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Old 04-03-2014, 07:27 PM   #81
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I've allowed my stock allocation to go up 8% with the market in 2013, rather than rebalancing. (The recent adjustment took it back to 6% so I'm waiting to sell or allow the market to take it back down.)
Over more than two years I've steadily but gradually moved the durations down, rebalanced gains (made monthly contributions) to the Fidelity Floating Rate fund and considerably less to a high yield fund, and bought muni Closed End Funds. A
Also have made monthly contributions to foreign currency fund, a corporate bond fund, and put some money (not a lot) in emerging market bond fund, and a small allocation to Convertible fund. And let cash build up when harvesting gains. The emerging market bond looks more attractive after the recent EM selling.

61-21-17 now.
I give myself 10% wiggle room (minimum to maximum band) in a category based on my sense of comparative value. Considering the tax issue, munis seem a comparative bargain still, even after the recent climb.
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Fear of bonds
Old 04-04-2014, 02:37 AM   #82
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Fear of bonds

I have about 28% of my portfolio in an SV account (cash) which became available for rollover last year. The original intent was to roll it over into bonds, which would give me a 60s/40b AA. The SV earns the same, roughly, as the ten year treasury. With the uncertainty of bonds, I've held off putting that new money into bonds. Same income, no loss of principle. If there comes a buying opportunity in bonds, I'll take it.

I'm basically a Boglehead, but use a bit of flexibility. When equities dropped in January a bit, I waited until February to take an annual withdrawal. Call it market timing *shrug*. I call my SV account 'fixed income in lieu of bonds' and it functions essentially the same as bonds in the current market. I don't see being totally locked in to bonds, but won't sell the old ones. They've performed their function over the years.
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Old 04-04-2014, 07:10 AM   #83
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No need to worry. I can GUARANTEE you the stock market bubble will come. Eventually. And the market will go down a lot. And then it will come back. And then it will go down again. Rinse and repeat. So if you're worried that it might happen, don't bother. It will. I promise.
+1 Very well said!

When I was in my accountants office recently we happened to get into a discussion of 401Ks, retirement and withdrawal rates. I told him and his assistant that I planned for a 20% drop when calculating how much to take out. His assistant seemed surprised thinking of such a large drop. I told them I hoped I would live long enough to see a lot of 20% plus declines. His assistant's jaw dropped. I guess she didn't realize what I meant. Not that I enjoyed the inevitable bear markets, just that I hoped to live a long time.
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Old 04-04-2014, 07:20 AM   #84
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Hi, just quick response. Interest Rates (IR) will not stay low for ever, with QE Infinity tapering off (more after election), IR will go higher Bond Funds down. Bonds, buy hold, USG Bonds, until maturity = no loss. Wait until about 2015-6 (best after Pres. election), then buy actual USG bonds (safest) at about 4-6%.
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Fear of bonds
Old 04-04-2014, 08:27 AM   #85
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Fear of bonds

Wave - You're saying nothing new, but while everyone suspects yields will rise due to interest rate increase, no one know how much or how quickly the yield will rise. I'm highly dubious of a 4 to 6 percent yield, but it's possible. I don't think the Fed will raise rates that quickly. But, if they do, I'm ready. Lol
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Old 04-04-2014, 08:46 AM   #86
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Yes, nothing new said except the IR forecast. Fed does not control IR market does. Fed is market follower. Time - when, is the hardest to forecast (2016?). I'll stick with 4-6% forecast though.
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