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Vanguard is singing a new tune for investors in 2026.

It goes like this: Out with the standard portfolio mix of 60% equity and 40% fixed income. In with the opposite — a 40% equity share (20% US stocks and 20% international stocks) and 60% fixed income.

“This is a significant shift,” Roger Aliaga-Diaz, Vanguard’s global head of portfolio construction and chief economist for the Americas, told me. “It's almost like a tectonic shift.”

https://finance.yahoo.com/news/vanguard-flips-the-script-on-6040-investment-strategy-110026190.html

I'm pretty close to 100% stock all the time.

As far as my above post, the bellweather of investment grade bond securities is the Vanguard Total Bond Market ETF.

Its up about 7.25% year to date, and it dropped about 25% in price around 2021 to 2023 when inflation and interest rates started to increase.

Seems like it has somewhat recovered from that 25% drop

It has returned about 3.2% annually since its inception in April 2007 versus annual inflation averaging around 2.7% since April 2007

AD says

It has returned about 3.2% annually since its inception in April 2007 versus annual inflation averaging around 2.7% since April 2007

And that's my problem with bonds. Taking your numbers that's a real return of .5% vs. S&P real return of over 8% over last 20 years.

Further, at a yield of 3.2% and a typical cash flow requirement of $100k per year for a retired couple (feel free to disagree with that but to me that's just basic living ex-CA) that would mean you need a nest egg of $3,125,000 in order to live off the interest. I'm guessing that less than 4% of retirees have that much of a nest egg.

To illustrate - If I put that same nest egg money into something like SPYD or SCHD I'll get that $100,000 (or more) in dividends and still have a decent chance at another $200,000 in capital gains. I might also have a capital loss of $200,000 but as long as I don't realize those losses my dividends shouldn't change by that much. Over time the odds are with me.

In my investing lifetime (last 35 years) bonds have never made sense. They are considered "low risk" because they have low volatility. This is straight out of the MBA curriculum where they define risk as volatility when they are calculating their debt to equity ratios. That's not my definition of risk. Risk should be defined as not keeping ahead of the cost of living.

The previous post is correct.
Over time, bonds pay interest; periods of capital appreciation are followed by periods of depreciation. The long term result is the interest.

I'm retired and have a 90% stock allocation. In time, I'll convert some funds within IRAs, or similar to more dividend paying stocks, unless I'm lazy and keep doing almost nothing.

stfu says

In my investing lifetime (last 35 years) bonds have never made sense. They are considered "low risk" because they have low volatility. This is straight out of the MBA curriculum where they define risk as volatility when they are calculating their debt to equity ratios. That's not my definition of risk. Risk should be defined as not keeping ahead of the cost of living.

Yep.

The risk premium for an investment is the return an investor expects to receive above the return of a "risk-free" asset (like U.S. Treasury bonds) as compensation for taking on additional risk. It's a theoretical concept that constantly changes.

One analysis in March 2025 noted that VYM's risk premium was still near a 10-year peak relative to Treasury rates, suggesting an attractive potential return for the inherent risk at that time.

The fund's current SEC yield is approximately 2.42%. The difference between this yield and the current yield of a risk-free asset (e.g., a 10-year Treasury note) can provide a rough, current-market estimate of the yield premium, but this is not the total risk premium (which also includes capital appreciation expectations.)

Wall Street may have pulled off being able to create enough stocks to satisfy the sheer dollar amount being thrown into the sector. It's got Space-X coming public for about $1 trillion, Open AI for about $500 billion, Anthropic for about $350 billion, along with a spattering of other names for tens of billions each. About $3 trillion of brand new stock never been used before with that "new stock smell". There's not enough domestic "savers" for these new issues so Wall Street will have to con some foreign money maniacs to help out. Course, some folks will sell out of their used stock to get in on the latest and greatest....but oh well fire in the hole.

I think it is about risk, not necessarily voaltility. For example, you could own a stock in a solid company or mutual fund that plods along, maybe just holding its nominal value, maybe just keeping up with the rate of inflation. Low volatility.

It’s also about magical future revenue, especially for revenue-less stocks, like a lot of biotech startups.

UST’s are considered risk-free (so far) as the US gubberment hasn’t defaulted. The PTB always keep the casino paying out. E.g., Timmay.

Stock market was not hurt by the actions in Venezuela today.

Performance for 2024-2025:

Gold +64%

Silver + 145.9%

Gold/Silver Ratio -33.3%

Platinum +129%

Palladium + 78.7%

US dollar index - 9.4%

Dow in Gold -31.1%

S&P500 in gold -29.0%

Dow Industrials +13%

S&P500 +16.4%

Nasdaq Composite +20.4%

Nasdaq 100 +20.2%