quote:
knowing that over 30 years the risk will decrease significantly and $10,000 will become $178,935 with the S&P 500 instead of only $95,895 with the 30 year treasury.

Unfortunately you don't know that.
Bond ROI stinks right now.
Treasury ROI stinks.
S&P associated risk for retirees stinks.
Real estate bridges the gap somewhat.

Young folks should not remotely consider bonds at these levels. Nor should 40-somethings IMO. However, past that, the stock:bond ratio becomes very dicey. Current ROI drives the equation HEAVILY to stocks/realestate

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Posted by wutangfinancial

Treasure Valley

Member since Sep 2015

11185 posts

Posted on 2/10/20 at 5:36 pm to NC_Tigah

quote:
Young folks should not remotely consider bonds at these levels. Nor should 40-somethings IMO. However, past that, the stock:bond ratio becomes very dicey. Current ROI drives the equation HEAVILY to stocks/realestate

Your sentiment is wrong here. You have to think about who is going to be buying stocks in 20 years. It's extremely irresponsible to assume we see returns like we did this past decade. Most people in here are buying index funds. That is not going to end well more than likely.

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Posted by buckeye_vol

Member since Jul 2014

35240 posts

Posted on 2/10/20 at 5:54 pm to NC_Tigah

quote:
Unfortunately you don't know that.

Well considering my figures are based on backtested historically data and is in response to a post about historical returns, I know these things for a fact since I’m not arguing that these are what will happen over the next 30 years.

quote:
S&P associated risk for retirees stinks.

S&P risk is at historically low levels now at least. And since future risk is unknowable, I don’t see any reason to believe that it will be any more than historically.

quote:
Current ROI drives the equation HEAVILY to stocks/realestate

Well and I think real-estate (like REIT’s) represents an asset that has replaced bonds as stocks and funds with high dividend yields have taken their place.

Personally I think we’re just seeing a change to the investment paradigm, and I won’t think it’s necessarily good or bad, just different. With the shift away from more expensive actively managed funds, a shift away from defined benefit retirement plans to defined contribution plans, and globalization (e.g., easier access to foreign markets) and technology eliminating many investment barriers (e.g., eliminating fees to trade, easier and quicker access to the market, research tools to make decisions, and fractional shares to be able to buy anything with essentially any amount available) I think these changes are just a natural function of societal changes.

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Posted by JohnnyKilroy