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Reply to "Why do target date retirement funds have bonds?"
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[quote=Anonymous][quote=Anonymous]I would not worry about 1%. Personally, I have always been all equities and it was heart wrenching to concede to doing 15% governments once I hit 65. [/quote] And I'm different--I'm in my 50s and have 65 percent stocks, 5 percent alternatives, 15 percent bonds, and 15 percent cash/cash equivalents (I count short-term individual T-bills as cash equivalents, some would consider those bonds). I have all the money than I need and care more about downside risk than I do about maximizing gains. I wonder if I should switch more out of equities. This is why target date funds have bonds--they are trying to please the average person when people have a range of situations and risk tolerances. Everybody thinks the stock market is "safer in the long run" -- but it's actually not, it has even more volatility the longer you look out--it just has tended to go up more than anything else on average. [/quote]
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