What is you mix between stocks and bonds?

BondInvestor

The idea of the 60 stock / 40 bond portfolio seems to be very dated (although, I still believe this is a good mix for most people). Critics of this idea tend to focus on the following themes: 1) A stock and bond portfolio is not very diversified. It should include commodities and real estate as well. 2) Asset mix should be customized to the individual's financial needs. For example, a retiree should have more bonds than stocks. And as the average lifespan increases, the typical holdings of stocks should be higher than 60%. 3) Bonds are just overpriced right now. Why would you want to own an overpriced asset.

Today's article in Learn Bonds's is http://www.learnbonds.com/how-expensive-are-bonds-relative-to-stocks-now/

MaxBialystock

My mix is now approx. 55% stocks, 45% bonds, at 59 years old, retired early. Wife works, medical coverage through her. The deed to the house I'm in actually lists all of us seven siblings, after dad's death. So I don't count the house as an asset. When sold---who knows when?--- I'll receive one-seventh. We could stay here pretty much indefinitely. But I surely don't WANT to.

ron

Reply to @MaxBialystock: this is a suggested AA that a money manager showed in a newsletter last August.

Age
Near Cash
Fixed Income
Risk Assets

20-45
1%
0%
99%

45-55
1%
9%
90%

55-Retired
5%
15%
80%

Retired
5%
20-30%
75-65%

MaxBialystock

Thank you, Ron. I'm looking for my equity funds to provide better results than my bonds for quite a while. Rather than take the time and effort to rebalance and re-jigger everything, I'll watch it become bigger over time in proportion to my fixed income assets. I was surprised last month: My PREMX had, back in '10, been delivering .07 cents a share every month. Lately, it's been .06 cents per share. In June, it was a bit more than .05 cents per share. Dang....... I see a lot about DBLTX, but hardly a thing about the DL fund I own: DLFNX. First time I can truly recall that my balance sits below what I'd put into any fund investment. Just the slightest bit. I'll stick it out.

Charles

Exited nearly all bond holdings Monday, June 10 after BOND crossed 200 SMA first week of June. I should not have waited as long as I did. We've all been discussing this very unwind since last year - it has been so well anticipated. The roll-off started May Day, has shown almost no resistance, and has yet to regain any upward momentum. Holding more cash than ever. Will continue to look for opportunities to keep deploying in financials, energy, and basic materials...if the latter EVER stops falling. Three top fund holdings: AQRIX, WBMIX, FAAFX. And, remain heavy BAC.

Charles

Reply to @ron: Unbelievable. Wonder what the AA recommendation would have been in March 2009?

ron

Reply to @Charles: Don't know if you are retired but a different story when you are in retirement and fixed income might be at least your age, which means I should have about 80% but no where near that. Better it should be what the first post shows, 20-30%. I never thought I would say this, but thinking of selling all fixed except about 10% and what ever my balanced or Equity income funds have. Am I stupid?

Hogan

Reply to @MaxBialystock: You and your 7 siblings are listed on your Dad's deed to his house? Are you and your siblings joint tenants or is it some type of transfer on death (TOD). You know if your siblings own it their spouses own the real estate too. If you and all of your siblings want to sell it and all of you are married the deed would require 14 signatures! What if somebody's marriage is on the rocks, odds are somebody's is not the best and won't sign. If the house is valuable I think trying to avoid probate this way may not be the best way to go--at least review the situation with someone that knows your state's laws. Maybe you already have.

MaxBialystock

Reply to @Hogan: It's good of you to be on top of this prospect for my sake, thank you. I truly don't know the ins-and-outs of it all. Our names were all entered as co-owners in my parents' Will before my dad died. (Mother still living, 83, living in the condo she and step-dad had together, but step-dad is gone now, too.) The issue you raise seems like a very obvious thing that was missed, somewhere along the line. ...There have been some divorces among us along the way through the years. Only three of us are married. I dunno exactly how old the home is, but it wasn't new when we moved-in, back in '60. (Price: $13.9K ---HOW THINGS HAVE CHANGED!) Modest, two-story. Crowded urban residential neighborhood. This city's gone to hell in the past few decades. Value of the house? Maybe $130K, maybe more.

Junkster

Reply to @Charles: Charles, although I believe moving averages are far too lagging of an indicator if you are into timing, it's better than having no exit plan whatsoever. I am glad to see you coming around to the concept of momentum. That said, why do you hold AQRIX?? If moving averages are your thing and certainly if momentum is your thing I don't understand the logic of holding AQRIX during its recent steep decline. Moving averages or any type of momentum indicator would have had you long gone.

Charles

Reply to @Junkster: Ha! You know. Based on 10-mo SMA, I should have been out of AQRIX in April:



But AQRIX employs its own dynamic allocation strategy - it's supposed to anyway, so I don't want to mess with it. In different ways, so do my other top fund holdings: WBMIX and FAAFX. The strategies used with these three appeal to me and I'm impressed with their managers (Asness, Redleaf, and Berkowitz).

I am applying the trend following method with the more passive DODGX - DODIX pair, as posted previously. Ditto with BOND - Cash. Doing well so far...my thanks to Flack and Faber.

As for the lag, I already drive myself crazy at 10-mo, so I've been resisting temptation to shorten-up. But I'm curious about other indicators, if you'd like to share.

Thanks man.

johnN

long term investors, not a short term trader
age early 40s. ~25+ yrs until retirement; 401K/tsp ~85s% stocks:15s% bonds. but buying bonds in my private account YTM ~ average 7%...approximately 60s% stocks 40s% bonds in private account

you may need to define and come up w/ a plan/goals for yourself before deciding these factors

JohnChisum

Late 50's and retired. Rejiggered my bond allocation down to 27% with all short term funds. 15% cash at the moment, the rest in equities split almost even between USA and Intl.

Sven

Reply to @Charles: Concur with your observation. Bonds are doing okay up till May and now they are trailing badly. We shifted most of our bonds to balanced/asset allocation and value funds, VWELX, VWINX, and VEIPX. Only one we are keeping is OSITX and TGTRX. With respect to AQRIX we sold our positions because I have had hard time explaining AQR's strategy to my spouse. And this is my mistake. In the meantime I am letting cash to build up more than usual.