Presumably what Klang is counting on is illustrated by the example of a class of 2000 retiree. There are some similarities to today's conditions (i.e. high stock valuations based on CAPE, bonds offering decent real yields). A class of 2000 retiree is experiencing a better outcome with a balanced portfolio versus 100% stocks or 100% bonds.?OP,
Your individual portfolio return will not be the same as the stock market return. So, this is only of interest from theoretical point of view.
I am counting on my 60/40 portfolio with rebalancing to enjoy greater return from higher volatility.
KlangFool
But a 60/40 portfolio, most of the time, has less volatility than 100% stocks....
https://www.portfoliovisualizer.com/bac ... 3vyGVL7aVo
This backtest shows this clearly. 60/40 beat 100% stocks and 100% bonds. Enough wealth was preserved by bonds to allow the portfolio more room to recover, while having a healthy allocation to equities eventually provided the growth necessary for portfolio survival.
Klang has a valid point.
Statistics: Posted by loukycpa — Thu Apr 25, 2024 7:11 am — Replies 26 — Views 2546
