Glad I have cash and stable value

[nun]

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.

 

[robnplunder]

A correction was long overdue in my opinion. Corrections are not a bad thing .

 

[jollystomper]

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.

+1

Along with an AA that one can sleep with at night, it makes it easier to ride these things out.

 

[W2R]

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.

I have more years than that in cash and TSP G Fund, although rubbing it in while people are losing money is a little distasteful somehow. I would imagine that you feel the same.

I know this conservative AA is one that I can stick with no matter what, since it was well tested in 2008-2009. I probably didn't make as much from 2010-2013 as I could have.

 

[MichaelB]

I sleep pretty well regardless . This still looks to me like run of the mill volatility, nothing to write home about. If anything, holding cash right now is unsettling, because it's not obvious when and how to invest it.

 

[Midpack]

I sleep pretty well regardless . This still looks to me like run of the mill volatility, nothing to write home about. If anything, holding cash right now is unsettling, because it's not obvious when and how to invest it.

+1. How soon some forget how well we did last year. If you were mostly cash going back a year or more, you're way worse off than most any balanced AA. YMMV

 

[robnplunder]

... and there are 11 more months to go before the year ends. At the end of the year, most are predicting that the equity will be up. My opinion is, it will be up albeit in single digit range.

 

[Louis2]

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.

And i say... Amen.

(of course you could argue the original title was designed to get everyone riled up!)

 

[nun]

I have more years than that in cash and TSP G Fund, although rubbing it in while people are losing money is a little distasteful somehow. I would imagine that you feel the same.

I know this conservative AA is one that I can stick with no matter what, since it was well tested in 2008-2009. I probably didn't make as much from 2010-2013 as I could have.

Well my 60/40 AA means that I'm losing money overall.....I've just got 7 years of myopia.

 

[REWahoo]

(of course you could argue the original title was designed to get everyone riled up!)

...which is always what happens when the market has a drop. The "I told you so" crowd come out of the woodwork like cockroaches with the lights off.

 

[Newventurer]

+1. How soon some forget how well we did last year. If you were mostly cash going back a year or more, you're way worse off than most any balanced AA. YMMV

I am one of these. Sadly, I 'knew' the market was going to crash and shorted the S&P all year (2013) with a portion of my investments and held a lot of cash because i was fearful of the 'big one' right before i retired. I was wrong. Sure I am finally getting back a bit of what I left on the table but at significant opportunity (educational) expense. Soon I will re-enter the market at more reasonable levels, into a ETF strategy developed with knowledge from this board. Painful lesson, but not too late to recover.

Thanks to all of you who have imparted your knowledge to the uneducated.

 

[frayne]

Been investing since 1974, just another day in the market. Soon the talking heads will find some way to link the Bronco's loss yesterday to the sell-off today. Does reversion to the mean, ring a bell anyone ? Yes, those in marginal situations might want to be concerned but in the over all scheme of things, it's no big deal what the market is doing. After last year's run, I'd be surprised if there wasn't a bit of profit taking.

 

[shasta]

First year FIRE for me.

Im 70/25/5.

This doesn't even make me flinch.....

Cheers everyone!

 

[foxfirev5]

First year FIRE for me.

Im 70/25/5.

This doesn't even make me flinch.....

Cheers everyone!

I hope there's a pension to compliment this AA

 

[Katsmeow]

Because we will have high spending the next 3 years kids (2 kids in college) and will be withdrawing a relatively higher percentage of our portfolio (and then our spending will basically halve at that point) we set aside part of our 55/45 portfolio shortly after the beginning of the year (before the drop) and put it in cash or near cash so that we would be less vulnerable to a large drop in the next 2 years. I don't have any reason to think this "correction" will be such a large drop, but I definitely do feel better with having done the set aside.

 

[shasta]

I hope there's a pension to compliment this AA

Why is that? (Don't think I'm looking a concern horse in the mouth.)

Firecalc gives me 96%

Vanguard gave me 100% success with my AA.

 

[Midpack]

First year FIRE for me.

Im 70/25/5.

This doesn't even make me flinch.....

Cheers everyone

I hope there's a pension to compliment this AA

foxfire: Why would your risk tolerance be appropriate/suitable for anyone else, especially a total stranger (presumably)?

 

[jollystomper]

Soon the talking heads will find some way to link the Bronco's loss yesterday to the sell-off today.

They actually did a few days ago - the old Super Bowl "indicator"
Super Bowl Indicator: Why a Broncos win will be better for stocks | Breakout - Yahoo Finance

"...the Super Bowl theory, which unequivocally has shown that when an NFC team wins, the S&P 500 has rallied an average of 10% in the ensuing 11 months and was positive 80% of the time, which is more than double the 4% gains that follow an AFC victory"

"...Specifically, following the Bronco’s last four Super Bowl losses, the market averaged gains of only two percent"

 

[stepford]

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.

 

[eytonxav]

This isn't even a correction yet and most would consider a correction healthy anyway. These can be buying opportunities for those with cash.

 

[audreyh1]

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!

 

[ziggy29]

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.

 

[audreyh1]

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.

 

[Midpack]

+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...

 

[audreyh1]

+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.