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Old 03-16-2017, 04:35 AM   #21
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I have mastered the art of doing nothing. I chose an asset allocation long ago. Since then, when I get my paycheck every two weeks, I buy more assets (mostly balanced domestic funds, international index funds, and REIT index funds). I do this rain or shine, in up and down markets. And I rely on the graph posted by exnavynuke. In early 2009, I was down over 50% from my 2007 portfolio peak. Now I have over twice what I did at that 2007 peak. When I retire in about two years, I won't be buying more, but I think I'll continue to do nothing.
Wise counsel.... aka, slow and steady wins the race.
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Old 03-16-2017, 06:59 AM   #22
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You have $700K in assets and a $1,500 swing freaked you out? You need to stop looking at your portfolio. Look at it once or twice a year to see if you need to rebalance; otherwise, set up automatic investing and leave it alone. Your AA should be such to match your risk tolerance and timeline....


I usually update my totals monthly; however, in 2008, I didn't look once. I knew what the market was doing, changed my auto-investing to 100% stock funds, and kept buying on the way down. Kept it that way through most of 2009 until my AA was more or less in the right range, and then started splitting it up again. I didn't start doing monthly checks again until 2010.


I was 90/10 in 2007/2008. Today I am about 77/23, slowing working to 75/25, as my time frame to retirement is now less than 10 years.
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Old 03-16-2017, 07:18 AM   #23
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I bought my first stock when I was 19 so I've been through ups and downs. Some of the dips that seemed catastrophic look like a tiny blip now- similar to the chart posted earlier. The 2008/2009 mess hurt because the pile was pretty big and large amounts evaporated (only on paper), but I was also putting new money in, which helped the recovery. The next one will be scarier because I'm retired, but I have enough non-investment income (SS Widow's benefits plus $1,800/month in non-COLA pensions) to pay for my needs and a few wants, so I can cut back some on withdrawals in bad years. I also periodically go through the portfolio and re-balance if necessary and weed out the poor performers. It's been my experience that the crappy investments are the ones that never recover after a drop.

I've never tried to time the market. Even the experts get it wrong. The ones who get it right tend to get it right only once and never make a genius prediction like that again. (Remember Elaine Garzarelli?)
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Old 03-16-2017, 07:35 AM   #24
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I have mastered the art of doing nothing. I chose an asset allocation long ago. Since then, when I get my paycheck every two weeks, I buy more assets (mostly balanced domestic funds, international index funds, and REIT index funds). I do this rain or shine, in up and down markets. And I rely on the graph posted by exnavynuke. In early 2009, I was down over 50% from my 2007 portfolio peak. Now I have over twice what I did at that 2007 peak. When I retire in about two years, I won't be buying more, but I think I'll continue to do nothing.
This is pretty much how I roll also. Rain or shine, AA has been the same for 35 years, steady and consistent.
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Old 03-16-2017, 07:51 AM   #25
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P.S. Also aware that I added VTI and BND when valuations are quite high, though I don't know if we're near a market top or not.

Does anyone have any historical charts or data on how investors fare when they jump into the market right before a major crash with a stocks + bonds mix?
Yes, referenced ad infinitum on these threads - firecalc.com

Enter your numbers, set the desired success rate to 100%. That shows what historically succeeded at the very worst historical times, which is the period starting right at a market top, followed by long periods of bad times (combo of inflation and low returns)

You only need $9,120 annual from your $700,000 portfolio? That is a 1.3% withdraw rate, that is safer than safe, there's likely very very few people on this forum with that low of a WR. Geez, a 50/50 of just your $400,000 will kick of ~ 2.4% in divs, that's more than enough ($9,600), and it ignores your $270,000!

For ref, a 75/25 AA will survive historically 100% for over 45 years at ~ 3.2% WR. You are less than half that WR!

You should NEVER need to touch principal, you are in fantastic shape.


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You have $700K in assets and a $1,500 swing freaked you out? ....
Really, based on the numbers, OP just needs to get over it! If they really can't, they need help of some kind. I'd first suggest just getting a grip on the numbers, and realize that likely 99.99% of posters here, and 99.999999% of the general population would trade places with you financially in a heart beat! If getting a grip on the numbers doesn't help, maybe some sort of mental health review is in order - and I'm not joking, there could be some sort of mental disorder to be concerned about a $1500 drop with this sort of financial situation. And to be trading stocks, when there is absolutely no need to even attempt (and very likely fail) to 'goose' the portfolio. What are you thinking?

You are GOLDEN. Stop fretting. Set up buy & hold, have those divs auto-deposited to your checking, and get on with your life.

I was going to suggest dollar cost averaging, to avoid the psychology of putting it all in at a high, but there is no need. Get it invested and collect those divs, and ignore the principal - even at a 50% drop (extremely unlikely with a 50/50 AA) you are OK.

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Old 03-17-2017, 06:25 AM   #26
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Well, I veered a bit off course...
An event having nothing to do with stocks shook me to the core. No excuses, but the urge to gamble came,...my brain saying "put $$ in VFH and JDST", easy bucks! Didn't work out that way. Lost about $1500 ....
Don't think of it as a loss, rather categorize that $1500 as "education expense".
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Old 03-17-2017, 06:38 AM   #27
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The ~$1500 was a substantial loss of the chosen investment. Folks can take a look at a chart of JDST. It only lost 33% or so in less than a few minutes. So though there wasn't much invested in it, the percentage loss is substantial.

Since tax-efficiency was sort of mentioned, holding BND in a taxable account is not wise because of the taxes one would pay.
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Old 03-17-2017, 07:58 PM   #28
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I used to look at it quite frequently.

At retirement, we turned it over to an advisor. Now I review it quarterly. In November we do a tax preparation review. So far so good. Pleased with the service, the advice, and the results.
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Old 03-18-2017, 12:25 PM   #29
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What does your advisor charge?
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Old 03-19-2017, 08:07 AM   #30
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PHN. Just under one percent. They have a sliding scale. They have several offerings. We went for the complete management option.

Very pleased with the service, the team we deal with, and the results. PHN was purchased by RBC a few years ago but the players are the same. If anything,we have a broader selection of opportunities.
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Old 03-19-2017, 10:16 AM   #31
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How do you guys keep from market timing or panicking when things go south?

The longer you are in the market, you just get used to the bumps and grinds.

The bumps are much more enjoyable than the grinds but remember what Bogle said and you can't go wrong "stay the course."
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Old 03-19-2017, 01:07 PM   #32
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Hate to say this, the biggest factor for staying the course was losing 50% in market value and being paralyzed do do anything about it (dropped enough that I didn't want to realize a loss). Actually, it was the recovery that followed was the real factor, where I ended up with over a 100% gain over my starting point. I also learned to sell stocks that I thought would take years to recover and reinvest in ones that would recover quicker.

One other thing to ignore is, "this time it's different." I've heard it enough times to now stop listening to the experts saying it. Sure, they might be right at some point, but you'll miss more opportunities by believing it.
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Old 03-19-2017, 01:42 PM   #33
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Were it me I'd ignore the market and miss all sort of buying opportunities. The gal, however, insists on both watching the news for the latest thing to be VERY AFRAID of and recording all our Morningstar end of day position values. She then likes to be sure who all has paid and we record our net worth. daily. Maybe that is a good thing, as we are becoming desensitized to market swings. I suspect that what will be a real problem is choosing to sell anything - rental and loan and property sale income exceeds our needs. Would be very difficult to see our net worth going down, even though we have sufficient to get us to the end of our days and could stop playing rather than running up the score.
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Old 03-19-2017, 04:10 PM   #34
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...Would be very difficult to see our net worth going down, even though we have sufficient to get us to the end of our days and could stop playing rather than running up the score.
+1000

Once a multi-millionaire, one does not want to go back to be a millionaire, let alone a thousandaire.
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Old 03-19-2017, 06:54 PM   #35
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How do you guys keep from market timing or panicking when things go south?
I avoid looking at it. And I really don't care about daily movements. I guess if I were going to spend it all on Tuesday, I'd be concerned about what the balances are doing between now and Tuesday. But I'll be spending it over the next 40 years, so what happens day-to-day is just not important.
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Old 03-20-2017, 06:18 AM   #36
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Looking at your investment performance

Everyone has a different asset allocation thermostat. I was 100% equities when it looked like the world was ending in 2009. I flinched and went 80/20. I felt better and have generally been 90/10 to 80/20 since. Maybe the OP's comfortable thermostat setting is more like 40/60 or even 20/80 and experience will determine what is comfortable. Nothing wrong with that and it beats the certainty of losing money through inflation by staying all cash. There are Vanguard Life Strategy Funds with those allocations and other posters have mentioned Wellesley, which does a remarkable job.

Part of the way that I'm built differently than the OP is that I dislike seeing cash laying around, because it isn't doing anything and it's losing value. Everyone is different and we each have to figure out what we are and, through experience, try to hang on to this uncontrollable beast we're all riding. Or, like the vast majority of people, we can choose not to ride at all and assume our health will hold and we'll work forever.
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Old 03-21-2017, 11:14 AM   #37
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Today is the one of days to test your AA. Dow is down 195 as I type.
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Old 03-21-2017, 11:25 AM   #38
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Today is the one of days to test your AA. Dow is down 195 as I type.
Not even 1%.


I was lucky, because I got quite a test the year before I retired. So after that, this seems pretty small I guess.
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Old 03-21-2017, 11:40 AM   #39
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Today is the one of days to test your AA. Dow is down 195 as I type.
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Not even 1%.


I was lucky, because I got quite a test the year before I retired. So after that, this seems pretty small I guess.
Agreed. 1%? Not even worth noting. Or to paraphrase Crocodile Dundee "Aht's naught a deep! Now HAT's a deep (pointing to 2000 an 2008!)!"


Hey, it's even better with LEGO's!

https://youtu.be/681zVPfnKN8?t=10

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Old 03-21-2017, 12:01 PM   #40
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Op is complaining about $1500 on a $700K portfolio. Just put this in perspective. It's like $7k if my math is right.
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