U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Economics
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
 
Old 10-10-2008, 01:32 PM
 
53 posts, read 138,151 times
Reputation: 28

Advertisements

I have been rethinking all the conventional "wisdom" about asset allocation. You see it in Target retirement funds, articles on asset allocation in personal finance books and magazines, asset allocation calculators on the websites of mutual fund companies, etc.
Six months ago I thought that having an allocation of 40 percent stock funds and 60% bonds/money market was a "conservative" allocation for someone who is 53 and about 8 to 10 years from retirement. This was a lot more conservative than most target retirement funds. For example, Vanguard Retirement 2015 is about 63% percent in stocks. It is down about 26% year to date.
The 2010 fund (and this is for someone planning to retire in about 2 years) is down about 23% with about 54 percent in stocks.
In the book "Financial planning for dummies" an asset allocation of 100 minus your age (in stocks) is considered a "play it safe" allocation. This as an old rule of thumb.
So where does this leave us?
Currently my stock allocation has drifted down to about 33%. I am not planning to sell. But I feel that I want to let my stock portion drift down to a smaller percentage just because I don't think I could stomach big losses as I get closer to retirement.
Anyone else rethinkng the whole asset allocation thing, especially as you get closer to retirement age?
Reply With Quote Quick reply to this message

 
Old 10-10-2008, 05:36 PM
 
Location: Backwoods of Maine
7,110 posts, read 8,147,355 times
Reputation: 18741
There are 7 asset classes. You just named 2. Is this your idea of being "well-diversified"? Is asset allocation limited to what percentage of stocks vs bonds?

If you are 53, you need to do some more homework!
Reply With Quote Quick reply to this message
 
Old 10-10-2008, 05:47 PM
 
53 posts, read 138,151 times
Reputation: 28
Well, the original post refers to mutual fund investments in small, medium, and large foreign and domestic stocks as well as in the total bond market. It does not include equity in my home.
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Economics
Follow City-Data.com founder on our Forum or

All times are GMT -6.

2005-2019, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top