What percentage of your personal investment portfolio is in bonds?

Zero percent for me.

60% - IVV

30% - EFA

10% - EEM



10% in my retirement account which will gradually move to 0% at the next recession once stocks get cheaper.


100% stocks and cash.

Where are you guys parking cash? Actual cash, or money market, etc?

I really don’t get the bond hate. I keep ~10-15% of my portfolio in bonds. See below from an CFA MBA financier I respect.

Endowment funds, with their infinite time horizons, help us confirm that adding some bonds to a portfolio is useful. Colleges generally spend only a small amount of endowment funds annually and allow the rest to grow for future years. Harvard and Yale, by far the largest endowments, both include bonds in their portfolios (as do most endowments). The bright people who work there have determined that it makes sense to do so for diversification and risk reduction, regardless of the time horizon.

Another group of investors has an equally long time horizon — sovereign wealth funds. It’s a foreign concept to our U.S. government, but some countries have accumulated such surplus wealth that they have large sums of money to invest on behalf of their citizens. Abu Dhabi and Norway have the two largest sovereign wealth funds. Believe it or not, they may hold as much as 40% of their portfolios in bonds! That tells me that they really value portfolio risk management.

Bond investors eat like chickens and shit like elephants.

I’m with you to a certain point.

However, here is why I won’t invest in bonds :

  • nominal too big. So I would have to go through a fund if I want to diversify. I like to pick securities.

  • in the eurozone, quality issues are yielding less than 2,5%. Why wouldn’t I buy blue chips with a dividend of around 2,5 % instead ?

  • rates are so low now that when they rise bonds will lose value

  • if inflation kicks in, stocks are a better hedge

  • at current interest rates levels, bonds have very limited upside.

  • with bonds, you need not only to study the company, but also the bond documentation. I have been working on the credit side for years so that’s no problem, but still double the work IMO.

It’s all the classical excuses for not investing in bonds, really. It does make sense to diversify, but nothing can outweigh these counter-arguments for me.

Very different from people here, I keep a fairly large amount in “bonds.” But they aren’t bonds in the traditional sense, but consumer loans. They give me a decent return and reduces the violatility of my total returns, as the default rates on consumer credit isn’t highly correlated with the S&P. The monthly amortization and 36 month terms produces a nice cash flow, in case I have an unexpected hiccup or rates/inflation ticks up.

How do you access the consumer loans and what is the average loan/interest rate? Just curious.

I think it’s some crowd funding securitization vehicle or something similar. I think there was a thread about this where he mentioned this a few months ago.

0% in bonds. cuz rates are too cheap and near historic lows with the 10 year near 2%. im young at 26. lastly i dont mind the downside. nice idea on consumer loans, always a good idea to diversify income, never really got into it though.


Lending Club I assume?

I have a ton of bond exposure. Between my social security, my wife’s social security, and my wife’s teacher retirement, that’s roughly a half million dollars in bond exposure.

Outside of that, I have zero bonds. (I actually have a small position in the Dodge & Cox Bond fund, but that’s only to hold my place if they ever decide to close the fund again.)

People have been saying this since early 2009. What will make bond yields rise: robust growth in developed market nominal GDP. Eurozone nominal GDP is rising like 1.6%, Japan recently is like 2% (before that was flat). Absent a substantial increase in Eurozone/Japan NGDP up to likr 4% each, then their yields are going to stay low.

It is not so much that bonds are going to lose value in the near term, it is that the upside is mathematically capped once interest rates are compressed enough. That makes equities a better relative bet, and that has been true since 2009.

Obviously you can get some return on bonds if you go long duration, but given outlooks and current yields that just seems far more risky than buy the S&P at 15x.

0 in my portfolio and 0 in my pension

Might reconsider when I get older

I use Lending Club. If you are an accredited investor (I’d assume some on this forum are), then you also have access to other non-consumer stuff.

Average interest rate of my portfolio is 14%. Average credit exposure for me is $25 per borrower.