55% Bonds: This gives me a nice 3% per year and keeps me safe in case all the other stuff crashes. It's not safe to assume bond markets can't crash. You may ke

55% Bonds: This gives me a nice 3% per year and keeps me safe in case all the other stuff crashes. It's not safe to assume bond markets can't crash. You may keep your 3% but total value can get cut if the interest rate rises. I just checked their holdings of BND [http://bit.ly/fSlaO3 http://bit.ly/fSlaO3], and they've got a good amount of money tied up in US Gov't Housing based GSE's. I don't think they will get zerohedged like many think, but there is extreme tail risk in these positions. You could also say the same about the bond holdings and if we get inflation and rates rise, it's not going to be that great of a bet, but then you're getting into macro trades, which clearly are useless since the market takes a random walk anyway.