When do you buy ETF Bond in your DCA?

[todefendthetruth]

Hey there,

I am a nOOb wrt DCA portfolio. I am studying different strategies but all shared the same take away message: diversifying your portfolio reduce the specific risk. It’s clear to me!

So, a question is: when do you buy ETF bond for a 20y DCA? I just started my DCA and it’s currently 90 stock and 10 gold. I wanted to rebalance in 70 stock, 20 bond, 10 gold.

If you have any further doc to deep dive in. Please share it. Appreciated.

Cheers

 

[wrennelson143]

@todefendthetruth Just as often as you purchase other ETFs or stocks.
Add the bond ETF to the rest of the mix.

 

[jrchristian]

@todefendthetruth I don't understand the question, is it when/whether/how you (re)balance a portfolio that you do not intend to draw from for 20 years, or is it how do i get from 90/0/10 to 70/20/10 (stocks/bonds/gold) which you have already decided?

The latter seems trivial: buy 100% bonds with your income, until another asset class would fall behind more than bonds.

The former depends on things. Why is it a 20y portfolio anyway, what happens in 20y? For such a time frame, it's probably good to have a lot (or everything?) in stocks ETFs. But if, e.g., 12 years down the line, you see that you have been lucky and now have the money to achieve the most important goals you intended, you may opt to sacrifice some long-term expected return for security.

 

[todefendthetruth]

@jrchristian Indeed, I didn’t explain it properly.

My question is specific about DCA strategy. So the first hypothesis.

In few books, they recommend to buy bond starting 15 years and rebalance your portfolio to merely bond at the end of DCA strategy.

Other books suggest to include bond in your portfolio from the beginning of your DCA.

Thanks for your feedback

It’s a 20y DCA because my boy will need these money for his future and university.