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Sold out of the market last Aug.
Old 07-09-2012, 07:13 PM   #1
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Sold out of the market last Aug.

I've become very conservative; retiring next year (age60) but earning 0%. Any thoughts on investing at this point.
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Old 07-09-2012, 07:20 PM   #2
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I've become very conservative; retiring next year (age60) but earning 0%. Any thoughts on investing at this point.
Become a little less conservative.
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Keep some stocks
Old 07-09-2012, 07:29 PM   #3
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Keep some stocks

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Become a little less conservative.
+1
All in or out is too hard to do! Keep some stocks with dividends as your base. I raised cash from 9% to 27% in March and it reduced the up and down volatility of the portfolio so far. But I will start going back in this fall, when we get back from vacation
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Old 07-09-2012, 07:36 PM   #4
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Even though "Dr. Doom" says his 'Perfect Storm' Is Unfolding Now?
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Old 07-09-2012, 07:38 PM   #5
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Someone is always saying the world is coming to an end. Someday they will be right...
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Old 07-09-2012, 07:50 PM   #6
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Someone is always saying the world is coming to an end. Someday they will be right...
It depends on the what the meaning of the word is "is". Or some other Clintonism.
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Old 07-09-2012, 07:51 PM   #7
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I've become very conservative; retiring next year (age60) but earning 0%. Any thoughts on investing at this point.
I would say buy more ammo and cases of pork and beans.
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Old 07-09-2012, 08:04 PM   #8
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While the perfect storm may be coming, does he know what it will do to your portfolio? I don't think so. The stock market may view it as a positive - get it all out and done with so growth can resume - instead of this drip drip torture that has the economy in limbo.
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Old 07-09-2012, 09:32 PM   #9
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I've become very conservative; retiring next year (age60) but earning 0%. Any thoughts on investing at this point.
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Originally Posted by REWahoo View Post
Become a little less conservative.
+1 with REWahoo

I hate to be the bearer of bad news Shust, but you're probably actually losing rather than earning 0%.

You start out the year with $100 and earn zero and end the year with $100; however, because of inflation at the end of the year it costs $102 to buy what one could buy for $100 at the beginning of the year. So in terms of what you can buy, you have actually lost 2% rather than earned 0%.
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Old 07-09-2012, 09:39 PM   #10
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If prices are lower than when you sold, buy some now. Buy more when it's -10% and -20% from where you sold. Otherwise I'd buy opportunistically and with a DCA-ish plan to make sure you get in eventually. I think you have a couple years at least before you really have to worry about losing your opportunity, but you never know. If you went all cash last August you might want to let Europe unfold a little more before buying back in.

Can you get to 40/60 stocks/bonds without needing to jump out again? Sounds like you might want to stay pretty conservative.
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Old 07-09-2012, 09:45 PM   #11
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You could just start plugging your nest egg into a Vanguard Target or Fidelity Freedom fund--they are appropriately conservative for one's age and they are autobalanced to become more conservative as time goes on. But they still earn more than 0 percent.
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Old 07-10-2012, 02:38 AM   #12
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How can you earn 0% ? Even CDs are at 1-3%.
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I've become very conservative; retiring next year (age60) but earning 0%. Any thoughts on investing at this point.
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Old 07-10-2012, 04:17 AM   #13
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I've become very conservative; retiring next year (age60) but earning 0%. Any thoughts on investing at this point.
Depending on when you sold in Aug you lost out on 4-15%. Not good but not the end of the world. You'll see from reading this forum and the FAQs that people have a wide variety of risk tolerances. Generally speaking at least a 25% exposure to stocks is recommended and historically has kept retirement portfolio from being eroded by inflation.
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Old 07-10-2012, 07:54 AM   #14
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How can you earn 0% ? Even CDs are at 1-3%.
Most likely from money market funds.
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Old 07-10-2012, 08:09 AM   #15
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Depending on when you sold in Aug you lost out on 4-15%. Not good but not the end of the world. You'll see from reading this forum and the FAQs that people have a wide variety of risk tolerances.
I agree with this statement.

Being that I retired in early 2007 - a bit over five years ago (at age 59) I also had reservations about what I was about to do, especially since I had no pension nor plan to take SS till age 70 (primarily for the benefit of my DW).

I learned a bit along the way while in retirement, and not all at once. For one thing (and I know a lot of folks will not agree with me, but that's OK - it's my life), I executed an SPIA with a portion (10% of our combined investment value, at the time) to provide a base income, similar to a pension - or SS.

Secondly, I learned not to take profits (either "cash in" or re-allocate) based upon a calandar date as I had done for many years while in the accumulation phase. Now if an indivudial fund shows a profit of +5%, I'll "cash out" and add it to my cash bucket, to meet current retirement expenses. We have the opinion that cash is not an investment, but rather an income source, and treat it as such. I know a lot of folks on this (and other) forums look to handle their retirement income in a different manner and try to maximize their cash "return", but we're fortunate not to have to take that risk.

That cash bucket is set to hold between 3-4 years in cash (MM). If I reach the max through sale of gains, I'll re-allocate in other funds. If not, I'll just reallocate to those funds that have not been doing too well over the last year or so (e.g. the "dogs").

In retirement, I don't need to "beat the market", since I/we have already reached "our number" (if we didn't, we would still be employed). However, there is a different mindset in retirement to ensure that cashflow (the most important data point, IMHO) and retirement account longivity remain solid.

Just my opinion, and my/our situation, FWIW...
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Old 07-10-2012, 08:24 AM   #16
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Even though "Dr. Doom" says his 'Perfect Storm' Is Unfolding Now?
Market timing is a pretty difficult strategy to execute successfully.
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Old 07-10-2012, 08:24 AM   #17
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In retirement, I don't need to "beat the market" ..
True, but a certain rate of return will still be required to maintain a certain level of withdrawal rate.
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Old 07-10-2012, 09:15 AM   #18
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I've become very conservative; retiring next year (age60) but earning 0%. Any thoughts on investing at this point.
I for one empathize, I am very concerned of losing any or part of our nest egg. and seem to get chastised a little for it.

SWR
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Old 07-10-2012, 09:27 AM   #19
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True, but a certain rate of return will still be required to maintain a certain level of withdrawal rate.
Since you referenced my post, just let me say that WD rate is not a major factor in our retirement.

As I said in my OP, I (and DW, who retired a few months ago) are living "off our investments" - me for 5+ years, DW for 3+ months.

While we are drawing much more than the oft referenced "magic 4%", we don't have a problem.

Why? Simply because we still have 4-5 retirement income sources to come "on-line" in the next few years, consisting of two small pensions for DW, my 50% SS claim against her in less than two years, and my SS (at age 70), in just over five years.

At the time our "total retirement income" comes on-line (in just over five years, when I turn 70), we will be at a WD rate of just under 2%.

Any perceived withdrawl rate does not apply to the current time, but to the overall retirement plan. If you concentrate on the immediate, you have a bit of "risk" of leaving more than required upon your (joint) passing - if that is a concern of yours.

No plan should just look at today, but consider the varances of many years into the future, IMHO.
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Old 07-10-2012, 09:49 AM   #20
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I've become very conservative; retiring next year (age60) but earning 0%. Any thoughts on investing at this point.
Hate to tell you this but you are not earning 0%. You are actually losing money because of the effects of inflation.
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