{"id":4699,"date":"2026-06-19T17:35:32","date_gmt":"2026-06-19T17:35:32","guid":{"rendered":"https:\/\/orlandorelocationreport.com\/?p=4699"},"modified":"2026-06-19T17:35:32","modified_gmt":"2026-06-19T17:35:32","slug":"the-savings-game-ratio-of-equities-to-bonds-in-your-portfolio","status":"publish","type":"post","link":"https:\/\/orlandorelocationreport.com\/?p=4699","title":{"rendered":"The Savings Game: Ratio of equities to bonds in your portfolio"},"content":{"rendered":"
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I am a conservative investor, and I generally maintain a 50\/50 ratio of equities and bonds in my portfolio. I have recently increased the percentage of equities in my portfolio. Because I am well past 73, and I still have some traditional (non-Roth) IRAs in my portfolio, I do have to take annual required minimum distributions (RMDs).<\/p>\n

Read more TFA\u2019s multi-talented Brian Dillard taking his skills to Tampa and USF<\/a><\/p>\n

When I do take RMDs in 2026, I have taken withdrawals primarily from the bond and target funds portion of my portfolio. When I do this, the result is that I increase the proportion of equities in my portfolio, and reduce the percentage of bonds.<\/p>\n

Because of the current high inflation in the U.S., which is unlikely to change very much in the near-future, I think it makes sense to increase the percentage of equities (common stock) in my portfolio. When long-term interest rates increase, which they have recently, the value of long-term bonds in your portfolio falls in price. Until inflation rates decrease \u2014 and I doubt they will fall dramatically in the near future \u2014 I think it makes sense to increase the percentage of equities in your porfolio and reduce the percentage of long-term bonds. That\u2019s what I have been doing.<\/p>\n

As I have said many times in my column, I invest the equity portion in my portfolio mainly in diversified index funds. (An example is an S&P index fund.) That has worked for me on a long-term basis, and I don\u2019t expect to change my investment philosophy. Vanguard has indicated to me that over the last year, my portfolio has increased over 15%. The bond portion of my portfolio, which was almost 50% of the portfolio, has increased slightly more than 8% over the last 12 months.<\/p>\n

In previous columns, I have recommended the Vanguard Dividend Appreciation Index Fund, VDADX, which invests in companies that pay high dividends and have a history of increasing them. I have invested in this fund for more than 15 years. The return over the last year was an increase of 21.6%. I always reinvest dividends from this fund, and do not make any withdrawals as part of my required RMDs. Vanguard has indicated that over the last 10 years, the fund has had an annual average increase of 13.19%. Morningstar consistently gives the fund an excellent rating.<\/p>\n

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For many years I have only invested in U.S.-based equities, because their returns on average have been higher those for overseas equities. However, this situation has been reversed. As a result I have become more diversified and now invest approximately 10% in overseas equity funds that have had better returns.<\/p>\n

Many investment advisers have recently recommended that investors consider investing 90% of their portfolios in equities and the remaining 10% in bonds or money-market funds. I think this is an extreme position, and I would not recommend this allocation except for investors who are many years from retirement.<\/p>\n

I have always recommend that investors maintain a small percentage of their investments in safe investments, such as money-market funds, that are immediately liquid but that also pay reasonable returns. For example, I also maintain some funds (less than 3%) in a Vanguard money market fund that currently earns 3.61%, that are immediately liquid, more liquid than one-year CDs , which currently pay approximately 4%.<\/p>\n

<\/p>\n

Bottom line: As long as inflation rates remain high \u2014 and, in the short-run, I think that will be the case \u2014 you may want to consider increasing the percentage of your portfolio in equities, as opposed to long-term bonds. The federal reserve is unlikely to reduce interest rates in the short-term. If they decide to increase interest rates, rather than decrease them, equities should continue to do better than bonds<\/p>\n

Read more Miss Manners: Am I allowed to send back a tiny restaurant meal and request real food?<\/a><\/p>\n

Elliot Raphaelson welcomes your questions and comments at raphelliot@gmail.com.<\/em><\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

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Because I am well past 73, and I still have some traditional (non-Roth) IRAs in my portfolio, I do have to take annual required minimum [\u2026]<\/p>\n","protected":false},"author":1,"featured_media":740,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[24],"tags":[],"class_list":["post-4699","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"yoast_head":"\nThe Savings Game: Ratio of equities to bonds in your portfolio - Orlando Relocation Report<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/orlandorelocationreport.com\/?p=4699\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The Savings Game: Ratio of equities to bonds in your portfolio - Orlando Relocation Report\" \/>\n<meta property=\"og:description\" content=\"I am a conservative investor, and I generally maintain a 50\/50 ratio of equities and bonds in my portfolio. 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