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I've always seen the 60/40 or 70/30 recommended split between equities and bonds/fixed income. If your investment timeframe is 20+ years, then why can it not be 100% equities? Presumably the bond portion is for diversification, but in my mind this diversification is significantly reducing your expected returns from equities over the longhaul.
Assuming an imaginary portfolio of one equity index fund and one bond fund, if we can expect about an 8% return from the equity fund over the 20 year period, why should someone add in the bond fund that has an expected return of 5% effectively bringing down the expected return of the portfolio if it was 100% equities. At this moment I'm 100% equities and I have no plans to change this given I am 20 years from FIRE. I'm curious as to where this "wisdom" came from...
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