FUEGO
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- Joined
- Nov 13, 2007
- Messages
- 7,746
I know the standard advice is to have some significant proportion of bonds in your portfolio no matter how old or young you are. But this article does a good job explaining why it might be better to go with a high equities allocation (given certain caveats): The Path to 100% Equities
I'm at around 95-97% equities in my 30's, and the article makes a lot of sense to me. I'm not really concerned about risk in the sense of suffering from a higher standard deviation than a 60/40 portfolio would have.
We're only spending about 2.7% of our portfolio which is just above the dividend yield and well below the earnings yield (even at today's valuations). And we are comfortable adjusting spending downward if we enter a prolonged market downturn.
Thoughts?
[The] data suggests any asset allocation from 60-100% equities has about the same chance of success (90%+.) I more or less assume anything above 80% success rate is false confidence. The future will likely have many Black Swans. You never know if Tyler Durden is going to erase the debt record, Simian flu will wipe out 90% of the human race, or a terrorist will detonate a dirty bomb in downtown Manhattan.
I'm at around 95-97% equities in my 30's, and the article makes a lot of sense to me. I'm not really concerned about risk in the sense of suffering from a higher standard deviation than a 60/40 portfolio would have.
We're only spending about 2.7% of our portfolio which is just above the dividend yield and well below the earnings yield (even at today's valuations). And we are comfortable adjusting spending downward if we enter a prolonged market downturn.
Thoughts?
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