This is a slight variation on Bogle’s classic Vanguard SP500 strategy. How much bonds? I’ve always thought that “your age in bonds” was solid (a 50 year old is 50% in bods), and later more aggressive measures, like “110 minus your age in stocks” or “120 minus your age in stocks” to be way too risky, build by people with experience only in long bull markets.

Now, ETFs can still be use with those conservative strategies, and for the long term. In my mind the neuro/behavioral impact of them is that since they are so easy to trade, they are seductive to traders. They don’t encourage (their marketers certainly don’t encourage) conservative use.

Finally, on diversification outside stocks and bonds … some insured bank CDs and some real estate seem reasonable, but I think the siren call there is to strange asset classes that haven’t really stood the test of time. A commodities play (ETF or not) might look good in recent-past data mining, but I think many of them tend toward craziness.

I mean, who can look at a 30-year gold chart and think that they’ll really know when to get in and out?