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Unless you're within 10 years or so of retiring, 100/0 is fine. Until 2000 or so, bonds used to be better investments, returning on average about 1/2 of what stocks did, with much less risk. They weren't correlated, which was also good - ISTR that there were two years in the 90's when bonds returned over 10%. Results like these were what prompted the traditional stock/bond split, although the idea has since been retconned to suggest that bonds are good because they will keep their value...forgetting that they also used to produce an okay return. >I could understand if I was 60 or 70, but even then CDs or dividend ETFs feels better for income. Bond ladders can make a lot of sense for those purposes, particularly when you want to match income to certain known expenses and aren't too worried about inflation. Bond *funds* don't work the same way that stock funds do, and so their results are often unpredictable.
I reiterate that the small banks are completely underowned. As short term rates are being forced down, bank earnings are literally booming. An example, ISTR a bank benefitting from the LNG and US shale natural gas boom, despite reaching ATH, is cheaper than it was a month ago at 9x fwd EPS. Guided EPS is 50% higher than pre-covid yet it's only 17% higher. There is still 20-30% easy upside from here. INDB trading at valuations near covid lows despite EPS literally at ATH. WAL still trading at discount valuations despite recent loan losses equivalent to 0.1% of loans. If not for the AI trade, these would have been the best investments of the last 2 years. There is a good reason for this: Post-covid inflation from Russian War and reopening, was like a mini-1970s great inflation event. Inflation boomed from oil, then fell back down quickly. The same thing happened with banks, inflation became so high that Fed raised rates, pushing banks to extremely undervalued prices. Now that inflation is back down and interest rates fall, bank stocks are booming as it happened post-1980s. At some point they will become fairly valued, but it's still 20%+ from here because we haven't reached the interest rate bottom, nor are they even trading at normal valuations.
Was there any sector as undervalued as regional banks? AI has the growth, surpassing expectations. Small banks have the value, surpassing expectations. One of my best performing stocks is ISTR, I bought at $11, now $27. Yet, the growth has not finished in any way. Located in LA, it has the tremendous US LNG growth without the risk, still valued lower than pre-pandemic even as earnings hit ATH. What does the future look like for these small banks? The FED is literally forcing down expenses, while everyone starts complaining about lower interest on savings, regional bank EPS are going parabolic. Expect even more complaining about lower savings interest, you can avoid that just by buying smaller banks.
How far down are we from the market high already? ISTR that we're down something like 10% already.
Even that's overblown because it's only talking a about "funds" and he's talking about "Wall Street". ISTR that 30% of all stocks are in funds (ETFs and mutuals), with the there being a pretty even 15%-15% split between indexed and non-indexed funds. So the vast majority of stocks aren't in any fund at all but are held individually.
ISTR that Bottle-caps make a great currency