Do you allocate a certain percentage of your portfolio to bonds? Bonds were historically used for 3 reasons: 1️⃣ Income 2️⃣ Stability 3️⃣ Psychological comfort They made sense when yields were 5–8% and pensions covered the basics. Bonds dampened volatility and paid you to wait. But today? If you have: • Long runway • Strong cash flow • Emotional discipline • No pension (so you need growth) You don’t automatically need bonds. Modern evidence from academics like Eugene Fama and practitioners like Warren Buffett has shown that long-term equity exposure has historically delivered superior real returns — and volatility only matters if you’re forced to sell. So what can replace bonds? ✔️ Global low-cost equity ETFs (broad diversification) ✔️ Cash wedge for short-term needs ✔️ Flexible withdrawal strategy ✔️ Human capital (your earning power) ✔️ Real assets (selectively) Bonds aren’t “required.” They’re a tool. If your plan can survive a 20–30% drawdown without panic selling… growth may be the smarter ballast.
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26 Comments
Jackie @mountainmama · 6mo
I have a defined benefit pension that I consider my "BOND" allocation. This gives me space, both psychologically and in my portfolio, to allocate more to equities! I use ZMMK for my cash wedge.
Brent E@bme01 · 6mo
You’re a mind reader. Loved to read this as I’ve been mulling this over for my personal strategy just this week.  Thank you for sharing 
Mark Lotocky@mark_lotocky · 6mo
Micheal Kitces has an interesting concept call the retirement tent. Where you set up 5 to ten years of spending leading up to retirement in cash to spend over those years and then hold the remaining in equity. Essentially you use cash to move past the sequence of return risk once you stop earning money and once that moment is passed you are perfectly fine to be 100% equity through the remaining of retirement. The problem is that we don’t know when the sequence of return risk has passed. Research shows it’s anywhere from 5 to 15 years after your last paycheque, which is a pretty big window.
Jason @homerjay · 6mo
I have 750 shares of XBB in my RRSP that produces 2 shares worth of dividends a month. It’s about 10% of my overall portfolio. I’m 44.5 years old.
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