4 ms·
It's probably a great time to shift to a 60/40 portfolio. Rates were too low over the last decade for bonds to provide that offset. That's changed now.
by just_boost_it 3y ago
It's probably a great time to shift to a 60/40 portfolio. Rates were too low over the last decade for bonds to provide that offset. That's changed now.
- than3 3y agoI disagree, there are a number of very large ETF's and other securities holding bonds which have not correctly valued the bonds at current or future bond prices in this hyper-inflationary environment. A bond is only worth the sum of its interest and principal payments over a period of time. In any market that exceeds 2% inflation per annum, you have to account for the additional inflation in the future remaining coupon payments as well as during the elapsed period's actual inflation. This requires a certain amount of projection simply to adequately protect principal. If you argue to get into bonds generically without considering the facts, you are promoting to people to burn their hard-earned money in effigy. Yes a bonds 60/40 portfolio is standard financial advice, but we are not living in standard times. My parents followed that advice during 2008 and lost most of their retirement. I'm not saying anyone should do anything, I'm saying you need to do what's best for you and proper valuation is part of that, and your response seems to have remained silent on that part. Risk management is crucial for any kind of investment; and there are risks today which we have not dealt with in the past 20-30 years.