Index Portfolio

Sam_J12

TheTracker wrote: »

The key thing about going 100% equity at your age isn't the long term sense of it, because that is incontrovertible, its your personal ability to take a stomach churning drop of maybe 50% at some point. That's not much easier at 25 than it is at 45 even though its of much less long term consequence.

That is a really good point. The key to long term investing is to stick it out, and if bonds make that easier than perhaps it was worth holding some for that reason alone, despite the lower long term expectation. It is a personality thing I suppose. I read somewhere that an average investor only gets around a third (I think that was the figure) of the market return because they invariably sell at the worst time straight after crashes.

But even with bonds as party of a portfolio we will all take significant hits in 2000/2008 type crashes. You have to be in it long term regardless of allocation...