Rethinking Asset Allocation (2015, percentage, companies, money)

[ranchoparque]

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?

[Nor'Eastah]

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!

[ranchoparque]

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.