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Stocks to bonds - general question

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Money Talk > Investing, Stocks and Bonds

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Ted
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Stocks to bonds - general question  Reply with quote  

I'm wondering, in general, what percent you think one should have between stocks and bonds at certain ages.
My wife and I are in our early 40's,
We both have IRA's, and a Roth we're contributing to.
Our portfolio is basically 15% in bonds, 85% in stocks (our stocks include 15% international).

Maybe more specific information is needed to give an accurate answer, but just "in general" opinions would be appreciated.

Thx!


Last edited by Ted on Sat Jun 04, 2016 6:51 pm; edited 1 time in total
Post Sat Jun 04, 2016 6:13 pm
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oldguy
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What you are doing sounds about right, ie, 85%/15%. We stayed with 100%/0% until about age 55, then we started transitioning to bonds. Now at age 77, we have 50%/50%.

In general, most of us have about 30yrs for wealth-building, then we move toward wealth-preservation. The speed of transition depends on your risk aversion, how well you have done, etc. Eg, if you have $2M or $3M at age 50, you'll want to protect/preserve it - but if have only $250,000 you'll probably want to stay with wealth-building a while longer.

I use the SP500 Index for wealth-building, it is a good diversification of most of US companies and their international divisions. Also, it is unmanaged - historically, unmanaged funds do better than managed funds (due to overhead costs and excess trading costs).

As for what account-type to keep it in - not too much real difference. With a Roth account you pay the taxes before you invest, with an IRA/401 you pay the taxes when you sell. And with your taxable accounts, you pay before your invest and pay cap gain on profit when you sell, IF you sell (if it is inherited there is no tax).
Post Sat Jun 04, 2016 6:46 pm
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Ted
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Thank You.
I figured I was about right.
I have some regrets, though. I've always been good about investing (since I started working in early 20's) so that's good (same with my wife) but for whatever reason (uneducated) we both were very conservative (I figure about 70% risk, 30% safe) so, we did things a little backwards when we were younger, and as a result, are behind some.
So, I want to make sure I'm not being too conservative anymore, but don't want to be Too Too risky, either.


Thanks again.
Post Sat Jun 04, 2016 7:49 pm
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ken-do-nim
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Re: Stocks to bonds - general question  Reply with quote  

quote:
Originally posted by Ted
I'm wondering, in general, what percent you think one should have between stocks and bonds at certain ages.
My wife and I are in our early 40's,
We both have IRA's, and a Roth we're contributing to.
Our portfolio is basically 15% in bonds, 85% in stocks (our stocks include 15% international).

Maybe more specific information is needed to give an accurate answer, but just "in general" opinions would be appreciated.

Thx!


I'm in my early 40s as well. I have $15,000 in cash for an emergency fund, $10,000 in bonds as more-or-less an extension of the emergency fund, and the rest is in stocks. 20 years left until retirement, as oldguy said we're in the wealth building phase, get the maximum value out of the money that you don't need for a long time.
Post Fri Sep 09, 2016 6:42 pm
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