📖John Bogle
Bond Allocation Rule
Bond allocation should roughly match your age percentage.
A rough rule: hold your age in bonds. A 30-year-old might hold 30% bonds, a 60-year-old 60% bonds.
🏠 Everyday Analogy
📖 Core Interpretation
As you age, reduce stock exposure to protect against volatility near retirement.
💎 Key Insight：Bogle offered a simple heuristic: hold your age in bonds as a percentage of your portfolio. A 30-year-old holds 30% bonds and 70% stocks; a 60-year-old holds 60% bonds and 40% stocks. The logic is that younger investors have time to recover from market crashes and should maximize growth, while older investors approaching retirement need stability and income. This rule automatically increases portfolio defensiveness as you age. It's not perfect for everyone, but it provides a reasonable starting point that prevents both excessive risk in retirement and excessive conservatism in youth.
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❓ Why It Matters
Younger investors have time to recover from crashes. Older investors don't.
🎯 How to Practice
Increase bond allocation gradually over time. Consider target-date funds.
🎙️ Master's Voice
The idea that a bell rings to signal when investors should get into or out of the market is simply not credible.
Bogle rejected market timing. No one could consistently call tops and bottoms. Stay invested.
⚔️ Practical Guide
✅ Decision Checklist
- Am I trying to time the market?
- Am I listening for bells?
- Should I just stay invested?
📋 Action Steps
- Abandon market timing
- Stay invested
- Ignore timing signals
🚨 Warning Signs
- Timing attempts
- Waiting for signals
- Missing market time
⚠️ Common Pitfalls
Too conservative for longer retirements
Ignoring individual circumstances
📚 Case Studies
1
Vanguard Boglehead vs. Aggressive 30-Something in the GFC (2008)
During the 2008 financial crisis, many U.S. index investors on Vanguard’s Bogleheads forum compared outcomes. A 30-something investor following Bogle’s ‘age in bonds’ rule had ~30% in bond index funds and 70% in stocks when the S&P 500 fell over 50% from October 2007 to March 2009.
✨ Outcome：Their portfolio dropped roughly 30–35%, versus 45–55% for peers near 100% stocks. The smaller loss helped them avoid panic selling and stay invested, illustrating how age-based bond allocation can reduce behavioral mistakes in severe bear markets.
2
Near-Retiree with Age-in-Bonds vs. Tech-Heavy Peers (2000)
Around the 2000 dot-com bust, many investors nearing retirement were heavily concentrated in tech stocks. A typical Bogle-style 60-year-old with about 60% in high‑quality bond funds and 40% in broad stock index funds saw only modest declines when the NASDAQ collapsed nearly 80% from 2000–2002.
✨ Outcome：While tech‑heavy retirees lost 40–70% and delayed retirement, the age‑in‑bonds investor’s portfolio decline was far smaller and more tolerable, preserving retirement plans. The case, documented in retrospective interviews and advisor reports, highlighted the protective role of higher bond allocations in later years.
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