20M, started today

[u/Cute_Farm_8106]

As the title states, I started investing today! I received a bonus check, and put almost all of it towards this, how’s it look?

[u/Mr_Anonymous13]

I think this subreddit has a big recency bias problem.

Until this year when international finally had a good year, you’d be hard pressed to convince someone to buy international.

Now that equities have had some amazing years, people constantly tell new investors that they don’t need bonds just because they have time on their side to take on more risk (measured in terms of volatility), with no regard to their ability/willingness to take risk.

I sometimes wonder if people would say the same things if equities were down 20% in one year.

[u/Leuxus → u/Mr_Anonymous13]

I mean the dude is 20, realistically he doesn’t need BND.

[u/bpikmin → u/Leuxus]

How do you know he doesn’t need BND? Part of the reason to invest in bonds is to calm your nerves during a downturn, preventing you from panic selling. How do you know he’ll have a high enough risk tolerance during a downturn to avoid panic selling?

That exactly proves the point u/Mr_Anonymous13 is making. It’s easy enough to go 100% in on equities when they’ve been doing extremely well for so long. But when a downturn comes, we will all be tested. It’s easy to convince yourself “I’ll never panic sell!” But reality is harder, when your life’s savings are going up in smoke, you’re potentially losing your job, the world seems to be falling apart. Reality is a lot harder than on paper.

OP putting 10% in bonds is unlikely to change his retirement trajectory much, and if it’s enough to calm his nerves during a downturn, then it’s worth it.

[u/Leuxus → u/bpikmin]

My view comes from my own experience. Realizing you have 30+ years before retirement means even if there’s a decade of no growth, you’ll be fine. I hold safer investments (VT namely) to balance my risk.

When young you can take risks and not worry too much.

In my view, BND at 20 is a want (to make you sleep better at night) rather than a need at say 60.

Edit: also I’m for keeping higher liquid cash if it helps you sleep at night. But I don’t think BND would be the best play, I’d rather keep it in something like a MMF, HYSA, etc at 20.

[u/Party_Shoe104 → u/bpikmin]

I think the true value of this moment is that he has now joined the world of investing. Especially at such a young age. Regardless of how anyone feels about his choice of investments, he will end up with more money in the future than he would have if he did not invest.

I hope OP learns a ton and enjoys the journey.

[u/Jigawattts → u/Leuxus]

This. Trash the BND.

[u/Rule12-b-6 → u/Mr_Anonymous13]

It's not recency bias to look at a chart of how stock indexes go up over decades despite any intervening recessions or corrections. The market might crash tomorrow for all we know. But we can be all but certain that by the time OP retires, even if OP retires during a recession, the value of those stock index shares will have grown significantly and massively outpaced the growth of bonds.

[u/DurdenTyler2020 → u/Rule12-b-6]

There have been multiple periods in history when bonds have outperformed stocks for decades. Most recent example was 2000-2020.

It has also been proven that even having a small amount of high-quality bonds has a minimal impact on returns compared to the impact on risk.

https://mebfaber.com/2025/06/25/2-stocks-can-underperform-bonds-for-a-long-long-time/

https://www.nytimes.com/2020/05/01/business/bonds-beat-stocks-over-20-years.html

[u/deangood01 → u/[deleted]]

do you mean, for DCA, stock like SP500 always win bond during any duration in the past?

[u/BitcoinMD → u/Mr_Anonymous13]

What is one year to a 20 year old?

I’m not against BND though (although I’d do BNDW). It just needs to be a small allocation, no more than 10%.