...I don't buy bonds
A lot of people would argue that even for a young person a portfolio with a small bond allocation is actually less risky with higher returns then a 100% allocation to stocks.
A lot of people would argue that even for a young person a portfolio with a small bond allocation is actually less risky with higher returns then a 100% allocation to stocks.
2. it depends what you mean by "risk". arguments claiming bond allocation in your portfolio are less "risky" describe risk as "volatility of returns", which in finance are measured over shorter intervals than 40 years.
patrick is specifically accepting short term volatility in return for the higher EV of returns.
the marketplace prices debt instruments (especially US treasury issued) over the long term with cheaper expectations for returns specifically because it has lower variance of returns.
In practice people tend to increase their relative holdings in stocks, this is highly risky since it's much harder to make up losses and the end of your working life.
For me: Where I live a special accounts for retirment do not exist so I don't have an opinion on those.
The excess cash I'm now started earn will be invested in simple ETF's. They provide good diversification for a small price.
[1] So good for you!