No. of Recommendations: 6
As much as I don't want to do bonds given high probability of interest rate rise/risk, I'm considering ...Fidelity® Total Bond Fund.

Well, that statement doesn't make sense to me.

Here's the thing about rebalancing and asset allocation: You don't do it to maximize potential income r growth, you do it to minimize the potential loss. So, on the bond side, interest rate risk is something to be aware of, but if you have individual bonds, you'll get the interest payments and then get your money back when the term ends. If you have bond funds, you'll take a hit to the fund's NAV when interest rates rise, but over time the bonds will be replaced with ones earning a higher rate.

I had this concern five or six years ago: interest rates had nowhere to go but up, so I didn't want to diversify into bond funds but also didn't want to be stuck in a 92% stock allocation if the market crashed. So, I put money into the Merger Fund, MWCRX, FLOT and other bonds + bond-like things (that maybe have "levers" to adjust to buy only types of bonds that wouldn't be hit as much...floating rate, etc.). All that stuff has underperformed my "regular" bond funds. I believe I was 100% right--bonds will lose value as interest rates rise--but I was either too early, or tried to avoid bond losses in an ineffective/inefficient way. Point here: Learn from my mistake.

A quote I heard: If you don't have anything that's going down, you're not diversified. You don't have to believe that 100% to see the truth in the concept. That, plus understanding that:
1. The portfolio with the best longevity (historically) during the withdrawal stage is somewhere between 60/40 and 80/20.
2. An advisor that came to talk to my company's employees about saving/investing/retirement said that over the very long term, an portfolio with some asset allocation outperformed 100% of any one thing. I don't recall the mix, and would sure like to see the exact numbers in a spreadsheet, but with a couple hundred people there I didn't feel like calling him on this assertion.

I wish I could have back all the life insurance and car/home insurance premiums that I "wasted," but obviously we can't take the risk of massive loss by being on the wrong side of that low probability / high consequence event. The bonds are sort of insurance against a higher probability event of stocks losing >20% (say) at some time...it's gonna happen.
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