The long-term expected return of stocks is clearly higher than that of bonds. So if the 3-4% you plan to withdraw from your ETFs is only "nice to have" but not "must have" and you can do without them in bad years when the market is down until it recovers (and that can take several years), then you can go all stocks.So if I can live several years comfortably on my pension and a rental property in case of market crash, you don't see any need for bonds?
The other factor is your risk tolerance: can you stand watching your money melt 50% and take years to recover? Imagine that you go all in with stocks and we get a repeat of the 1998-2008 decade. Can you stand the slow painful 35% drop over 3 years of the dotcom crash. Then the slow recovery ending in the sudden 45% downturn of the great depression? Take a long hard look. Could you live through that and stick to it without panic selling?
A 20% bond allocation already goes a long way smoothing such bumps.
Statistics: Posted by daviddem — Thu Mar 28, 2024 12:16 pm — Replies 15 — Views 785
