Summarizing an article from Morningstar. The source is Christine Benz (Morningstar Director of Personal Finance and Retirement Planning) who I consider to be a trusted voice. Note that she also hosts The Long View podcast which I frequently listen to. Short summary of Key Takeaways:
1. Make sure you're not underweight "unloved" market segments, including ex-US equities as well as high quality fixed income (for those who are in or near retirement).
2. Event though inflation is down, don't become complacent. For those under 50, the long-term return of equities do a good job of beating inflation. If your in/near retired consider TIPS or I bonds for carving out some inflation protection.
3. Take a closer look at your cash holdings. The past few years cash has been easy to pick relative to bonds, but yields are dropping in many brokerage sweep and other cash accounts, so be mindful of how much cash you really need to hold.
4. Don't Get too Tactical with Bonds. Hold bonds that align with your spending horizon. Under 5 years stick to short term bonds, etc.
5. Key Tax Sheltered Savings Opportunities to Consider. I think this is largely captured in another thread - but look for opportunities to take advantage of additional catch up contributions for those who are 50+/60+, fully funding your HSA, and for extreme savers the mega-backdoor Roth.
Personally, I've reallocated our 401ks to increase our international equities exposure with a target of at least 20% of equities (noting that exposure to international equities is a "hot button" topic on the Bogleheads forums). We also have a bit of a tilt to small-cap value (another Bogleheads "hot button" topic). I'm working on a plan to exit a Balanced Fund in our brokerage (i.e., tax plan as well as reinvestment plan) and am evaluating bond funds for a portion of the proceeds. Her (and others) advice regarding picking bonds that align with your spending horizon seems salient
Anyway, sharing FWIW.
Happy Holidays to all.
