<p><a href=“http://www.investinganswers.com/financial-dictionary/investing/efficient-frontier-1010”>http://www.investinganswers.com/financial-dictionary/investing/efficient-frontier-1010</a></p>
<p>Yes. I studied this in the 70’s.</p>
<p>@dstark, aren’t risk-adjusted returns what we’re interested in? </p>
<p>You say you studied this in the 70s. Did it hold water then? Has that changed since then? As I said, I don’t particularly understand it, but I trust Wm Bernstein. </p>
<p>Re rebalancing, there is a poster on Bogleheads whose position is that you should rebalance after RBDs (really Bad Days).</p>
<p>Yes… Risk adjusted returns are what works for me. </p>
<p>I own a lot of bonds. My risk tolerance has declined. </p>
<p>It’s been awhile. I only got a B+ in that class. :)</p>
<p>I am probably being picky but 80/20 equity/bond ratio returns do not = 100 percent equity returns. Sounds like you meant risk adjusted returns.</p>
<p>I love the question did this hold water then? I cant remember. I was in my 20’s and very aggressive. :)</p>
<p>Does it hold water now? Edit: I dont know…</p>
<p><a href=“Accelerated Depreciation: What Is It, How to Calculate It”>http://www.investopedia.com/walkthrough/corporate-finance/4/capital-markets/history-stocks-bonds.aspx</a></p>
<p>I still own bonds though. I cant predict the future. I can understand why others dont want the bonds. </p>
<p>I dont know who Wm Bernstein is but if you like him and you fit with his ideas that is great. Look…from what I read… You have no worries… :)</p>
<p>Is today count as a RBD?</p>
<p>Today is nothing. Low volume I’ve heard.</p>
<p>I was wondering what was going on today. Small correction, or the start of the big plunge?</p>
<p>Who knows but I think it’s healthy.</p>
<p>It didn’t make anything look especially cheap, that’s for sure.</p>
<p>Isn’t the market near the bottom of the year right now? Seems like things should be looking cheap. Though I agree, I don’t see anything cheap enough to want to buy.</p>
<p>Not close to a RBD, but string some of these kinds of days together and …</p>
<p>I found this thread interesting <a href=“Why bonds?? - Bogleheads.org”>Why bonds?? - Bogleheads.org; on the subject of including bonds in a portfolio. </p>
<p>When I once recommended a minimum of 20% bonds and max of 80% bonds, I had forgotten that no less than Ben Graham said it but using 25% and 75% as his bands. </p>
<p>Would Social Security not be considered the equivalent of a bond? It is, and will be, a part of our retirement income; isn’t it effectively part of our portfolio?</p>
<p>How does cash fit it? </p>
<p>Thanks for the link, IxnayBob. I find the Boglehead site a little difficult to navigate…</p>
<p>
</p>
<p>Bernstein in his book suggests to include the present value of SS benefits in the portfolio and balance it accordingly. </p>
<p>I group cash with bonds. What do others do?</p>
<p>@arabrab, can you rebalance out of SS and into something else? No, which is why it does not substitute for a bond, and neither do annuities or pensions. Notwithstanding that, a healthy annuity stream of income increases your chance to withstand a rough patch, and might lower your need for bonds.</p>
<p>We are lucky enough to have SS and pensions that could support us, in a “just good enough” way. Our portfolio will provide the spice. Bernstein says, “if you’ve won the game, why continue to play?”</p>
<p>Denver’s selling small bonds today - $500 each. Must be held until maturity and can’t be sold on the secondary market. <a href=“Denver to sell $500 “mini-bonds” to public to raise $12M for projects – The Denver Post”>Denver to sell $500 “mini-bonds” to public to raise $12M for projects – The Denver Post;
<p>Under your definition, are these bonds? They can’t be sold, you can’t rebalance out of them. But they feel pretty like a bond to me. (And they’re way more like a bond than a bond fund is from a risk perspective, imo.)</p>
<p>@arabrab, to me they’re more like a CD, but heck, you can get out of those before maturity with a penalty. </p>
<p>To each their own. If you like to think of SS as a bond and I don’t, there’s no point in debating how many bonds can dance on the head of a pin. </p>
<p>Everybody has their own situation. </p>
<p>For example, the govt says inflation is running at 2 percent. My personal inflation is running higher. I would say 3 percent. </p>
<p>I look at bonds. Fed fund rates. The ten year - two year spread. Inflation. </p>
<p>Bonds have interest rate risk and inflation risk. </p>
<p>IxnayBob, what is the yield, the after tax yield and duration of the international bond fund?</p>
<p>Hey guys… I think the market could get really nasty. There were way too many distribution days recently (that is when the market drops on huge volume and is higher than the day before). The market has been held up because of QE, low interest rates, etc. It is precarious - very dangerous market for sure. I’m counting at least eight distribution days since 7/3 and five since 7/16. That is HUGE. Usually when there are five in two weeks that is a game changer. What this means is simply when there are this many distribution days in a short period, that means the market is changing its trend. The opposite holds true when we switch to an uptrend. Also, all three indexes just sliced through the 50D which is not good. I’m completely in cash and short. How low it will go is anybody’s guess but this is definitely the early stages.</p>