Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 03-04-2012, 02:26 AM   #61
Thinks s/he gets paid by the post
obgyn65's Avatar
 
Join Date: Sep 2010
Location: midwestern city
Posts: 4,061
This is my view also. The next big crisis will be currency devaluation.
Quote:
Originally Posted by sengsational View Post
But I don't think it will involve civil unrest, just that the way the points are tallied (ie currencies) might change. To those that don't have many points, it won't make a difference, but to those of us that do, well, could be a surprise.
__________________

__________________
Very conservative with investments. Not ER'd yet, 48 years old. Please do not take anything I write or imply as legal, financial or medical advice directed to you. Contact your own financial advisor, healthcare provider, or attorney for financial, medical and legal advice.
obgyn65 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 03-04-2012, 02:28 PM   #62
Moderator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Rocky Inlets
Posts: 24,424
We are off track, as this thread is about equity allocation.

My feeling is the higher the allocation, the more important it is to diversify the equity. That is probably easier and less expensive now than any time over the past century.
__________________

__________________
MichaelB is offline   Reply With Quote
Old 03-04-2012, 02:39 PM   #63
Administrator
Gumby's Avatar
 
Join Date: Apr 2006
Posts: 10,137
I've started a new thread and moved the currency related posts there. Please carry on with the equity allocation discussion.
__________________
Living an analog life in the Digital Age.
Gumby is online now   Reply With Quote
Old 03-04-2012, 05:04 PM   #64
Dryer sheet wannabe
 
Join Date: May 2010
Posts: 23
The high frequency traders scare the crap out of me. My fear is they greatly increase the likelihood of black swan events. As such, my portfolio is heavily hedged. (ie: the best way to make money is to not lose it)

I'm in my 30s. 60% bond allocation, 25% equities, 15% options. Leverage ratio slightly above 1. We'll see how this works .
__________________
eatingmywords is offline   Reply With Quote
Old 03-04-2012, 05:27 PM   #65
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
I am 38 and working with 60-something percent equity. Much of the rest is bonds, but most of the bonds are in the form of bank loan funds (junky) and straight out individual junk bonds, so my FI has a hefty flavor of equity. I have even stopped buying junk and will slowly allow cash to pile up awaiting better opportunities.
__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Old 03-04-2012, 07:18 PM   #66
Full time employment: Posting here.
ESRwannabe's Avatar
 
Join Date: Mar 2010
Posts: 629
I still have possibly 25 years to go before I retire (I'm 35), but I will probably be around 70% to 80% in stocks, as I am now. Theoretically I will have social security and pension money. If you factor that in, then the asset allocation would probably look very conservative.

But who knows what will happen in 25 years, or if I will even live that long. It is pointless to give it much thought.
__________________
ESRwannabe is offline   Reply With Quote
Old 03-05-2012, 03:11 PM   #67
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Nov 2007
Posts: 7,526
100% equities and still 4-5 years from FI (I'm 31 now). I'll probably keep piling up the money till I get enough to have a roughly 3%ish withdrawal rate and enough fat in the budget to cut if the equities get hit really hard.

At a 3% withdrawal rate, I can just about meet that with dividend yield from a broadly diversified equity portfolio (yield was 2.7-2.8%ish last year). I tentatively plan to remain roughly 100% equities in ER assuming the dividends will mostly cover my expenses. Odds are I will actually carve out a few percent allocation to cash or very short term bonds just as a safety net initially to cover shortfalls in dividend payments or lumpy expenses. Probably 5% max of my portfolio and I'll probably not keep track of it in my portfolio allocations - just call it "cash in my checking account".

I don't really see the value from bonds today since I can get a similar yield from investments plus the high probability of future growth of earnings and hence dividends. Since I am planning on a 5-6 decade retirement, inflation is my biggest enemy, not volatility. The idea is that equities growth over time will lead to a rising stream of dividends (in real terms).

Perhaps some day the bond yield or yield on CD's or cash will get back to the point where it is high enough to justify fixed income investments for me. But I can't bear to invest in something that I expect to lose to inflation every year when I know there are alternatives that have real earnings (at an admittedly much higher volatility of principle).
__________________
Retired in 2013 at age 33. Keeping busy reading, blogging, relaxing, gaming, and enjoying the outdoors with my wife and 3 kids (5, 11, and 12).
FUEGO is offline   Reply With Quote
Old 03-05-2012, 03:38 PM   #68
Thinks s/he gets paid by the post
 
Join Date: Feb 2011
Posts: 1,629
VERY interesting article in today's Wall St Journal re Bill Bengen, author of the "4% Rule" & practicing financial planner. Article outlines a "representative" portfolio for 60yo client. This model portfolio only includes 32% stocks, along with 60% bonds/cash & 8% gold. It appears the 4% Guru would not agree with 100% stock allocation1?!!!
__________________
ERhoosier is offline   Reply With Quote
Old 03-05-2012, 03:53 PM   #69
Thinks s/he gets paid by the post
 
Join Date: Dec 2009
Location: Alberta/Ontario/ Arizona
Posts: 3,127
Quote:
Originally Posted by ERhoosier View Post
VERY interesting article in today's Wall St Journal re Bill Bengen, author of the "4% Rule" & practicing financial planner. Article outlines a "representative" portfolio for 60yo client. This model portfolio only includes 32% stocks, along with 60% bonds/cash & 8% gold. It appears the 4% Guru would not agree with 100% stock allocation1?!!!
maybe not but he may not have a pension either. He said in one article that the " real" number was more like 4.5%
__________________
Danmar is offline   Reply With Quote
Old 03-05-2012, 09:17 PM   #70
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Ed_The_Gypsy's Avatar
 
Join Date: Dec 2004
Location: the City of Subdued Excitement
Posts: 5,292
+1 What he said.
Quote:
Originally Posted by FUEGO View Post
100% equities and still 4-5 years from FI (I'm 31 now). I'll probably keep piling up the money till I get enough to have a roughly 3%ish withdrawal rate and enough fat in the budget to cut if the equities get hit really hard.

At a 3% withdrawal rate, I can just about meet that with dividend yield from a broadly diversified equity portfolio (yield was 2.7-2.8%ish last year). I tentatively plan to remain roughly 100% equities in ER assuming the dividends will mostly cover my expenses. Odds are I will actually carve out a few percent allocation to cash or very short term bonds just as a safety net initially to cover shortfalls in dividend payments or lumpy expenses. Probably 5% max of my portfolio and I'll probably not keep track of it in my portfolio allocations - just call it "cash in my checking account".

I don't really see the value from bonds today since I can get a similar yield from investments plus the high probability of future growth of earnings and hence dividends. Since I am planning on a 5-6 decade retirement, inflation is my biggest enemy, not volatility. The idea is that equities growth over time will lead to a rising stream of dividends (in real terms).

Perhaps some day the bond yield or yield on CD's or cash will get back to the point where it is high enough to justify fixed income investments for me. But I can't bear to invest in something that I expect to lose to inflation every year when I know there are alternatives that have real earnings (at an admittedly much higher volatility of principle).
__________________
my bumpersticker:
"I am not in a hurry.
I am retired.
And I don't care how big your truck is."
Ed_The_Gypsy is offline   Reply With Quote
Old 03-06-2012, 12:31 PM   #71
Dryer sheet aficionado
 
Join Date: Feb 2011
Location: Colorado mountains
Posts: 31
Well, I'm the opposite, I'm 54 and got completely out of the market a few months back. I have $2 million in various retirement savings, and can average 4% return with muni bonds, guaranteed funds through 401 k accounts etc. That's $80 K per year. My wife gets a $60K per year pension, and we can easily live off $100K per year pre tax.

So, we make $40 K more than we need every year, which stays in the funds to offset inflation.

Why would I want to be involved in the uncertainty of the stock market? I never really understood it anyway, I felt like a gambler more than an investor...
__________________
pinejake is offline   Reply With Quote
Old 03-06-2012, 02:50 PM   #72
Thinks s/he gets paid by the post
 
Join Date: May 2008
Posts: 3,420
So that you can make more and live large!

Or have more money to leave to heirs!
__________________
explanade is offline   Reply With Quote
Old 03-06-2012, 02:55 PM   #73
Thinks s/he gets paid by the post
 
Join Date: Nov 2011
Posts: 2,357
If all of us went 100% stocks, it would drive up their prices, particularly if we all bought the same stock, so we'd all be happily FIREd. Just let me know which stock before y'all decide to pile in. :-)
__________________
GrayHare is online now   Reply With Quote
Old 03-06-2012, 03:34 PM   #74
gone traveling
 
Join Date: Apr 2009
Location: Eastern PA
Posts: 3,851
Just to add a reference article to the thread subject, for those that wish to read further on retirement equity holdings, and the reasons why one may wish to hold more/less than is suggested by looking at your "expanded portfolio":

http://www.austinlemoine.com/documents/File36.pdf

While DW/me were in our accumulation years - some 25 years of investing, we kept just over 90% in equities with the remainder in bonds. Cash was only held if it was within a fund. We felt comfortable with a high equity exposure for the simple fact that we did not live on our portfolio, but had two paychecks. Additionally, we didn't start investing for retirement till the age of 34, when our respective pensions (defined benefit) plans were eliminated and replaced with the 401(k) along with starting our respecive IRA's. We took the risk for our future.

Being retired (me 5 years, DW later this month) we went to a 60/40 (equity/bond-cash) mix about three years before I retired and stayed at that level until two years ago, when we went 50/50.

100% equity in retirement? No, we're not that brave ....
__________________
rescueme is offline   Reply With Quote
Old 03-06-2012, 05:00 PM   #75
Dryer sheet aficionado
 
Join Date: Feb 2011
Location: Colorado mountains
Posts: 31
Quote:
Originally Posted by explanade View Post
So that you can make more and live large!

Or have more money to leave to heirs!
Thanks, I knew I was missing something!
__________________
pinejake is offline   Reply With Quote
Old 03-06-2012, 05:14 PM   #76
Thinks s/he gets paid by the post
 
Join Date: Mar 2007
Posts: 3,323
Used Vanguard's free CFP department today for the first time to see what they say, and it is (for my age 67) a 60% bond/40% stock portfolio. Since I have 23% now in bonds and the rest in stocks she didn't like it, but did admit that Vanguard is a more risk management company, hence, she thought it was too risky.
I'm using just 2% of the portfolio a year, but the way the CFP acted was if there was another crash I wouldn't be eating. Interesting reaction from Vanguard--not that I enjoyed seeing my portfolio crash in 2008 at all.
Just throwing that in FYI.
__________________
Please consider adopting a rescue animal. So very many need a furr-ever home and someone to love them! And if we all spay/neuter our pets there won't be an overpopulation to put to death.
Orchidflower is offline   Reply With Quote
Old 03-06-2012, 05:18 PM   #77
Moderator Emeritus
Bestwifeever's Avatar
 
Join Date: Sep 2007
Posts: 16,373
OF, you should do what some of these people here have done--follow the safe AA for your age for the majority of your portfolio, and then for 10 percent or so, go crazy and risk it in whatever you're studying up on. We'll call it the Orchid Portfolio .
__________________
“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 03-06-2012, 05:26 PM   #78
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas Hill Country
Posts: 42,078
Quote:
Originally Posted by Bestwifeever View Post
OF, you should do what some of these people here have done--follow the safe AA for your age for the majority of your portfolio, and then for 10 percent or so, go crazy and risk it in whatever you're studying up on. We'll call it the Orchid Portfolio .
+1

Unclemick calls the ~10% of his portfolio he actively manages his "testosterone stocks". Maybe you'd prefer to use the term "estrogen stocks", but whatever you call them, the strategy of not betting the farm with anything more than 10% of your portfolio makes a lot of sense. Good entertainment value with far less opportunity for a gut-wrenching outcome.
__________________
Numbers is hard

When I hit 70, it hit back

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Old 03-07-2012, 01:02 AM   #79
Full time employment: Posting here.
 
Join Date: Nov 2010
Posts: 583
I am very close to retiring, but not quite there yet. I am 85% equity, 15% cash in savings or short CDs. I was 100% a few months ago. Yes, I do have a pension and Soc Sec to draw on and it is equal to a 50% sinking annuity without an inflation rider..
__________________
devans0 is offline   Reply With Quote
Old 03-07-2012, 01:28 AM   #80
Thinks s/he gets paid by the post
Onward's Avatar
 
Join Date: Jul 2009
Posts: 1,664
I never got the "set aside 10% for stock picking" idea. Either you believe you can beat the market, or you don't. If you truly believe it, you would want to dedicate much more than 10% to this superior strategy. If you don't believe you can beat the market, why would you risk any money on a lost cause?

I understand the testosterone thing, but why not find some other, cheaper, way to indulge it?
__________________

__________________
And if I claim to be a wise man, it surely means that I don't know.
Onward 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


Similar Threads
Thread Thread Starter Forum Replies Last Post
Expats in Mexico: is this accurate? Onward Life after FIRE 88 03-24-2012 07:41 PM
Rear view monitor in new cars required by 2014? easysurfer Other topics 64 03-03-2012 12:40 PM
Things do even out in the end easysurfer Other topics 10 03-03-2012 01:26 AM
Polyp in Uterus???? Need some help with this one, please! Orchidflower Health and Early Retirement 18 03-02-2012 06:15 PM
Health Insurance Suggestion - self insure vs. HI, not in the US. landover Health and Early Retirement 0 03-02-2012 01:21 PM

 

 
All times are GMT -6. The time now is 07:56 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.