cute fuzzy bunny
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Yeah sure. You're just trying to see if you can get another 15 page post out of us.
Its not a matter of it being "different this time", its been plenty different enough already!
Some bondage is not necessarily bad; for example in the 3 year down period we just experienced, bonds did very well. They also outperformed stocks for a 3 year period from 1939-1941. In individual years, from 1900-1980, bonds outperformed stocks in 3 out of 10 years.
In periods of high P/E ratio's (like now), generally bonds subsequently outperformed stocks...at some point...although usually not too many years away.
Theres also the TYPE of bonds you might consider for portfolio diversification...convertibles, high yield, gnma's, and TIPS each have some characteristics that can diversify a stock portfolio, reduce volatility, and still provide a fairly pleasing rate of return. I wouldnt buy a lot of them NOW with interest rates where they are and with a mind for where they're going to go, but once the interest rate tomfoolery is over, they would be good buys.
A 5 year cash cushion in front of your all stock portfolio might buffer it out for you. I just think about having 150-200k of my money barely staying ahead of inflation to act as a safety net.
Reminds me of folks who drive their sports cars at mach 12 up the Pacific Coast Highway...about 500 feet down the cliff to the ocean and no guard rail...with the presumption that the odds of a blowout being in their favor.
Lots of fun, plenty of adrenaline surges here and there, and the odds are certainly in your favor. And at least you have plenty of time to contemplate things between the time you leave the road and the time you hit the water...
But again, if you arent withdrawing or withdrawing very little, then I wouldnt worry...but as has already been pointed out, if you dont need much, why are you shooting for such a high return on your investments? Pre-ER, I can see it, post-ER I'm not so sure.
Its not a matter of it being "different this time", its been plenty different enough already!
Some bondage is not necessarily bad; for example in the 3 year down period we just experienced, bonds did very well. They also outperformed stocks for a 3 year period from 1939-1941. In individual years, from 1900-1980, bonds outperformed stocks in 3 out of 10 years.
In periods of high P/E ratio's (like now), generally bonds subsequently outperformed stocks...at some point...although usually not too many years away.
Theres also the TYPE of bonds you might consider for portfolio diversification...convertibles, high yield, gnma's, and TIPS each have some characteristics that can diversify a stock portfolio, reduce volatility, and still provide a fairly pleasing rate of return. I wouldnt buy a lot of them NOW with interest rates where they are and with a mind for where they're going to go, but once the interest rate tomfoolery is over, they would be good buys.
A 5 year cash cushion in front of your all stock portfolio might buffer it out for you. I just think about having 150-200k of my money barely staying ahead of inflation to act as a safety net.
Reminds me of folks who drive their sports cars at mach 12 up the Pacific Coast Highway...about 500 feet down the cliff to the ocean and no guard rail...with the presumption that the odds of a blowout being in their favor.
Lots of fun, plenty of adrenaline surges here and there, and the odds are certainly in your favor. And at least you have plenty of time to contemplate things between the time you leave the road and the time you hit the water...
But again, if you arent withdrawing or withdrawing very little, then I wouldnt worry...but as has already been pointed out, if you dont need much, why are you shooting for such a high return on your investments? Pre-ER, I can see it, post-ER I'm not so sure.