Not crazy at all. Unlike bonds, stocks are not guaranteed to return anything.If that horizon is indeed 30 to 50 years, one must be crazy to lock oneself in an investment guaranteed to yield low returns, stocks are much better bet. Unless there is a "Back to the Future" type scenario where a Western Union envelope must be delivered safely at the end of those 30 to 50 years.
Bond duration should be set relative to when you expect to withdraw the money. If that is 30-50 years in the future, why worry about short term fluctuations and NAV drops that will be compensated in a much shorter time period?
Unlike an individual bond, with a bond fund you aren’t locked into anything, you can easily withdraw any amount at any time.
And some of us don’t like the full volatility of stocks, so add some bonds, even early on, to tamp the volatility down. Plus it gets us in the habit of having a well diversified portfolio of stocks and bonds, where we can gradually adds more bonds over time.
Statistics: Posted by rkhusky — Fri Dec 06, 2024 7:15 am — Replies 77 — Views 3777