70/30 Stock Bond Portfolio… Good Idea or Just Giving Up Gains?

Right now, I’m all in on stocks (besides my emergency fund and some extra cash), but I always see people talking about bonds as a way to balance risk.

For younger investors, is there actually a good reason to hold bonds when you’ve got a 20-30 year time horizon? I get that past returns don’t guarantee anything, but for those who do hold bonds—what’s your reasoning? Do you just see it as diversification, and are you okay with lower returns?

It really depends on your risk tolerance, but most people here usually say young investors should be 90-100% in stocks, maybe 10% bonds max.

Peyton said:
It really depends on your risk tolerance, but most people here usually say young investors should be 90-100% in stocks, maybe 10% bonds max.

True, but let’s be real—this forum has everything from legit professionals to 16-year-olds pretending they trade for a living.

70/30 or 60/40 isn’t random. It’s designed to balance risk and returns. If you’re young and have the stomach for it, 90/10 or 100% stocks is fine, but just be ready for serious pain when the market tanks.

@Logan
Yeah, a lot of investors have only known a world where stocks keep winning. There’s definitely some bias there.

@Logan
On the bright side, if you’ve been in VTI the past two years, you’re up nearly 50%. A 30% drop wouldn’t even wipe out those gains.

@Logan
If you’re in your 30s with a 25+ year horizon, I don’t see any reason to hold bonds.

@Logan
What does ‘LARPing’ mean?

Brier said:
@Logan
What does ‘LARPing’ mean?

It means pretending. It stands for ‘Live Action Role Play,’ like those guys dressed as knights fighting with foam swords in the park.

I’d go for long-term bonds instead of those weak BND and BNDX funds that show up in target-date portfolios.

Long bonds are way more sensitive to rate changes, which can be useful. In a recession, stocks drop but long bonds tend to shoot up, especially if the Fed starts pumping money again. Rebalancing between stocks and long bonds has historically performed better than mixing stocks with total bond funds.

I don’t see a reason to hold bonds unless you’re getting close to retirement.

If you’re young, just go for growth.

70/30 is the way to go for some people. Stocks let you eat well, bonds let you sleep well. Diversification is a simple concept, but ignoring it can be risky.

Maybe 10% bonds to smooth out volatility, but that’s it. Bond returns are too weak, and I’d rather take the ups and downs to maximize stock gains.

Bonds are looking better now than they did for most of the last five years, but I still wouldn’t go heavy on them.

It all comes down to risk tolerance. If you lived through 2000 and 2008, you probably already know how much risk you can handle.

Nico said:
It all comes down to risk tolerance. If you lived through 2000 and 2008, you probably already know how much risk you can handle.

Yep, and those crashes also showed that bonds don’t always act like you expect them to. Sometimes they hurt more than help.

Pick whatever allocation helps you sleep at night and stops you from panic selling when the market crashes.

The idea behind bonds is simple: stocks do well when rates are low, bonds do well when rates are high. But the last cycle kind of broke that pattern, so who knows?

Diversification reduces risk, and bonds are just another way to spread things out. But if you want liquidity for buying dips, even a savings account can do the job.

I’m in my 30s. Never owned bonds, except for whatever’s in target-date funds, which were useless. No regrets.

Depends on age. I’m mid-50s and do 65/35. Even that feels a bit risky sometimes.

Let’s not overthink this—there’s no real reason to hold 30% bonds for a 20-30 year time frame. 10% is fine, 0% is totally okay too if you can handle the volatility.