Personal Investments • Re: Still Trying to Understand Bonds

What about those like myself who don't like cash as a long term investment?

Is that seriously a question? As another poster above put it rather bluntly, "Do what you want to do in your own investing", and have the rest of us do our own investing.

Yeah, it's a serious question. Thought you were posting wanting to help others looking into bond alternatives.

In that case ...
Yes, I am posting to present bond alternatives. And I already posted (may be not in this thread) about them. Basically, what I found through back-testing is that, an allocation of X% to bonds is the same as X-10% to cash, and 10% to stocks.
Meaning:
70% stocks + 30% bonds == 80% stocks + 20% cash
60% stocks + 40% bonds == 70% stocks + 30% cash
50% stocks + 50% bonds == 60% stocks + 40% cash

In portfolio visualizer, the "cash" is taken to be the return rate from 3-month Treasury bills.

At higher concentrations of bonds than 50%, that equivalency breaks down a bit, but then again:
1) unless you are already in retirement, you probably wouldn't hold more than 50% in bonds
2) if you are already more than 50% in bonds, 2022 should really be a wake up call for you
3) even in 2024, "total bond" lost 2.91% year to date, at an annualized rate of -9.7%, just about double digits loss. At the same time when cash is returning 5.x%. A difference of 15% ...

If you are equanimous about those losses in your bond funds, then this thread is definitely not for you.

Some portfolio visualizer links I posted in the past threads:
https://www.portfoliovisualizer.com/bac ... 4QaN0r6iq4
https://www.portfoliovisualizer.com/bac ... hkQdwZekAS
https://www.portfoliovisualizer.com/bac ... jHtMUQYtcG

Edited to add: BLUF: Take your risk in equities only.

Statistics: Posted by ThankYouJack — Thu Apr 25, 2024 9:51 am