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Author: hackshark Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 35271  
Subject: Re: Bond funds? Date: 2/3/2002 8:24 PM
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You don't need bonds right now at your age. So I would keep buying a diversified portfolio of stocks (your selection looks very diverse) for now

This makes me cringe with fear. This bear market does not appear to have dampened the enthusiasm for stocks which has been whipped up by an 18 year bull market.

Rephrased: if you think there is any possibility that we may face 5-10 years of sideways equity markets, then bonds deserves serious consideration for ANY portfolio, regardless of age. If you buy stocks now, you are buying at historically high valuations and essentially predicting/betting that they will maintain such lofty valuations.

The past century is littered with examples of 20 year periods in which equity markets in various regions of the world had very poor returns. Anyone not having bonds during those periods got burned, although stocks paid dividends back then, which providied some pain relief.

-hack

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