Stocks or Bonds?

[kindmuse]

Greetings all~

What's a good percentage right now between stocks and bonds in my 401K?

Thanks!

K

[jkuo13]

That depends on how old you are and what sort of risk tolerance you have. The younger you are, the more you should have in stocks. I'd say if you're under 30, you should have basically everything in stocks (well, stock mutual funds anyway). When you're younger, you have time to weather the market volatility and should get higher returns. As you get older, you'll want to drop the stock percentage and up the bond percentage to increase the stability of your portfolio. Also, if you have a higher risk tolerance and come stomach the volatility for higher returns, you should skew your balances more towards stocks. If you like to play it safe, favor bonds a little more.

Depending on where you have your 401K account, your financial institution might provide suggested bond/stock percentage allocations. With my Vanguard account, I get two pie charts showing my 100% stock allocation right next to my suggested 90% stock/10% bond allocation.

[fred333]

Those are some great points. I know if you are young I would go for the bonds to where you can let the money sit.