jIMOh
Thinks s/he gets paid by the post
I am 18 years from FIRE at earliest, maybe 22-25 years depending on things.
I had been close to 100% equities thus far and am looking at choices for an 80-20 or 90-10 portfolio.
I had 5% in bonds earlier in 2008 (95-5) selling off 1% of equities every 6 months to move to 80-20 over a 10 year period.
I decided to get more aggressive (sell 4% equity per year over 5 years) so I have cash to buy on next dip.
When accumulating, what are the pros/cons of using cash vs bonds as the asset class to rebalance to?
The cash (money market funds) I am looking at show 5 and 10 year returns around 4%.
The bond funds I am looking at show a 4-6% return over same 5 and 10 year periods.
My bond funds in 2008 lost value... so I am thinking that cash makes sense so I have it when I want to rebalance... but looking for other comments to see if there is a point of view I am missing.
I am down about 40-60% in all accounts right now at 95% equity. NOT SELLING ANYTHING until I recover my losses. I am directing a small percentage (3%) to bonds and another 3% to cash right now and will rebalance after a recovery. What I rebalance to (bonds or cash) is the question.
I had been close to 100% equities thus far and am looking at choices for an 80-20 or 90-10 portfolio.
I had 5% in bonds earlier in 2008 (95-5) selling off 1% of equities every 6 months to move to 80-20 over a 10 year period.
I decided to get more aggressive (sell 4% equity per year over 5 years) so I have cash to buy on next dip.
When accumulating, what are the pros/cons of using cash vs bonds as the asset class to rebalance to?
The cash (money market funds) I am looking at show 5 and 10 year returns around 4%.
The bond funds I am looking at show a 4-6% return over same 5 and 10 year periods.
My bond funds in 2008 lost value... so I am thinking that cash makes sense so I have it when I want to rebalance... but looking for other comments to see if there is a point of view I am missing.
I am down about 40-60% in all accounts right now at 95% equity. NOT SELLING ANYTHING until I recover my losses. I am directing a small percentage (3%) to bonds and another 3% to cash right now and will rebalance after a recovery. What I rebalance to (bonds or cash) is the question.