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Old 01-12-2018, 06:27 PM   #21
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I'll admit I've been spooked. Between China rattling sabers about being our banker which is factual. Inflation going up. And just because the ballon can only expand so much.

For the past 18 to 24 months or more I've been about 80% in leveraged ETFs which worked quite well. So now I'm rebalancing in to REITs, oil majors & some emerging markets.

Also have some stop loss orders to trim the leveraged ETFs further if / when the bottom falls out. Worst case they trigger too so then I will be where traditional allocation says. Best case I get more joy on the irrational exuberance train.
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Old 01-12-2018, 06:38 PM   #22
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60s but pensioned out. IMHO it's wrong to lump people together by age whether discussing AA, fear, or greed. FWIW: 92% stock / 8% cash & bonds primarily and I sleep well @ night
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Old 01-12-2018, 06:41 PM   #23
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I have always appreciated the wisdom of Bernard Baruch.

When asked how he got so wealthy, his answer was "I always sold too soon."
And then there's Warren Buffett who's taken a different course, that being buy long and stay the course. I think he's done pretty good as well.
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Old 01-12-2018, 06:42 PM   #24
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Purely a speculative post. The bull has been running strong for nine years. How much longer will the bovine hold up at this current pace ?

I for one am totally clueless but it is fun to watch people who have never seen a serious downturn be so enthusiastic concerning the market today. I'm afraid when the party is over there may be some serious hurt going around.

Heard some friends in their 60 & 70s with 80% in equites bragging about their returns last years and just thought to myself, oh my, my.
I think it's (hilarious? crazy? inexplicable?) that people can be so grim and expect doom at any minute, no matter what the market conditions. Up market? The crash is imminent. Down market? This time it's different, it will never recover.

And yet, people cannot ever be happy and optimistic about the market? Pffft.

Allowing yourself to be happy when good fortune comes your way, is part of being a human being and living a fulfilling life. Well, IMO anyway. Just something to consider. Sound investment decisions are not based on emotion anyway, so feeling happy does no harm to anyone.
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Old 01-12-2018, 06:52 PM   #25
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I've always liked you. Yeah, why not be happy and spend freely in this time of abundance?
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Old 01-12-2018, 07:10 PM   #26
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I've been in the market for 30+ years, I'm 54. My only fear is that DW and I are both looking to RE in next year or 2, and I fear the drop coming immediately after we punch out... sequence of return risk. I'm sure a correction is coming and am fine with it, just worry about it coming at RE. We'd be fine just have to suck it up and live frugally for the first few years if timing bites us in the butt. Few years ago we switched to 70/30, was at 80/20. Planning on staying at 70% equities indefinitely. We plan to mitigate some of the risk by gradual exit from working. I switched to PT, DW retiring next June, draw pension and hopefully get hired back as contract employee. If she does I will be done, if she doesn't go back she is done and I will continue PT for a while. That's my story and I'm sticking with it,,, or not
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Old 01-12-2018, 08:45 PM   #27
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And then there's Warren Buffett who's taken a different course, that being buy long and stay the course. I think he's done pretty good as well.
It’s not like Buffett has never sold “too soon” either though. He sold most of his stocks in the late 60s and looked like a genius five years later.

He doesn’t sell based on trying to guess what the market will do, but he’ll sell when the market has overvalued something and he has better options. He doesn’t exclusively buy and hold.
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Old 01-12-2018, 08:51 PM   #28
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I won't try to call I top....I would have wrongly called it several thousand dow points ago...but I suspect the herd could spook easily.

Particularly if something bad happens to one or more of the FAANG stocks. They've powered a lot of the upside. If they turn hard, the QQQ turns with them which could cause a big panic.

But we could see 30k on the Dow just as easily. Particularly if the big dividend payers use tax gains to bump divvies.

Party on Wayne.

Party on Garth.
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Old 01-12-2018, 09:21 PM   #29
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It’s not like Buffett has never sold “too soon” either though. He sold most of his stocks in the late 60s and looked like a genius five years later.

He doesn’t sell based on trying to guess what the market will do, but he’ll sell when the market has overvalued something and he has better options. He doesn’t exclusively buy and hold.
Indeed, but Buffett doesn't make decisions based on market, he makes decisions based on the soundness of the business including financial and management quality. Got to say Buffett does invest long, just look at how long he's held and further invested in KO (last I knew it was over $16B) and he looks to hold this indefinitely.
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Old 01-12-2018, 09:22 PM   #30
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All my stocks are in my taxable brokerage account. I have a hard time wanting to pull even a partial sell trigger given the tax consequences on my gains. That fact keeps me pretty locked into a buy and hold strategy it seems.
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Old 01-12-2018, 09:24 PM   #31
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I am consumed by greed and fear both. Hoping the Saints make it to the Superbowl!

Meanwhile back at the ranch Vanguard computers re - balance my Target Retirement portfolio without even checking my emotional state - OR even asking my permission.

Heh heh heh - And And the asset balance changes as time ticks on. Of course being male - I have a few good stocks cause football season doesn't last all year.
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Old 01-12-2018, 10:11 PM   #32
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Hoping the Saints make it to the Superbowl!
Has to get by the Vikings first.
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Old 01-12-2018, 10:14 PM   #33
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All my stocks are in my taxable brokerage account. I have a hard time wanting to pull even a partial sell trigger given the tax consequences on my gains. That fact keeps me pretty locked into a buy and hold strategy it seems.
You could sell those that have been held more than a year. The LT capital gain is still at 15%, right?
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Old 01-13-2018, 03:35 AM   #34
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I think it's (hilarious? crazy? inexplicable?) that people can be so grim and expect doom at any minute, no matter what the market conditions. Up market? The crash is imminent. Down market? This time it's different, it will never recover.

And yet, people cannot ever be happy and optimistic about the market? Pffft.

Allowing yourself to be happy when good fortune comes your way, is part of being a human being and living a fulfilling life. Well, IMO anyway. Just something to consider. Sound investment decisions are not based on emotion anyway, so feeling happy does no harm to anyone.
Agree. Well said. I don’t know why people just dont enjoy the ride. In the overall scheme of things it will all work out. Maybe sell a bit, spend a bit more now.. Probably won’t last forever but neither do we.
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Old 01-13-2018, 04:04 AM   #35
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I have seen lots of serious downturns and I'm enthusiastic about the market today.
I am hopeful, but realistic. Over the last 5-6 years I have brought my AA down from the 80's to 60%. If the bull continues I will notch it a little more. As a contrarian, I prefer lots of fear.
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Old 01-13-2018, 04:31 AM   #36
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fear and greed are the two emotions that make the majority of individual investors perform wealth killing mistakes. Personally I have been at this game for a long time and unfortunately heard too many stories about people making predictions about where the market is headed like "the bull market has another year or two run" statements like this are absolute bunk. The tragedy is when folks make investment decisions based on this kind of thought process. A few quotes that are appropriate "nobody knows nothin'" Bogle. "Ignore that last ten years and focus on the long term" Bernstein. One more that I really like is "100% of what you hear on TV and 99% of what you read about the market is worse than worthless" another Bernstein.

---Understand portfolio theory
---Study market history
---Don't let emotions factor into you investment decisions.
---Eliminate as many fees as possible---buy index funds for the bulk of your holdings.

Nothing new here. All I have is my experience and its worked for me for a very long time now. Before that I thought I was smarter than the market.
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Old 01-13-2018, 05:22 AM   #37
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I look at it just like flipping a coin. The chances of the market tanking in 2018 is the same as it was 9 years ago. I see no evidence that any given year is related to the previous one. I set my course and I stay the course. I'm 65 and 75% equities. Would brag about last years returns? Sure. Would I bitch if we had a major correction? Absolutely. I'm human. Would I change my plan because I was afraid of losing some money? Not a chance!

If I listened to some of the pundits, I would have been out of the market 2 years ago. Where would that have put me?

Now, adjusting AA for age is a different story. Even though I am 65, I still are planning for >30 years out. Not ready to change AA just yet. But someday.....
Market probabilities are definitely not the same as flipping a coin.
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Old 01-13-2018, 05:24 AM   #38
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I'm fearful of others' greed.
Yep!
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Old 01-13-2018, 06:23 AM   #39
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One theory says that with the tax-cuts most companies get an immediate bump in earnings that will drive the P/E ratio into more normal territory, thus giving room for more price gains.

Maybe. Maybe not.
More than just a theory, really...

"Analysts and executives expect corporate earnings to be boosted by an average of about 10 per cent, with some companies set to see significantly higher benefits of up to 30 per cent,..."

"US companies set to be big winners from Trump’s tax reform"

That'll adjust your P/E ratio right quick!

(also, Shiller is a permabear)
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Old 01-13-2018, 06:35 AM   #40
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Just curious, is there any information that shows that a lower equity/higher bond (say 50/50) allocation does better in an environment with increasing interest rates (which is what is expected in the next year) and higher inflation than a higher equity/lower bond allocation (say 80/20)? And does that comparison show the difference in value and return over a 1, 3 and 5 year period? I just look back and 2006-2008 and what bonds did, many dropped in value much more than many stocks and even the S&P500.

With view that Fed will be imposing further rate increases this year bonds too, unless they are adjustable, will lose value. Toss in inflation and that's a double whammy for bonds.
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