From: "Elle" 
Newsgroups: misc.invest.financial-plan
Subject: Re: Asset Allocation question: Bonds
Date: Tue, 9 Jan 2007 19:27:58 -0600
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"Will Trice"  wrote
> Elle wrote:
>> "Will Trice"  wrote
>>
>>>Elle wrote:
>>>
>>>>"jIM"  wrote
>>>
>>>>>bonds do well to reduce volatility and generate an 
>>>>>income stream.  I do
>>>>>not see them as helping returns.
>>>>
>>>>
>>>>The Trinity Study argues compellingly otherwise, with 
>>>>the thrust being that adding a certain, not 
>>>>insignificant fraction of bonds will reduce volatility 
>>>>yet yield the same returns.
>>>
>>>I think the Trinity Study agrees with Jim
>>
>>
>> It would be nice to know from where you got this 
>> quotation.
>
> From the Trinity Study (duh): 
> http://bobsfiles.home.att.net/trinity.htm

No, not "duh." Be exact with your citations or be ignored. 
It's a moderated newsgroup with admirable goals, so a 
professional patina might not be such a bad goal, ya know.

I thought you might be paraphrasing some commentator. I 
refused to yet again do homework another poster should have 
done before posting.

>> I worked from the Trinity Study matrices on success rates 
>> at http://www.retirement-income.net/run_out.htm (see 
>> tables at bottom). The last sentence above is completely 
>> in conflict with Jim's argument.
>
> As far as I can tell, these tables do not address return. 
> The Trinity Study, as far as I can tell, does not say that 
> you will get the same return as a 100% stock portfolio by 
> introducing bonds.

It says a 100% stock portfolio has not been as safe as a mix 
of stocks and bonds when drawing down. A lot of finer points 
might be inferred from this. However, I think it prudent to 
just let it stand in some opposition, in my opinion, to 
Jim's statement. People annoyed by this might also want to 
consider Robert Shiller's (Yale prof much quoted in the 
media) recent proposal that, given a choice between all TIPs 
or all stocks, he'd go all TIPs.

Also, my sense is there is some monday morning 
quarterbacking going on here: The average return of stocks 
over long periods has been x, so it will continue to be x, 
and since x is so high, it was a smart move to invest in 
stocks back then, and will be in the future. This 
implication is a disservice to newbies.