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The 70/30 split on stocks to bonds is a little suspect. Traditionally what you want to do is start your career with high (probably 100%) stock allocation and sl
by awinder 8y ago
The 70/30 split on stocks to bonds is a little suspect. Traditionally what you want to do is start your career with high (probably 100%) stock allocation and slowly move towards more more bond allocation with time. There’s no right single number there so maybe that’s where 70/30 came from, but yeah, don’t do that for your entire career.
- xenadu02 8y agoMany people save nothing so saving something at 70/30 is a great first step. If you even understand the difference between stocks, bonds, EFTs, index funds, mutual funds, etc then you're already ahead of the curve and this advice is too simplistic for you.
- fredophile 8y agoA 70/30 or 60/40 split with regular rebalancing can smooth out market fluctuations. When stocks do well this pulls money out and locks in the gains at a time when psychologically you want to let it rise. When stocks are doing badly this also forces you to buy at a discount when you might be inclined to keep the money on the sidelines out of fear of future losses.
- ydnaclementine 8y ago70/30 is fine, you just want some in bonds. The original split of 50/50 between stocks and bonds is prescribed by Ben Graham in his book the The Intelligent Investor, but he does keep it flexible.