The Motley Fool Discussion Boards
Investing/Strategies / Retirement Investing
|Subject: Re: 401(k) allocation to eliminate s/t bond fund||Date: 3/4/2011 5:46 PM|
|Author: Watty56||Number: 68618 of 75523|
I would keep the bonds but still underweight long term bonds.
The reason for this is that when you rebalance regularly between several asset classes you end up automatically "selling high and buying low" so in theory having a percentage of you assets allocation in bonds like it is now will have the same return as a 100% stock portfolio but with less volatility (often called risk).
If you google "efficient frontier" or "modern portfolio theory" you will find lots about this, some of it very technical.
You might check out these books at your local library if you want to learn more;
|Copyright 1996-2014 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us|