Key insights
- The user is questioning the allocation of corporate bonds within their Roth IRA, given their preference for higher-risk, higher-return investments within the Roth and the existence of a separate bond fund. The discussion revolves around optimizing asset allocation within a Roth IRA versus a taxable account, considering tax implications and risk tolerance. The impact on US equities is slightly negative, reflecting a potential shift away from equity investments within Roth accounts for some investors.
I decided that inside of my Roth is where I want to take my biggest risks vs. returns, and to keep bonds in a separate bond fund to maximize the use of the $7500 limit for stocks.
However, even at a risk level of 10/10 my automated Roth still keeps 7% in corporate bonds unless I manually adjust those to 0%.
Is there a reason to keep bonds in an automated Roth if you keep a separate bond fund? Are there reasons why keeping bonds out of a roth in particular would be bad, as long as you have a bond portfolio elsewhere?