Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Are you kicking yourself now?
Old 07-11-2013, 06:12 PM   #1
Thinks s/he gets paid by the post
Spanky's Avatar
 
Join Date: Dec 2004
Location: Minneapolis
Posts: 4,046
Are you kicking yourself now?

We have 30% allocated to cash for almost two years. As the S&P 500 continues to rise, we are starting to question the shift to cash. For those who have a large portion of their portfolio allocated to cash, are you having second thoughts (or regrets)?

I know it's a silly question since we cannot turn back the clock and must accept whatever decisions made in the past. Just curious.
__________________

__________________
May we live in peace and harmony and be free from all human sufferings.
Spanky is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 07-11-2013, 06:29 PM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
mickeyd's Avatar
 
Join Date: Apr 2004
Location: South Texas~29N/98W
Posts: 5,884
Quote:
Originally Posted by Spanky View Post
We have 30% allocated to cash for almost two years. As the S&P 500 continues to rise, we are starting to question the shift to cash. For those who have a large portion of their portfolio allocated to cash, are you having second thoughts (or regrets)?

I know it's a silly question since we cannot turn back the clock and must accept whatever decisions made in the past. Just curious.

If your well-thought-out IPS has you @ 30% cash, well that's your Plan. My 60/40 Plan just keeps curzin along. That my deal. When we are both dead, let's compare numbers. I doubt that we will see much difference.
__________________

__________________
Part-Owner of Texas

Outside of a dog, a book is man's best friend. Inside of a dog, it's too dark to read. Groucho Marx

In dire need of: faster horses, younger woman, older whiskey, more money.
mickeyd is offline   Reply With Quote
Old 07-11-2013, 06:33 PM   #3
Moderator Emeritus
 
Join Date: May 2007
Posts: 11,044
I have ~10% in cash. I put some to work when the market dipped a couple of weeks ago. Now waiting for the next buying opportunity (TIPS maybe?). My patience will be rewarded, I think. So no regrets.
__________________
FIREd is offline   Reply With Quote
Old 07-11-2013, 06:46 PM   #4
Thinks s/he gets paid by the post
 
Join Date: Sep 2009
Location: Hong Kong
Posts: 1,575
Not really.

Any bull market can leave investors wishing they had been more aggressive just as any bear market can leave people thinking they should have sold. I can't predict the market, inflation or any other key variable relevant to ensuring my money will outlast me (rather than the other way around) so I sleep better knowing that I have more cash (or near cash) sitting on the sidelines than I probably should. My decision making may not be perfect, but it's been good enough to FIRE on.
__________________
Budgeting is a skill practised by people who are bad at politics.
traineeinvestor is offline   Reply With Quote
Old 07-11-2013, 06:55 PM   #5
Moderator Emeritus
Bestwifeever's Avatar
 
Join Date: Sep 2007
Posts: 16,375
We have maybe 15 percent in cash--we take our property taxes out of it every year and would also use it for a car or major expense. When we take SS, we will probably buy equity funds with most of the balance as SS will cover the taxes and major expenses.

It is hard to have an up day on the market like today and think of the chunk just sitting there, but it's serving its purpose.
__________________
“Would you like an adventure now, or would you like to have your tea first?” J.M. Barrie, Peter Pan
Bestwifeever is offline   Reply With Quote
Old 07-11-2013, 06:58 PM   #6
Thinks s/he gets paid by the post
 
Join Date: Mar 2009
Posts: 1,437
Just checked - I'm still at 45/35/20 equity /bond/cash. It's pretty easy for me to stick to this particular AA. I don't look at what could have happened and only work toward my own long term goals. No need to be greedy, remember pigs get slaughtered.
__________________
Retired in 2016. Living off dividends / interest and a mini pension. Freedom.
foxfirev5 is offline   Reply With Quote
Old 07-11-2013, 06:59 PM   #7
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 16,446
I think it is best to decide an AA (60/40 in my case with 6 of the 40 being cash & ST inv) and stick to it through thick and thin.

Each time I have failed to practice as I preach, I have later regretted it. In the early 2000s I should have sold stocks and redeployed more in bonds. In 2008 my AA told me to sell bonds and buy stocks but I didn't have the courage.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
pb4uski is offline   Reply With Quote
Old 07-11-2013, 07:24 PM   #8
Recycles dryer sheets
IBWino's Avatar
 
Join Date: May 2006
Posts: 423
Nope.

Our AA is currently 47/18/35 equity/bonds/cash, and we currently sleep very well at night. Our target AA is 50/25/25, but we've been accumulating cash instead of adding to our bond funds since 2009. We'll shift cash into equities and/or bonds if/when they become cheap.
__________________
IBWino is offline   Reply With Quote
Old 07-11-2013, 07:26 PM   #9
Thinks s/he gets paid by the post
Spanky's Avatar
 
Join Date: Dec 2004
Location: Minneapolis
Posts: 4,046
Quote:
Just checked - I'm still at 45/35/20 equity /bond/cash. It's pretty easy for me to stick to this particular AA.
Quote:
I think it is best to decide an AA (60/40 in my case with 6 of the 40 being cash & ST inv) and stick to it through thick and thin.
You are right! Set the AA and stay the course!
__________________
May we live in peace and harmony and be free from all human sufferings.
Spanky is offline   Reply With Quote
Old 07-11-2013, 07:33 PM   #10
Thinks s/he gets paid by the post
 
Join Date: Jul 2003
Location: Pasadena CA
Posts: 2,695
Overall portfolio is about 7% cash. Over the years I would have made more with less cash but I also just feel comfortable having these funds to fall back on even though I also have a Home Loan Line of credit to fall back on as well.
__________________
T.S. Eliot:
Old men ought to be explorers
yakers is offline   Reply With Quote
Old 07-11-2013, 08:15 PM   #11
Moderator Emeritus
aja8888's Avatar
 
Join Date: Apr 2011
Location: The Woodlands, TX
Posts: 7,166
The tendency is to think you missed an opportunity to catch an upswing with the cash that you have sitting there, but not many think they could have deployed it and took a bath.
__________________
......."Everybody has a plan until they get punched in the face." -- philosopher Mike Tyson.
aja8888 is offline   Reply With Quote
Are you kicking yourself now?
Old 07-11-2013, 08:29 PM   #12
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,905
Are you kicking yourself now?

No way! I would not be kicking myself had recent market behaviors resembled that during the 2008-2009 crash, either.

I stick to an asset allocation instead of trading on emotions or hunches, and so far this has allowed me to sleep really well.
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities.

- - H. Melville, 1851
W2R is offline   Reply With Quote
Old 07-11-2013, 08:35 PM   #13
Recycles dryer sheets
 
Join Date: Mar 2007
Posts: 92
I have less than 50% in equities. When the market was down below 10,000 I rebalanced into stocks a few times, which worked out pretty good. I slept pretty good through those years when my friends were stressed over watching their 401Ks vaporize. You never know when the next dip will be and there is no guarantee returns will return to the mean.
__________________
"I’d like to live as a poor man with lots of money." Pablo Picasso
roger r is offline   Reply With Quote
Old 07-11-2013, 08:35 PM   #14
Thinks s/he gets paid by the post
 
Join Date: Apr 2011
Posts: 1,558
Somehow, without making any changes, our gold allocation keeps getting lower.
__________________
gerntz is offline   Reply With Quote
Old 07-11-2013, 09:24 PM   #15
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
calmloki's Avatar
 
Join Date: Jan 2007
Location: Independence
Posts: 5,459
We sold all our paltry stock holdings last winter. Watched the proceeds earn 0.01% or whatever as the market made 12 or 16% this year. Maybe we will buy back in this fall... Sure am glad we don't count on my acumen with stocks for the food budget!
__________________
calmloki is offline   Reply With Quote
Old 07-11-2013, 09:32 PM   #16
Thinks s/he gets paid by the post
 
Join Date: Mar 2010
Posts: 1,649
Nope, don't kick myself. I consider it the price I pay to sleep well.
I have a high percentage of cash- 26% straight cash and 26% CD's but at least the CD's are still generating between 4% and 5.35%. Two of the 5%ers are coming due next month after having locked them up 5 years ago at that percentage. The 4% won't come due until 2017 (7 years). I may invest the cash coming due next month.
__________________
sheehs1 is offline   Reply With Quote
Old 07-11-2013, 10:13 PM   #17
Thinks s/he gets paid by the post
 
Join Date: Feb 2007
Posts: 1,905
Not really, still within my 10% band of 45% to 55% equities. Time to go back to sleep (which I do rather soundly thankfully) until the allocation goes above or below the limits and then well take a look.
__________________
ejman is offline   Reply With Quote
Old 07-11-2013, 10:14 PM   #18
Recycles dryer sheets
 
Join Date: Apr 2010
Location: Silicon Valley
Posts: 198
We are ~40/40/20 real estate/stocks/cash and I had decided to use the 20% cash for a rental property (not yet identified) deposit not to add to stocks.

Clearly, I would have had a solid gain, had I committed to stocks (except emerging markets), So I have second, third and fourth thoughts but I don't think I really have regrets... I know that I am not capable of optimizing my return and I have to make my decisions without hindsight :-( So I chug along with the belief that over 30+ years, I will get market returns.

Just a thought, would your 30% be in the S&P 500, or bonds or some in international. If the latter, then you didn't miss nearly as much. Again would you have invested the whole 30% or kept some cash?

For my 2011 purchases: Although VB is up 41%, VWO is down 11% and others everything in between so I can truthfully console myself that I would never have gained the S&P500 return anyway :-)
__________________
SVHoper is offline   Reply With Quote
Old 07-11-2013, 10:29 PM   #19
Thinks s/he gets paid by the post
 
Join Date: Jul 2005
Posts: 3,862
I'm about 88% equities and 12% cash. The cash will see me through about the first half of 2014 (with big Roth conversions, that's not all expenses). Another 2.8% portfolio growth and I'm ready to raise cash for the rest of 2014. After that I might be back to 100% equities.
__________________
Animorph is offline   Reply With Quote
Old 07-11-2013, 10:46 PM   #20
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,386
Quote:
Originally Posted by gerntz View Post
Somehow, without making any changes, our gold allocation keeps getting lower.
Not today.

Ha
__________________

__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


 

 
All times are GMT -6. The time now is 05:11 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.