The Yin Yang Investor Mindset post talks about looking for opposite investment opportunities whenever one asset class is roaring. I used the sell-off in bonds as an example of finally beginning to build a meaningful muni bond portfolio to earn double taxation free income.
Now I’d like to highlight more reasons why folks who have a large enough financial nut, are within five years of retirement, or are already in retirement should consider allocating more towards bonds. For the past 20 years, I’ve invested very little in bonds as I sought growth assets. Now things have changed.
My current plan is to have an investment portfolio mix of 40% stocks and 60% bonds by the new year, just like someone who is over 60-years-old following a conventional asset allocation model. It doesn’t matter than I’m 39. What matters is my desire for income, principal protection, and diversification so I don’t ever have to go back to work for a living.