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Originally Posted by 44Apple
At what point should one change from being an investor to a "saver"?
I've been retired a number of years and have invested all my adult life. Luckily, we have enough non-investment money to live on.
I now wonder if I should gradually begin selling my ETFs, Mutuals, and stocks and move all the money into fixed income.
I know the outcome will be lower and stable, but I won't have to deal with the daily ups and downs.
I'm familiar with the 60/40 rule but wonder if I should go 0/100.
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The yield curve peaks at 1 year and then sharply inverts out to 10 years. A ten year treasury bond currently yields less than a one month note. If you truly believe inflation has peaked, and the Fed is done raising rates, (which I don’t) then an increased allocation to bonds would be appropriate. However, don’t kid yourself that longer term bonds are a stable investment. The longer the maturity of a bond, the longer it’s duration. Duration is a measure of a bonds price sensitivity to changes in interest rates (when rates go up, prices go down, and vice versa). With a yield of only 3.8% on a ten year UST, interest rates would only have to go up by less than a half of one percent for the price decline of the bond to totally whipe out the bond yield. Be careful out there.