Anonymous
11/17/2025 16:09
Subject: AI bubble – why not accelerate reallocation to bonds early?
I got laughed at by some idiot on here who is obsessed with Tesla stock when I brought up the looming crash a few months ago. I am moving to G fund soon. I think we have more gains in the short term. Why? Because we have no yet unleashed QE and additional rate cuts to try and tame the terrible impacts from job losses and tariffs. When the money printer goes brrrrr the stock market will inevitably rise for a bit. That’ll also help my gold ETFs in my taxable account. But yeah in TSP I am really close to just throwing it in G so as not to lock in losses that are coming soon.
Anonymous
11/17/2025 15:17
Subject: Re:AI bubble – why not accelerate reallocation to bonds early?
Anonymous wrote:OP, was your original asset allocation of 10% bonds well thought out? If it was, then you probably wouldn't be considering changing your allocation. Have you looked at the Trinity stud? It will tell you your odds of success and terminal asset value for different asset allocations over different lengths of time.
Seems like OP was at a reasonable 90/10 allocation for someone 20+ years from retirement, but hasn't shifted the portfolio allocation as they have gotten a lot closer to retirement. Someone 10 years from retirement would reasonably want to shift their allocation more towards bonds. I am around 15 years from retirement and my retirement money is in a target retirement fund which is right now 75/25, it glides down to around 60/40 five years from retirement, and then 50/50 at the target retirement year.
OP seems like around 5-8 years from retirement? Obviously different approaches, but independent of AI crash, etc, I'd put it in a Target Retirement 2030 or 2035 account personally. That way this glide would be smoothly managed without input.
Anonymous
11/17/2025 15:17
Subject: AI bubble – why not accelerate reallocation to bonds early?
Umm, you're at 90/10 with three years till retirement?
AI bubble or not, rebalance immediately.
AI bubble or not, rebalance immediately.
Anonymous
11/17/2025 14:58
Subject: AI bubble – why not accelerate reallocation to bonds early?
Anonymous wrote:New question--is the G Fund guaranteed not to lose money? Apart from inflation eroding its value?
Yes, that's correct.
The G fund doesn't always beat inflation, but I think that it mostly due to it lagging and then catching up?
Anonymous
11/17/2025 14:45
Subject: AI bubble – why not accelerate reallocation to bonds early?
New question--is the G Fund guaranteed not to lose money? Apart from inflation eroding its value?
Anonymous
11/17/2025 14:43
Subject: AI bubble – why not accelerate reallocation to bonds early?
I avoid funds and just ladder Treasuries that I am willing to hold. If your money is in TSP a lifecycle fund is next best.
We locked into stable value TIAA funds in 2019 and tipped the knob off. We had enough money, didn't want to gamble.
We locked into stable value TIAA funds in 2019 and tipped the knob off. We had enough money, didn't want to gamble.
Anonymous
11/17/2025 14:39
Subject: Re:AI bubble – why not accelerate reallocation to bonds early?
Your asset allocation should reflect, among other things, your risk tolerance. If you're becoming less risk tolerant, exchanging assets with more long-term growth potential for assets likely to be less volatile is not unreasonable. Just be cognizant that you're reacting to what may be short-term market fluctuations, and that you are, effectively, engaging in market timing. If you're invested for the long-haul, your behavior should probably reflect that rather than short-term nervousness around "a growing consensus".
There is also an argument to be made that when "everyone" knows something, it's probably not a reliable basis for acting. The masses are usually ignorant, as history has shown.
There is also an argument to be made that when "everyone" knows something, it's probably not a reliable basis for acting. The masses are usually ignorant, as history has shown.
Anonymous
11/17/2025 14:08
Subject: AI bubble – why not accelerate reallocation to bonds early?
Anonymous wrote:When you say bonds will suffer as well are you referring to treasuries as well? NP
Yes. As was the case when the credit markets dried up in 2008.
Anonymous
11/17/2025 13:58
Subject: Re:AI bubble – why not accelerate reallocation to bonds early?
OP, was your original asset allocation of 10% bonds well thought out? If it was, then you probably wouldn't be considering changing your allocation. Have you looked at the Trinity stud? It will tell you your odds of success and terminal asset value for different asset allocations over different lengths of time.
Anonymous
11/17/2025 13:51
Subject: AI bubble – why not accelerate reallocation to bonds early?
Anonymous wrote:When you say bonds will suffer as well are you referring to treasuries as well? NP
Yes that's a big part of the bond market. They make up 50% of Vanguard's Total Bond Market Index Fund, for instance, with another 20% as government-backed mortgage backed bonds, so really 70% of that index is securities backed by the full faith and credit of the US federal government.
https://investor.vanguard.com/investment-products/mutual-funds/profile/vtbix#portfolio-composition
Anonymous
11/17/2025 13:39
Subject: AI bubble – why not accelerate reallocation to bonds early?
When you say bonds will suffer as well are you referring to treasuries as well? NP
Anonymous
11/17/2025 13:33
Subject: AI bubble – why not accelerate reallocation to bonds early?
You could switch to the retirement income TSP fund now, which is heavily weighted to the G fund but with some stocks and bonds. I agree that bonds will take a hit when the bubble bursts.
Anonymous
11/17/2025 13:31
Subject: AI bubble – why not accelerate reallocation to bonds early?
You may know this, but the bond markets are surging with AI and data center bond issues. Up 110% over 2024. Moreover, the CMBS market is exploding and, unsurprisingly, the CDS market is too. Just one example:
"Oracle's CDS Spike: Oracle's five-year CDS spread jumped to a two-year high, nearing 80 basis points (up from around 55 bps earlier in the year), signaling market jitters about the company's massive, debt-driven AI infrastructure plan."
If you are concerned with an AI equity crash, be concerned about the cedit markets as well. More concerned, actually, since failures there will have farther reaching ramifications.
"Oracle's CDS Spike: Oracle's five-year CDS spread jumped to a two-year high, nearing 80 basis points (up from around 55 bps earlier in the year), signaling market jitters about the company's massive, debt-driven AI infrastructure plan."
If you are concerned with an AI equity crash, be concerned about the cedit markets as well. More concerned, actually, since failures there will have farther reaching ramifications.
Anonymous
11/17/2025 12:56
Subject: AI bubble – why not accelerate reallocation to bonds early?
Anonymous wrote:A growing consensus appears to be that the stock market is in an AI bubble and will eventually have a correction, but who knows when or how much.
Partly thanks to this bubble, we recently surpassed our goal for retirement savings ($3M) well before we expected to.
I’ve been a set it and forget investor since my 20s, but am now a GS15 fed with 3 years left before retirement eligibility. I do enjoy my work and would be OK working past that date, such as an additional 5 years to get to age 62. My spouse is in the private sector, makes close to what I do and has no interest in retiring anytime soon.
I keep wondering if we should declare victory and accelerate the reallocation of my current TSP portfolio from 90% stocks/10% bonds to 60%/40%. I understand we could be forgoing sizable future upside gains, but am tempted by the chance to lock in our current gains and minimize our future downside.
Am I crazy to be entertaining this?
No that sounds like an eminently reasonable approach with that amount of retirement already funded.
Anonymous
11/17/2025 12:47
Subject: AI bubble – why not accelerate reallocation to bonds early?
A growing consensus appears to be that the stock market is in an AI bubble and will eventually have a correction, but who knows when or how much.
Partly thanks to this bubble, we recently surpassed our goal for retirement savings ($3M) well before we expected to.
I’ve been a set it and forget investor since my 20s, but am now a GS15 fed with 3 years left before retirement eligibility. I do enjoy my work and would be OK working past that date, such as an additional 5 years to get to age 62. My spouse is in the private sector, makes close to what I do and has no interest in retiring anytime soon.
I keep wondering if we should declare victory and accelerate the reallocation of my current TSP portfolio from 90% stocks/10% bonds to 60%/40%. I understand we could be forgoing sizable future upside gains, but am tempted by the chance to lock in our current gains and minimize our future downside.
Am I crazy to be entertaining this?
Partly thanks to this bubble, we recently surpassed our goal for retirement savings ($3M) well before we expected to.
I’ve been a set it and forget investor since my 20s, but am now a GS15 fed with 3 years left before retirement eligibility. I do enjoy my work and would be OK working past that date, such as an additional 5 years to get to age 62. My spouse is in the private sector, makes close to what I do and has no interest in retiring anytime soon.
I keep wondering if we should declare victory and accelerate the reallocation of my current TSP portfolio from 90% stocks/10% bonds to 60%/40%. I understand we could be forgoing sizable future upside gains, but am tempted by the chance to lock in our current gains and minimize our future downside.
Am I crazy to be entertaining this?