The kids are out of school now. My oldest will be starting 5th grade next fall and my youngest will be going into 2nd grade. Both good ages. They run around the house, footsteps and laughter, sometimes cries, echoing through the house. They leave a mess everywhere. Remnants of their play. But it’s enjoyable. I tell myself that I will miss having a messy, noisy home once they are out of the house. Which is right around the corner if I don’t blink too fast. I used to think I liked a quiet house, now when I’m home alone I hate the silence. It just doesn’t feel right. Not at this season of my life anyway.

As summer rolls around, we have a camping trip planned with my parents. We’ll be going up north to spend a week out in the Redwoods. I started noticing in the last few years that all of our camping stuff is breaking. We’ve taken really good care of our equipment, keeping the original boxes for things, keeping things clean and well stored. But time can’t be stopped and our stuff is old and gotten its money’s worth of use and abuse. So we bought a new camping chair at Costco for $39.99. A $22 new air mattress for my daughters, for the first time they will be sleeping on their own mattress. And Ticket to Ride Europe for $47 (not just a camping item but I’m bringing it). Grand total of $109 for new things.

We had a good 10 year run on our camping gear. Once everything is purchased, which I did back in 2011, camping can be a pretty cheap amazing vacation. So now we have a mix of new and old. We spent the last weekend inventorying through our “bin” where we keep all our essentials.

At work, there’s some good news on the start of my new job. What has been lingering on for months is finally coming to a resolution. In the next few weeks we should be able to start demolition of existing structures and get ready for foundation piles.

This will be a fun challenging job with good team members. I’m happy to be on this one from the beginning. My last project, I was thrown into the fire after they’d terminated the previous superintendent. I had to live and make good on all the bad decisions made before I got there. All the while not complaining or pointing the finger to anyone about the state of the job, just accepting as if I’d made the horrible decisions. It was a test of character and I think made me a better person and builder.

All that suffering in 2023 has turned around and led to good, here I am at the cusp of leading a team to build a high profile project for both the company and the community where it’s located. It’s scheduled to complete in 2027. The best part will be the commute. It’s only 37 miles away, or 35 minutes away in the morning and 1hr-1.5 hrs in the afternoons.

So things are going great in the Boring Middle, and it’s not so boring because I’m not focusing as much into the future. I notice a huge shift in happiness when I’m not day dreaming about my FIRE date and checking my net worth daily. I’m just living life, trying to memorize the details, before the next chapter arrives.

To add to all the fun, the stock market is marching upwards. To date the US total stock market has returned 12.77%, with the S&P returning 14.57%. Damn.

My personal return is 13.30% (at 6/21). This has driven us to 85% FI. I’m 15% away from my number. 100% equities. I have more money now than I’ve ever had in my entire life. If I include my home equity in my net worth, it makes me dizzy.

I’m so close.

Yet being so close has done things to my psyche that I wasn’t expecting. I’ve always enjoyed having a stomach of steel when it comes to portfolio risk. The future has always been so far away; well used to be so far away…it’s not so far away anymore.

The bears of 2018, 2020, and 2022, were taken in stride, without a blink. 2020 especially. I remember talking with co-workers who were huddled at their desks, selling, as the market cratered in March of 2020. The stock market shutting down trades because it was crashing so fast. Meanwhile I knew to hold on. I knew I would ride it out no matter what happened. The daily check on my investments wasn’t the real value of my portfolio, no, that would only be known once I sold.

Things are different now that I’ve amassed a large sum of money. I crossed some unmarked threshold and now a hidden part of my brain has been unlocked and a primordial natural instinct to protect has been unleashed. It reminds me of when I became a father and I had a sudden immediate feeling in the hospital room where we were staying overnight after the birth, that I needed to protect my kid and wife. From what? I don’t know. But the feeling was strong and undeniable.

I feel this way with my portfolio baby. I’m it’s father and I have a sudden urge to protect it. Except it’s the opposite timeframe of protecting kid.

When you have a kid, it’s when they are young that they need the most protection.

With a portfolio, when it’s young you can ignore it and not give two damns about it. It’s when the portfolio grows up that it needs the most protection and care.

So that’s what I feel now. A sudden instinctual urge to protect my ‘grown up child’ portfolio from harm. A portfolio I’ve nurtured and raised from zero, like a precious fruit tree, that will one day feed me and my family till I die.

How do you protect a portfolio? Diversification. Bonds. Not being to heavy in one market.

I’ve been thinking about bonds lately. Dreaming about them, quite literally.

VBTLX.

BND.

How much of a percent of my portfolio should I rebalance to bonds?

90/10?

85/15?

70/30?

Or should I remain 100% stocks and get as much return as I can? There’s no rush to retire after all.

These are the half remembered thoughts while I’m trying to go to sleep or just waking up to the buzz of my alarm clock.

The last time I bought bonds was in December of 2019 when I was 36 years old. I’m not claiming to know any foresight into what the markets will do or advocate any timing, but it was a good time to buy bonds. I dumb lucked into bonds after reading some Boglehead stuff combined with some perma bear writers and feeling like I needed some bonds for a true 3 fund. So I rebalanced to a 90/10.

Then around April 2020, I sold the bonds and bought VTSAX. I haven’t held bonds since.

But now I feel that same urge I did in 2019 to add some bonds. Both back then and now, I don’t think a crash is imminent. I’m solely thinking bonds to diversify and protect. To be a true Boglehead Lazy 3 Fund kinda guy. To sort of lock in a glide path to my retirement in 2026. Now would be the time to do it while interest rates are high and equities are at all time highs. When the interest rates are cut, I’ll get an immediate boost in price valuation.

A bond allocation isn’t about making money. A boost in price from interest rate cuts would be a bonus prize. The purpose of bonds is to diversify a portfolio and stabilize it from turbulence, and sometimes a bit of fixed income. The most tax efficient place bonds should live is in a pre-tax account, like an IRA or traditional 401k. The dividends are unqualified after all.

What’s the difference between buying bonds and buying stocks? When you buy a bond you are loaning money to either a business or a government. There’s a bunch of different types of bonds, but like stocks, I try to keep it simple and so that means buying a bond fund.

There’s always that inner struggle with what to do when you are a DIY investor. It’s like being a boss at work. Nobody is going to tell you what to do. You have to make a decision and be able to defend it. You have to live with it. Making impulse decisions while investing is usually not the best route. So I’m taking my time on the decision to buy bonds, letting it simmer on the back burner of the mind.

So far things have been easy. There’s not much to do when trying to maximize returns, just go full bore equities and chill. But there’s another phase that I’m entering in accumulation mode, more like being dragged in against my will.

Maybe its age taking the edge from my risk taking prowess. These days, the first of my 40th decade, a more stable portfolio sounds better and better as the market climbs. I can see I’m taking my first steps into protect and preserve mode. It came on quick. That little voice that speaks while you are teetering on the verge of slumber has spoken in a soft whisper: bonds, it gently says. A seed planted in the soil of my mind. The third fund is finally knocking at my front door. Dropping by without a text or call. Do I answer?

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How do you feel about bonds? What’s your allocation if you have any?

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