[arthurdent]

1. a lot of people argue for things without backing it up.

2. it depends what you mean by "risk". arguments claiming bond allocation in your portfolio are less "risky" describe risk as "volatility of returns", which in finance are measured over shorter intervals than 40 years.

patrick is specifically accepting short term volatility in return for the higher EV of returns.

the marketplace prices debt instruments (especially US treasury issued) over the long term with cheaper expectations for returns specifically because it has lower variance of returns.

[bradshaw1965]

So why not move even further up the risk chain to all Emerging Markets or invest at greater then 100% equity by using leverage? Fact is, adding a small amount of fixed income investments smooths investment returns and has very little effect on total return whether you accept standard deviation variance as a measure of "risk" or not.