A plaque remaining from the Big Apple Night Club at West 135th Street and Seventh Avenue in Harlem.

Above, a 1934 plaque from the Big Apple Night Club at West 135th Street and Seventh Avenue in Harlem. Discarded as trash in 2006. Now a Popeyes fast food restaurant on Google Maps.

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Entry from July 25, 2011
“Own your age in bonds”

"Own/Invest your age in bonds” is a popular rule of thumb for investing. For example, a 20-year-old should have 20% in bonds and 80% in equities, but a 50-year-old should have 50% in bonds and 50% in equities.

The “your age in bonds” investment advice has been cited in print since at least 1993 and has been popularized by financial adviser Jack Bogle.

29 March 1993, Atlanta (GA) Journal-Constitution, “Personal Finance,” pg. E2:
Unless you are under 30 or over 70, you should invest your age in bonds, Pond says, The rest should be in stocks.
(Jonathan Pond, a Boston-based financial author—ed.)

Google News Archive
17 September 1995, Sunday Courier (Yavapai County, AZ), “Bonds aren’t the best investments” by Mike Beatty, pg. 3D, col. 2:
Some financial planners recommend having a percentage equal to your age in bonds and the balance in stocks If you’re eighty years old, this would mean having eighty percent of your portfolio in bonds and twenty percent in stocks. I find this rule of thumb a little too conservative for most investors but it still encourages some equity investments.

Google Groups: misc.invest
Newsgroups: misc.invest
From: “IFC, Ltd.”
Date: 1996/09/19
Subject: Re: IRA investing-stocks or bonds?

When investing, the rule of thumb is to invest your age in bonds and the rest in growth securities. In other words if you are 45, 45% of your investment would be in bonds or safe investments.

Google Books
The Cooper Files
By Sherry S. Cooper
Toronto: Key Porter Books
Pg. 342:
A very conservative (maybe even too conservative) rule of thumb is to hold a proportion roughly equivalent to your age in bonds and the rest in stocks depending on your risk tolerance, liquidity needs, etc.; so if you are thirty years old, hold 30 percent in bonds, and if you are fifty, hold 50 percent in bonds.

Google Books
The Bogleheads’ Guide to Investing
By Taylor Larimore, Mel Lindauer and Michael LeBoeuf
Hoboken, NJ: J. Wiley
Pg. 35:
Mr. Bogle suggests that owning your age in bonds is a good starting point. So, a 20-year-old would hold 20 percent of his/her portfolio in bonds.

Google Books
Mutual Fund Investing for Canadians for Dummies
By Andrew Bell and Matthew Elder
Mississauga, Ont.: J. Wiley & Sons Canada
Pg. ? (Chapter 26):
Remember the old rule: Own your age in bonds and cash. So, according to the traditional saw, a 40-year-old should have just 60 percent of her money in stocks. That seems overly conservative to many people in our go-go age, where retirees can look forward to 25 years or more after quitting work. But if you don’t own at least some bonds, then you’re walking a tightrope—with a noose around your neck.

New York (NY) Daily News
Money Matters with Wes Moss: Five income strategies for the young and old
Wes Moss
Monday, April 20th 2009, 3:52 PM
John Bogle, the founder of Vanguard Funds advises investors to “own your age in bonds.” This is great advice, but what does it really mean? It means that if you’re 30 years old, you should have 30% of your portfolio invested in bonds, 50 year olds should have 50% of their portfolio in bonds, and so on.

Rick Ferri
Posted: Sun Oct 11, 2009 6:14 pm
Post subject: An Age Old Question - Your Age in Bonds? 
Age plays an important role in determining asset allocation. However, can you determine portfolio asset allocation based solely on a person’s chronological age? The general consensus is yes, the older you get, the less risk you should take. But is this naive model good enough or should adjustments be made? Young people tend to have more similar financial situations and do more easily fit a one-size-fits all model. However, older people have more diverse financial situations and adjustments to the age-in-bonds model are appropriate. Read An Age Old Question by Richard Ferri, CFA and Brigham Young University professor Craig Israelsen, Ph.D. Published this month in Financial Planning Magazine.

Jack Bogle: ‘This is the most difficult time to invest’
By Walter Updegrave, senior editor
January 4, 2011: 1:08 PM ET
You often cite a pretty conservative rule of thumb: Own your age in bonds, meaning 60% of your portfolio if you’re 60 years old. Is that still true, given the low yields?

It’s a very rough guide just to start you thinking about the problem. When you retire, you start to rely on investment capital rather than your human capital. And you’ve got more wealth at stake and less time to recoup it, which means you’re going to take these fluctuations more seriously.

I think I can speak for other people in their antique years—you get more nervous. The bond position means you’re less sensitive to behavioral factors. It gives you an anchor to windward. 

Posted by Barry Popik
New York CityBanking/Finance/Insurance • (0) Comments • Monday, July 25, 2011 • Permalink