I would strongly advise against a 40% bond allocation in your portfolio. In fact, I probably wouldn't suggest putting any money in bonds, certainly no more than 10%, even in 'good' bonds. Corporations or institutions offer bonds for their financing purposes. They pay a yield on these bonds. This yield is tied to the interest rate. Interest rates are at historic lows Bonds with relatively higher yields are typically referred to as 'junk bonds', and are generally quite risky, and you are likely to lose the whatever amount you paid for the bond; however I have no comment on a diversified portfolio of junk bonds. What you're left with then is bonds with relatively low yields (as they are less risky; and the interest rates are low).
If the interest rates rise, then your bonds will fall in value (as few people will buy them), and the yield on them will remain very low. This is because bonds and interest rates have an inverse relationship. Again, interest rates are at historic lows. The question then becomes what else you can invest in, the dominant opinion being the equity market.
Stocks typically pay dividends to their shareholders. This dividend payout ratio far exceeds the yield you would receive from quality bonds. If you reinvest your dividends, overtime your portfolio will increase substantially as a result of compound interest. If you elect to use your dividends at least partially as income, then you will receive a larger income than bonds, and your stocks should (depending on what you buy), over a long period of time, average an increase in capital growth relative to any yield you would receive from bonds. The only "problem" here is the additional risk factor, bonds are less risky because the returns in the future are known, and if you buy high quality bonds, the return is predictable. The return on stocks however is unpredictable, dividend payout ratios change, stocks prices fluctuate, the underlying value of a company changes, and the world is in a precarious financial position at the moment imo. Having said that, historically you will see greater returns in the equity market than the bond market, you should have no trouble with liquidity (if you plan your dividend receipts properly), and the stock market now is not particularly risky over a long period of time. If you don't want to do your homework to select your own shares, then put your money in a low-fee diversified fund, or an index-fund.
I would really question any financial advisor's advice on a 40% bond allocation, even for someone that is older. Shares via dividends offer liquidity, and more of it than bonds. Interest rates are at historic lows. Stocks experience capital growth, whereas bonds are highly unlikely too. Even if it were risky (the fluctuation of share prices and the market), the compound growth one would experience via investing in shares would still outweigh the yield of bonds. Decreasing market exposure is also a dubious reason, if you buy good quality common stocks, or invest in a low-fee diversified fund, in the long run you are unlikely to lose money (less psychological factors). If you were nearing the end of your life, and were incredibly risk averse, you still would probably be better with an annuity if you didn't plan on leaving an inheritance, or a reverse mortgage if you had equity on your home. I'm really struggling to see a single, not insignificant benefit from such a large bond allocation.
that's probably the best tip. Pro tip #2: if something looks like shit and smells like shit, it probably is a shit, or translated: guys with pro learning strategies that are going to teach you are most likely a ReturnofWildy irl.
