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Old 02-03-2014, 05:13 PM   #21
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The 5yr treasury interest rate is already back down to 1.44%. I'm glad I bought a chunk of 3% CDs when I could!

The rest of it - 6% "correction"* so far and volatility is back to 2012 like levels.

Bond funds are quite happy YTD!

* not technically a correction until it drops 10% from a recent high, but we are 60% there already!
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Old 02-03-2014, 05:16 PM   #22
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I didn't interpret the OP as recommending a high cash AA or even saying they moved into cash.... I think they were just reinforcing that regardless of your AA strategy, as you approach retirement it is comforting to have enough in cash/sv to withstand the volatility.
I can see that to a degree, yeah. But I remember what this place looked like in late 2008 and early 2009. There was a lot of "spiking the ball" going on among those who either "got out in time" or who were never in. (Admittedly, before that time some folks derided them as evil market timers or doom mongers, but still....)

If we made the right moves I think we can feel good about what we have done without publishing our schadenfreude for all to see.
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Old 02-03-2014, 05:25 PM   #23
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A correction was long overdue in my opinion. Corrections are not a bad thing .
+1

I'm just glad it's happening after my Jan 1 withdrawal and rebalance.

And volatility was eerily low in 2013. This seems like going back to more "normal" market volatility.
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Old 02-03-2014, 05:29 PM   #24
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+1

I'm just glad it's happening after my Jan 1 withdrawal and rebalance.
+2. I was just thinking the same, very happy about what I sold off in late Dec while rebalancing. Funny how well that works in the long run...
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Old 02-03-2014, 05:35 PM   #25
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+2. I was just thinking the same, very happy about what I sold off in late Dec while rebalancing. Funny how well that works in the long run...
First week of January is often positive in the equity markets it seems, as that's when new money enters the market plus the usual seasonal "Santa Claus" rally.

So rebalancing in the first week of Jan after a strong equity year, often works out well.

After a poor equity year? It sometimes pays a little to wait until mid Jan after that first week settles out to buy more stocks, if you don't mind the timing.
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Old 02-03-2014, 06:12 PM   #26
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I did my annual rebalancing last year on December 9th by selling some Vanguard index funds and moving the money into bonds. I was thinking this turned out to be a great move, now that the market has dropped 6% in the past month. However, when I went back and looked at what I sold the stocks for on December 9th, here were the closing prices:

VTSAX $45.78
VTIAX $27.61

And here are the closing prices today:

VTSAX $44.14
VTIAX $26.23

A drop in price of 3.6% and 5%. So the drop is not quite as big as I would have thought, because there was a significant run up in just the last few weeks of December. So I suspect that we really only lost about the last month of gains in the market, and are still up all the gains we saw through November of last year.

For some reason it always seems a lot worse when looking at the Dow Jones numbers and reading all the news reports.
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Old 02-03-2014, 06:14 PM   #27
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I know we're supposed to avoid market timing, but I couldn't resist and threw a few $K into QQQ at COB today. We'll see if I seem brilliant or idiotic in a few days.
... or in few months or in few years.
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Old 02-03-2014, 06:32 PM   #28
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Only one month from ER and I'm remarkably sanguine about this correction thanks to having 7 years of spending in stable value and cash.
That you feel the need to tell us how sanguine you are makes me think your more smug & an need of affirmation than anything else. But jmo.
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Glad I have cash and stable value
Old 02-03-2014, 06:42 PM   #29
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Glad I have cash and stable value

I don't know. It seems like sound defensive planning to me. I've slowly been building up my stable value fund and am glad it's there.
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Old 02-03-2014, 06:57 PM   #30
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I don't have 7 years worth but maybe 3.4 years. That should be good I think. (hope) [pray] Accckkkkkk
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Old 02-03-2014, 07:27 PM   #31
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This isn't even a correction yet and most would consider a correction healthy anyway. These can be buying opportunities for those with cash.
i agree - not even a correction yet. My 401k is down 2.5% from its all time high. Weird thing is that I rebalanced in late November, putting 40% in an income fund. Today's pct in the income fund is 39.86%. I put 10% in a growth fund when I rebalanced. Now I have 10.17% in the growth fund. So it looks like growth stocks have outperformed income funds since late November to include the recent downturn.

I also kept a bunch of taxable in cash in November because I felt the market was too high. Now we have lower prices, but I'm still scared to pull the trigger.
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Old 02-03-2014, 08:50 PM   #32
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I'm having fun with multiple Roth conversions as my initial conversions drop below 90% of their conversion cost. I still have some conversion accounts that are all cash and I can buy shares that are down quite a bit. Lots of emerging market stuff is going in now. I hope my shares last until March or April when I recharacterize, wait 30 days, and get a chance to recycle the shares I converted last year.
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Old 02-03-2014, 08:57 PM   #33
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I dont rebalance till august (pops popcorn)
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Old 02-03-2014, 09:43 PM   #34
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Correction or not...Thank God for pensions!!!
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Old 02-03-2014, 10:07 PM   #35
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Correction or not...Thank God for pensions!!!
+1....I feel very fortunate. I'm leaving my TSP in the 2020 fund.....trying my best not to move it to the G.
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Old 02-03-2014, 11:03 PM   #36
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I don't know what's going to happen, but my AA was a little off and I had been redirecting new money to equities. I just made it happen a little faster. I also lost a couple of percentage points on the new purchases already - but that's offset by the difference between the non-existent interest and the new dividends I will receive now. It's days like this that make OMY syndrome feel a little more rational.
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Old 02-04-2014, 01:13 AM   #37
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I've been following this forum for over a year, and am a bit surprised at some of the responses to the OP's post. I thought a consistent philosophy here was to ensure you have adequate liquidity or buffer in times like this.
(Either for paying bills until the market pops up, or using the funds to buy low.)

At any rate, I applaud OP for the cushion and glad we have also set aside some buffer--not that much, more like 5 years. (Sure glad we took most of a VG Index 500 and paid off the mortgage a month ago.)
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Old 02-04-2014, 08:00 AM   #38
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Yes, we believe in a cushion. But with 47% fixed income (which includes bond funds) we have oodles of cushion in the retirement portfolio. Over 20 years expenses by my last calculation!
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Old 02-04-2014, 08:29 AM   #39
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There's a correction going on?
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Old 02-04-2014, 08:42 AM   #40
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There's a correction going on?
Yeah, we're all the way back to where we were in Oct 2013!!!
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