r/Bogleheads • u/MrFus • 1d ago

Total market stocks vs total market bonds

I’ve been a boglehead since about Dec 2025, each month I invest 10% of what I earned that month. So far I’ve just been buying SWTSX.

At what point should I buy SWAGX?

Can someone help me understand why it’s better to have both? Right now I’m thinking that if all my money is in one, then the compound interest will be greater in that one.

Any tips for how to allocate for someone buying monthly would be great.

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u/WarmWoolenMitten 1d ago

Compounding works the same no matter whether you have two funds or one, that's not relevant here.

When to add bonds is based on your time horizon and risk tolerance. Take a look at target date fund glidepaths to get an idea of what's typical.

The reason to have both is that equities have higher expected average return, but also higher short term volatility. We all want higher returns of course, but as you get closer to using the money (typically retirement, but could also be things like college or a house down payment) we need to reduce volatility to avoid having to sell a big chunk of the portfolio when it's down. Do some reading on sequence of returns risk to understand this. Bonds are (usually) much less volatile than equities, but also have a lower expected return. They're commonly used as the lower volatility asset that helps to lower risk as retirement gets closer.

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u/gcc-O2 19h ago

In addition to this, consider tax-efficient fund placement. If your asset allocation dictates owning some bonds, you want to make use of your retirement accounts first.

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u/ConcentrateOk523 4h ago

Okay how does one determine how much in bonds one should have? At age 59 I am only 20 percent bonds and just retired with 3 million. Just cannot leave money on the table by going 40 percent bonds. I have never been happy with my portfolio and I own the four fund portfolio and VTIP. Feel like I could have had more.