I’m 32 yo and have been doing an annual rebalancing of retirement portfolio in December. Last year I increased bond allocation from 10% to 20%. Turned out bonds were the least bad part of my portfolio (still lost 14%).

Hearing a lot that the setup for bonds looks better in 2023 given 1) slowing Fed rate hikes and 2) likelihood of recession. Thoughts on increasing bond allocation? Part of me realizes I’m probably over complicating this and better off just buying equities and holding.

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FWIW, I’m 29M and 100% in equities since I was 21.

Why? Because I’m not retiring until 60+ and by then, my equities will likely be worth more than they are today.

Yes, I am down a significant amount due to current economic downturn, but I can take the volatility right now because it likely will go back up over time. I am still contributing as normal to DCA.

Lastly, do you want to rebalance and buy equities when they’re at high or low? If low, now is the time.

Disclaimer: this is not financial advice, just my personal allocation. I tend to take bigger risks…

likeuplifting

Ya never know - USA is happy sue culture ma brotha

Personally, even 20% seems high for your age. Everyone has their own risk tolerance though.

likeuplifting

No one knows. 10% or 20% is reasonable. 0% is also reasonable at your age. I wouldn’t be concerned about it and just keep investing

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I’m 100% in FNILX for all my retirement and individual brokerage accounts. 31 years old and don’t expect to tap into them until 2040-2050… plenty of time for money to recover from any losses and to capture the better returns of stocks versus bonds over the long-term.

Also be mindful of short-term capital gains tax for selling any stocks less than a year after buying. I just avoid this altogether by not doing anything fancy with my investments.

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That is a great fund for tax advantaged accounts but I personally would avoid it in a brokerage account since it can only be held at Fidelity.

In the book “The simple path to wealth”, the author mentions that 75/25 stock-bond portfolio tends to perform marginally better than all stocks since bonds help against deflation. So if you are willing to invest the time and energy to rebalance your portfolio every year, it’s worth it. However, it’s only marginally better so you won’t go wrong even with a 100% stock portfolio.

I support the comment above of investing in bonds in tax advantaged account to avoid any short term taxes on the interest earned.

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Check out hedgefundies excellent adventure on bogleheads or Reddit.

Because it has done really well this year?

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