The Money Mustache Community
Learning, Sharing, and Teaching => Investor Alley => Topic started by: Ferrisbueller on December 17, 2017, 07:43:09 AM
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In my portfolio ive skipped bonds in favour of multi asset cash+ funds that maintain a volatility target. They are doing what they say on the tin but these are unusual times (very long bull run likely to end in the short to medium terms) and I wonder if there is a crash will bonds have a better correlation benefits?
Any thoughts or good articles?
Ps at least a 10 yr investment terms, not trying to time the market but rather achieve optimal asset allocation. Bout 70% global equity aa at present and 20% target volatility funds with balance in bonds/cash.
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I keep about 40% in debt related instruments. Mostly closed end funds that employ 30-40% leverage to boost yield.
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I am around there with a roughly 62/38 stock/bond mix. We are pretty close to retirement though, so the downside of a crash outweighs the benefit of further stock market gains. Once we're a few years into retirement, we'll have some other income sources like SS and some small pensions, so I'll probably go to more like a 70/30 mix then.
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I'm going for 70/30 stock/bonds but I think 60/40 would work pretty well as well assuming you are following a smart withdrawal process. I recommend reading McClung's living off your money because it shows that higher bonds percentages in your portfolio can work pretty well.