 60/40 [Portfolio asset allocation]

Post by ruralavalon » Mon Nov 18, 2019 3:44 pm

Vti777 wrote:
Sat Nov 16, 2019 3:36 pm
Is the 60%/40% investment still a good thing right now given that the market is way overdue for a major pullback? ( was thinking of investing 60% in BND and BNDX and 40% in VTI and VXUS )
How do you know that "the market is way overdue for a major pullback"? I don't know that.

Don't try to guess what the market will do next. Please read this: "What if you only invested at market peaks?"

In my opinion a 60/40 asset allocation is suitable for most people in most situations. Here are two good articles on the classic 60/40 stock/bond allocation:
1) Peter Bernstein, Bloomberg Personal Finance (2002) , "The 60/40 Solution"; and
2) Rick Ferri, etf.com (2/25/2015), "Wisdom Of 60/40 Portfolios Timeless"".

Vti777 wrote:
Sun Nov 17, 2019 1:19 am
thank you for your reply but just wondering when do you pull the trigger on your investment(s)?
I always invested whenever had money available to invest. That was a regular contribution every pay period, and more whenever I had a bonus or other lump sum available.
Last edited by ruralavalon on Mon Nov 18, 2019 3:49 pm, edited 1 time in total.
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livesoft
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Re: 60/40 [Portfolio asset allocation]

Post by livesoft » Mon Nov 18, 2019 3:47 pm

Vti777 wrote:
Sat Nov 16, 2019 3:36 pm
Is the 60%/40% investment still a good thing right now given that the market is way overdue for a major pullback? ( was thinking of investing 60% in BND and BNDX and 40% in VTI and VXUS )
I sure hope so because I've been around 60/40 for years and expect to stay there for another 50 years or more.
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livesoft
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Re: 60/40 [Portfolio asset allocation]

Post by livesoft » Mon Nov 18, 2019 3:49 pm

Vti777 wrote:
Sun Nov 17, 2019 1:19 am
thank you for your reply but just wondering when do you pull the trigger on your investment(s)?
Pull the trigger? Or pull the plug?
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Topic Author
Vti777
Posts: 4
Joined: Sat Nov 16, 2019 3:31 pm

Re: 60/40 [Portfolio asset allocation]

Post by Vti777 » Thu Nov 21, 2019 5:29 pm

the plug

Bir48die
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Re: 60/40 [Portfolio asset allocation]

Post by Bir48die » Thu Nov 21, 2019 6:05 pm

I was 100% equities until last year. At 63 I went to 60/40. I have been retired almost four years.

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