We discuss why bonds aren’t great for a portfolio anymore as of recent, especially the younger you get. In a Roth IRA especially, it could be a poor allocation of your funds.

Links in Today’s Video:
Vanguard Tool:
Vanguard Questionnaire:

Great articles on Bonds:

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Timestamps:
0:00 – Intro / Start Here
1:12 – Format of Today’s Video
1:50 – What is a Bond?
4:24 – Bonds & Younger Investors
8:43 – Asset Allocation Thoughts
11:38 – Questions to Ask Yourself

Questions to Assess Risk Tolerance:
– If my portfolio were to drop 30, 40, or 50% in 6 months, would I be OK?
– Do i have a consistent income that can stomach volatility?
– Do i have multiple streams of income?
– Is my investment time horizon short or long?
– Am I a more naturally aggressive or conservative type of investor?
– In how many years will you start making withdrawals on your investments?
– Do you expect your annual income to increase over the next few years, or go down?
– What is your next biggest purchase, do you have enough money saved for that? How important is capital preservation for your big purchase?
– Do you care about protecting your portfolio, or higher returns?

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😺 WHO AM I: I am not a cat. My name is Humphrey Yang, I’ve built multiple businesses and am passionate about Personal Finance, Investing, among other things! If you’re trying to build a solid foundation of financial literacy, learn to invest, or become financially free – then I’m here for you!

📧 GET IN TOUCH: I’d love to hear from you! Tweet me @HumphreyTalks directly and I can respond there. If you have a longer question, or if you have a business related inquiry, please then send me an email at humphreytalks@gmail.com. I try my best to reply to all e-mail but sometimes I do not have enough time to respond to everyone.

PS: I am not a Financial Advisor, any investment commentary are my opinions only. Some of the links in this description are affiliate links that I do receive a commission for….(read more)

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REVEALED: Best Gold Backed IRA

Investing in a Roth IRA is a great way to build wealth and secure your financial future, especially when you are young. With the potential for tax-free growth and withdrawals in retirement, a Roth IRA can be a powerful tool for saving for your golden years. However, not all investments are suitable for a Roth IRA, especially when you are young.

One investment that you should avoid in your Roth IRA when you are young is bonds. While bonds can provide a stable source of income and a hedge against stock market volatility, they are not the best choice for a Roth IRA, especially for young investors. The reason for this is that bonds tend to have lower returns compared to stocks over the long-term, which can limit the growth potential of your Roth IRA.

When you are young, you have a longer time horizon to weather market volatility and take advantage of the higher growth potential of stocks. By investing in stocks in your Roth IRA, you can maximize your investment returns and build a larger retirement nest egg over time. Additionally, since Roth IRA contributions are made with after-tax dollars and withdrawals are tax-free in retirement, you can benefit from the tax advantages of investing in higher-growth assets like stocks.

Another reason to avoid investing in bonds in your Roth IRA when you are young is that you may miss out on the opportunity to take advantage of dollar-cost averaging. Dollar-cost averaging is a strategy where you invest a fixed amount of money at regular intervals, regardless of market conditions. This strategy can help reduce the impact of market volatility and potentially lower your average cost per share over time. By investing in stocks in your Roth IRA, you can benefit from dollar-cost averaging and maximize your investment returns over the long-term.

In conclusion, while bonds can provide stability and income, they are not the best investment choice for a Roth IRA, especially when you are young. By focusing on higher-growth assets like stocks in your Roth IRA, you can maximize your investment returns, take advantage of dollar-cost averaging, and build a larger retirement nest egg over time. So, avoid investing in bonds in your Roth IRA when you are young, and instead, focus on investing in stocks to secure your financial future.