I've always used value-tilted indexes, and am hoping that they will suffer less when the bubble pops. With that and a healthy dose of fixed income (which I chose years ago based on an assumption that the equity portion of the portfolio could drop 50% in a downturn at any time) I'm trying to stick to the plan and not try to time the market. Even though it very much feels like the bubble is near its peak (if not just past it!) I do still believe on some level that market timing is a fool's game, so I'm trying to stay convinced that the steps I've already taken are all one can rationally do.

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mancerayder 4 hours ago | parent | next [-]

What sort of fixed income that doesn't require much research? A broad bond fund?

What are the implications of bond prices in this dubious interest rate environment? It seems no one knows what the Fed should or wants to do, including the Fed. And if the economy is on shaky ground, won't that be bad for bonds if companies can default?

	▲	tempestn 4 hours ago \| parent [-]
		At least historically, the research I've seen is that one is better off keeping risk in the equity side of a portfolio, not trying to eek out gains on the fixed income side. So that would suggest sticking with intermediate duration, government bond (funds). You're not expecting it to earn much, but it should hold its value over the long term. This will reduce the expected return of the portfolio, but the goal is to get volatility to a level you can stomach, allowing you to ride out fluctuations on the equity side. Because even though we can all look at the current situation and say the stock market appears overvalued, we can't know how much higher it will go, when we've hit the top, or once it starts declining, when we've hit the bottom. Even experts do no better than luck would dictate at that game.

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KK7NIL 4 hours ago | parent | prev [-]

I would stay away from US fixed income due to low spreads, higher than usual inflation and a devaluing currency in forex.

I'd say ex-US international value stocks, especially EU, are a better hedge.

	▲	tempestn 4 hours ago \| parent [-]
		Agreed on globally diversified value stocks/funds. Personally I still like to have a fixed income cushion as well, though there are certainly arguments both ways on that. (And on whether to globally diversify the bonds you do hold.)