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If you had a 100% stock allocation for your 401k, you still would be fine, provided you picked broad market indexes. In fact, you'd have beaten most other portf
by jorblumesea 8y ago
If you had a 100% stock allocation for your 401k, you still would be fine, provided you picked broad market indexes. In fact, you'd have beaten most other portfolios.
It's not that 100% stocks doesn't give you long term return, on a 30 year spread, it gives better returns (although more volatile) than more balanced portfolios. 10% bonds, while you're young, is mostly just to keep you from freaking out and selling at a low point. If you have an iron will, there's nothing mathematically wrong with that level of risk.
My guess is there's more to this story than poor allocation.
Some really good Bogleheads discussion here:
https://www.bogleheads.org/forum/viewtopic.php?f=10&t=196011 https://www.bogleheads.org/forum/viewtopic.php?f=10&t=196011
- matz1 8y agoI think its considerably easier now to not freak out when the market crash but back in the 80s ?
- jorblumesea 8y agoPerhaps, but the financial world is so much more complex now. All sorts of crypto currencies, tens of thousands of EFTs and index funds. Lots of FUD via social media and the internet. A million and one ways to lose your money. That being said, indexing is common now but Active was more common in the 80s, so who knows how much money was lost on ineffective managers.