CaliforniaMan
Full time employment: Posting here.
I used to be 100% stocks, then as my age increased started adding bonds, now 70/30. If you want the potential for wealth accumulation you want a higher stock allocation, if you want less volatility you need a higher bond allocation.
My question is if it would be better to keep a certain number of years expenses in bonds, rather than a fixed AA.
For example if you have 100 years of probable expenses in bonds, I would assume you would put the rest in stocks, no matter how high the stock allocation would be. You will never run out of money no matter how badly stocks do.
But what if you have 5 or 10 or 20 years projected withdrawals in bonds. Should you put the rest in stocks, rather than keep a fixed AA?
If so what is the correct number of years you should have in bonds?
I have been pondering this for a while and it seems to me if you have 5 to 10 years in bonds that is enough. But I am wondering what others think about this. Is it too low, too high or just plain silly.
My question is if it would be better to keep a certain number of years expenses in bonds, rather than a fixed AA.
For example if you have 100 years of probable expenses in bonds, I would assume you would put the rest in stocks, no matter how high the stock allocation would be. You will never run out of money no matter how badly stocks do.
But what if you have 5 or 10 or 20 years projected withdrawals in bonds. Should you put the rest in stocks, rather than keep a fixed AA?
If so what is the correct number of years you should have in bonds?
I have been pondering this for a while and it seems to me if you have 5 to 10 years in bonds that is enough. But I am wondering what others think about this. Is it too low, too high or just plain silly.
Last edited: