Balanced portfolio
I am 77 years old with a portfolio of 60% bonds, and 40% stocks. Should I raise the percentage of stocks?
Terry Says
You should be prepared to take losses in BOTH the stock and bond portions of your portfolio. Stocks have a great LONG-term track record, but typically perform poorly when the Fed is trying to control inflation by raising interest rates. And bonds prices FALL when rates rise! (who wants your old low-yield bond, when they can buy new higher rate bonds — so if you sell, you have a loss and if you hold, you’re stuck with low rates).
Do you have some “chicken money” — cash on the sidelines? Are your stock funds the more conservative dividend-paying stocks?
60/40 is a recipe for losses these days. Please read my latest column post on inflation on my website.
