To me, an oak is a retiree looking mainly for income (as opposed to an acorn just starting out). Generally a retired person should be split between bonds and stocks. 50/50 is a good ratio but some recommend a split of 60% stocks and 40% bonds.
I initially thought all bonds would be a good idea. Note I am not a retiree at this point but I have been advising my mom. We selected the BND fund and put all of our eggs in the one basket. Problem with that is it was right before interest rates started going up. When interest rates go up, bond values go down.
So we slowly started adding in a balanced mutual fund that invests in both stocks and bonds. Ultimately my mom is telling me that she doesn’t need the money any time soon, so we started mixing in Berkshire Hathaway. Berkshire counts as a stock but with nearly $240 billion in short-term treasuries it really acts kind of like a balanced fund. The difference between Berkshire and the balanced fund we have been using is that the balanced fund is tech heavy and Berkshire has Apple and Amazon but it’s a smaller percentage of the overall “fund”. Berkshire is actually considered a conglomerate that has businesses it owns as a whole and others that it owns a percentage of, as well as the $240 billion in treasuries. Many smaller investors use it as their only investment. I think it’s safe enough to do just that.
With around 50% stock, will my mom’s investments ever go down? Yes and it does, but not by huge amounts. The 50% bonds keep it more stable as bonds usually do the inverse of stocks. So if stocks are up, bonds are down. Now I wouldn’t bet on this to happen every single day because sometimes they do move in the same direction. With rate cuts upcoming, the up days are up days for both right now.
I do invest in bonds for myself now as well. Usually I have TMF which is 3x bonds. That way I don’t have to own as much to do the same thing (as a regular bond). I have them for when things really hit the fan and I want some cash to invest. I also use SVOL to get dividends monthly with stable principle. I mainly use this right now to have cash available for my consulting business.
There are all kinds of options these days. I would suggest searching for income funds/stocks and see what you can come up with. Stocks that you pick should generally be fairly stable. A stock fund or a balanced fund of some sort is a good idea.