Are you kicking yourself now?

[Spanky]

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.

 

[mickeyd]

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.

 

[FIREd]

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.

 

[traineeinvestor]

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.

 

[Bestwifeever]

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.

 

[foxfirev5]

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.

 

[pb4uski]

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.

 

[IBWino]

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.

 

[Spanky]

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 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!

 

[yakers]

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.

 

[aja8888]

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.

 

[W2R]

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.

 

[roger r]

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.

 

[gerntz]

Somehow, without making any changes, our gold allocation keeps getting lower.

 

[calmloki]

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!

 

[sheehs1]

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.

 

[ejman]

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.

 

[SVHoper]

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

 

[Animorph]

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.

 

[haha]

Somehow, without making any changes, our gold allocation keeps getting lower.

Not today.

Ha

 

[comicbookgujy]

I'm 60% stocks, 10% bonds, and 30% Short Term Bonds/Cash.

I'm not kicking myself with making 1% on my other 40%. I sleep better because when the market goes down 5% in a week, I don't care since I can think "if It keeps going down... I have lots of cash to get in." If it keeps going up...I 'm happy with the 60% in stock

 

[jollystomper]

Not kicking myself with roughly 21% in cash. This is my 10 year near term expenses and ER SWR buffer. I'm satisfied with the net gains for the rest of the portfolio (bonds slghtly down but offset by equity gains). As others have said, I can sleep fine my AA and keeping things balanced. Beware the "coulda-woulda-shoulda" syndrome of looking back.

 

[Onward]

Nothing wrong with being in cash if that's what your AA calls for.

There is a lot wrong with being in cash because you think the market will drop.

 

[gauss]

Nothing wrong with being in cash if that's what your AA calls for.

There is a lot wrong with being in cash because you think the market will drop.

+1

Psychologically speaking:

• Easy to try to time the market by selling equities and going to cash.
• Not so see easy, on the other hand, to reverse the transaction.

-gauss

 

[pb4uski]

+1

Psychologically speaking:

• Easy to try to time the market by selling equities and going to cash.
• Not so see easy, on the other hand, to reverse the transaction.

-gauss

And that is the power of deciding an AA and sticking to it - it helps/forces you to do that reversal transaction when you should.