Join Early Retirement Today
Reply
 
Thread Tools Display Modes
Tempted to do a little profit taking
Old 07-23-2019, 08:08 AM   #1
Thinks s/he gets paid by the post
SumDay's Avatar
 
Join Date: Aug 2012
Posts: 1,862
Tempted to do a little profit taking

How rigid are you with rebalancing? This is our first full year of retirement, and after making our January IRA withdrawal for this year's living expenses, I notice we've completely recooped that, and have gained enough to cover next year's expenses.

I'm tempted to sweep that into my cash bucket, you know, just in case...
__________________
FIRE Class of 2018 @ 61

Old men and women sit in the shade of trees they planted long ago
SumDay is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 07-23-2019, 08:13 AM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jan 2018
Location: Tampa
Posts: 11,197
I have a 55/45 AA with a theoretical absolute 5% movement rebalance trigger and have kept to that range.
However I did take off 1% off the top earlier in the year to lock into a really good local CD.
So not so much that the market is too high, more so for a good lock in opportunity, while still keeping in my AA range.
__________________
TGIM
Dtail is offline   Reply With Quote
Old 07-23-2019, 08:52 AM   #3
Recycles dryer sheets
jimandthom's Avatar
 
Join Date: Nov 2014
Location: Beautiful UP
Posts: 243
We are in our 4th year of both of us being retired. It made sense for us, to periodically "take some profits", although we leave the $$ in the IRAs usually in the sweep account, sometimes in the S/T Federal account.

Because I am not collecting SS yet, and we are redoing this old house, the gains have been preserved and available when needed.

So during the year(s) I have been timing the market. If our total $$ were up 10K from the last time, we pull 1/2 or so out and put into the sweep account.

A couple of times a year after reviewing where we are on staying within the 12% tax bracket, we then rebalance back to our AA. This usually involves Roth conversions and sending $$ into a taxable investment account.

No idea on what we will do when the remodel is done and I start SS. My SS and small pension plus spouses federal pension, will pretty much cover all utilites, insurances, mortgage and still leave enough for most of our food and fun spending.

If taking $$ off the table helps you with sleeping at night--- go for it.
jimandthom is offline   Reply With Quote
Old 07-23-2019, 10:19 AM   #4
Thinks s/he gets paid by the post
 
Join Date: Oct 2012
Location: Reno
Posts: 1,331
In late June (before a 3 week trip to Ireland), I took some gains after the portfolio hit all-time highs, despite withdrawals the last two years. We now have funded withdrawals for the next 2.5 years. I'll scrape more if the market goes up another 5%.
After the recent withdrawals, I'm down to 58.3% stock allocation, as opposed to the target of 60%. Normally, at 63% I will rebalance.
RobLJ is offline   Reply With Quote
Old 07-23-2019, 10:24 AM   #5
gone traveling
 
Join Date: Oct 2015
Posts: 138
Quote:
Originally Posted by SumDay View Post
...I'm tempted to sweep that into my cash bucket, you know, just in case...
This notion indicates that you do not trust your portfolio.
Why?
What do you feel you have to change in order to be able to fully trust it?

Your mention of a "bucket" puzzles me as well; how many buckets do you have, and what is their purpose?
joylesshusband is offline   Reply With Quote
Old 07-23-2019, 10:30 AM   #6
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
jollystomper's Avatar
 
Join Date: Apr 2012
Posts: 6,098
I just did some profit taking with one of the few individual stocks I own. I sold a small percentage of my Microsoft shares, which I have owned since the mid 90s. Will likely "blow that dough" on something fun.

I am now slightly ahead of my target AA, but already have what is looking like "too much" cash set aside to weather any market downturns before we take SS, so other than starting Roth conversions I am letting things ride for now.
__________________
FIREd date: June 26, 2018 - "This Happy Feeling, Going Round and Round!" (GQ)
jollystomper is offline   Reply With Quote
Old 07-23-2019, 11:23 AM   #7
Recycles dryer sheets
 
Join Date: Aug 2006
Posts: 232
been 60/40 for years then after retiring in 2016 went to 55/45. After dow hit 27k I figured I have enough so went to 45/55 with 4 years in cash since we are not collecting SS yet. If the bull run ends and we have a correction I'd buy more equities that are on sale.


Another thing that scares me is a change in the White House as I think that would have an effect on the market. just my 2 cents!
DektolMan is offline   Reply With Quote
Old 07-23-2019, 11:28 AM   #8
Recycles dryer sheets
jimandthom's Avatar
 
Join Date: Nov 2014
Location: Beautiful UP
Posts: 243
Quote:
Originally Posted by joylesshusband View Post
This notion indicates that you do not trust your portfolio.
Why?
What do you feel you have to change in order to be able to fully trust it?

Your mention of a "bucket" puzzles me as well; how many buckets do you have, and what is their purpose?
Way I read the post, was that they have been fortunate with their portfolio and are of the mindset ----- its the "bird in the hand" concept.

After the first couple of years, now that we are both retired, its becoming easier to more clearly see what our expenses are and just what our $$ needs really are.

Doesn't mean not comfy with AA, just greater clarity and this is a great time to have a bit of extra fun.
jimandthom is offline   Reply With Quote
Old 07-23-2019, 11:28 AM   #9
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Mar 2016
Posts: 8,968
I pulled 40 grand from the IRA, all equities.
RobbieB is offline   Reply With Quote
Old 07-23-2019, 11:43 AM   #10
Thinks s/he gets paid by the post
 
Join Date: Oct 2012
Location: Reno
Posts: 1,331
As a bit of background, in 2021 my online gig income will run out, and I won't be able to withdraw from DW's IRAs (without penalty) until 2023. So while the market is up, I'm trying to build 2.5-3 years (2020, 2021 & 2022) of withdrawals without needing to sell in a large downturn. With dividends, I probably only require a little over 2 years of cash.
RobLJ is offline   Reply With Quote
Old 07-23-2019, 01:32 PM   #11
Recycles dryer sheets
jimandthom's Avatar
 
Join Date: Nov 2014
Location: Beautiful UP
Posts: 243
Quote:
Originally Posted by RobLJ View Post
As a bit of background, in 2021 my online gig income will run out, and I won't be able to withdraw from DW's IRAs (without penalty) until 2023. So while the market is up, I'm trying to build 2.5-3 years (2020, 2021 & 2022) of withdrawals without needing to sell in a large downturn. With dividends, I probably only require a little over 2 years of cash.
Makes perfect sense. You didn't get to Fire without planning ahead. Seems that planning in Fire makes perfect sense also.

Tending to believe that some of the investment mantras, read here and elsewhere(although less here than Bogleheads) are a tad rigid and lack full understanding of life.

We don't count our taxable in determining AA. That is set aside for remodel and gifting/transferring to local U, or just some kind of misc. purchase. Last year was around 3K for new kayaks and stuff.
jimandthom is offline   Reply With Quote
Old 07-23-2019, 01:48 PM   #12
Thinks s/he gets paid by the post
HI Bill's Avatar
 
Join Date: Dec 2017
Posts: 2,523
Quote:
Originally Posted by jimandthom View Post
Tending to believe that some of the investment mantras...are a tad rigid and lack full understanding of life.
+1
If you understand what FIRECALC does, you also need to understand what it doesn't do well. Other than adding limited income, or spending, it doesn't really do well with helping you plan for different phases of your life. Your 'funding gap' plan sounds reasonable to me, especially, if you don't need/want to continue to grow your entire portfolio. That said, if you've properly planned, most here would maintain that you should stick to your AA.
__________________
Balance in everything.
HI Bill is offline   Reply With Quote
Old 07-23-2019, 01:51 PM   #13
Thinks s/he gets paid by the post
HI Bill's Avatar
 
Join Date: Dec 2017
Posts: 2,523
Quote:
Originally Posted by RobLJ View Post
...I won't be able to withdraw from DW's IRAs (without penalty) until 2023. So while the market is up, I'm trying to build 2.5-3 years (2020, 2021 & 2022) of withdrawals without needing to sell in a large downturn. With dividends, I probably only require a little over 2 years of cash.
You could start taking SEPPs (substantially equal periodic payments) under IRS Rule 72t. But they have to continue for at least 5 years, and are based on the concept of RMDs and therefore have restrictive distributions, and severe penalties if you mess up the distributions.
__________________
Balance in everything.
HI Bill is offline   Reply With Quote
Old 07-23-2019, 02:04 PM   #14
Recycles dryer sheets
jimandthom's Avatar
 
Join Date: Nov 2014
Location: Beautiful UP
Posts: 243
Quote:
Originally Posted by HNL Bill View Post
+1
If you understand what FIRECALC does, you also need to understand what it doesn't do well. Other than adding limited income, or spending, it doesn't really do well with helping you plan for different phases of your life. Your 'funding gap' plan sounds reasonable to me, especially, if you don't need/want to continue to grow your entire portfolio. That said, if you've properly planned, most here would maintain that you should stick to your AA.
The highlighted is what some of the mantras seem to forget about.

We do stick to an AA mostly because everything I've read suggests that somewhere around 50/50 is a reasonable sweet spot. We are essentially 55/45.

Since we have no kids/heirs, the local U and 1 or 2 more organizations will get our stuff.

Guessing that a year or 2 after I've turned on SS and pension and we've re- learned our cash flow and cash needs AA may change a bit to hopefully provide more for the charitable beqests.
jimandthom is offline   Reply With Quote
Old 07-23-2019, 02:32 PM   #15
gone traveling
 
Join Date: Oct 2015
Posts: 138
Quote:
Originally Posted by jimandthom View Post
"bird in the hand" concept
Then there's the "AA" concept, and the two contradict each other.
What is the point of proclaiming that one's following the AA concept when one's following a different "bird in the hand" concept?
What's the point of having a set AA at all then?

Please, understand that I don't need answers to these questions, but the OP surely does. This is why I raise them.
joylesshusband is offline   Reply With Quote
Old 07-23-2019, 03:27 PM   #16
gone traveling
 
Join Date: Mar 2015
Posts: 3,508
Quote:
Originally Posted by SumDay View Post
I'm tempted to sweep that into my cash bucket, you know, just in case...
What is it that you are imagining will happen in the next few months, such that would be better to have cash rather than have your money working for you?

My crystal ball is hazy today...
joeea is offline   Reply With Quote
Old 07-23-2019, 03:42 PM   #17
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Dash man's Avatar
 
Join Date: Mar 2013
Location: Limerick
Posts: 5,633
Quote:
Originally Posted by joeea View Post
What is it that you are imagining will happen in the next few months, such that would be better to have cash rather than have your money working for you?



My crystal ball is hazy today...


I think he’s just concerned that he doesn’t know what he doesn’t know.
Dash man is offline   Reply With Quote
Old 07-23-2019, 03:44 PM   #18
gone traveling
 
Join Date: Mar 2015
Posts: 3,508
Quote:
Originally Posted by Dash man View Post
I think he’s just concerned that he doesn’t know what he doesn’t know.
Is not knowing what you don't know something to be concerned about?

That concerns me!
joeea is offline   Reply With Quote
Old 07-23-2019, 03:47 PM   #19
Thinks s/he gets paid by the post
 
Join Date: Mar 2009
Posts: 2,975
Nobody ever went broke by taking a little profit.
__________________
Took SS at 62 and hope I live long enough to regret the decision.
foxfirev5 is offline   Reply With Quote
Old 07-23-2019, 03:56 PM   #20
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 37,931
Quote:
Originally Posted by SumDay View Post
How rigid are you with rebalancing? This is our first full year of retirement, and after making our January IRA withdrawal for this year's living expenses, I notice we've completely recooped that, and have gained enough to cover next year's expenses.

I'm tempted to sweep that into my cash bucket, you know, just in case...
Most of my annual income is met by taking mutual fund distributions in cash, which are accumulated within the account to be withdrawn Jan 2 of the next year. So, in a sense, this can be taking profits if the market is up and equity funds are paying big distributions. In reality, most of the distributions are paid in Dec, so it's a pretty small window for "profit taking".

I rebalance after withdrawal in Jan unless there has been a huge change during the year. This is rare.

I often feel like "locking in" profits when things are running high. But I don't actually do it. Years retired has shown me my annual rebalancing system works reasonably well.

Actually - I already feel like I'm "locking in profits" whenever I withdraw funds in Jan after a good market year, as my income is based on % of portfolio value every Dec 31. Then I pretty much ignore the portfolio until Oct - Nov when I start looking at expected distributions.
__________________
Retired since summer 1999.
audreyh1 is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Fees Taking a Third of Profit ? reubenray FIRE and Money 86 10-20-2013 11:42 AM
Profit Taking marko FIRE and Money 23 01-18-2012 07:08 PM
profit taking and equity re-allocation JohnEyles FIRE and Money 20 10-07-2006 09:45 AM
Pension funds and Profit Taking Tadpole Other topics 6 01-10-2005 10:57 AM

» Quick Links

 
All times are GMT -6. The time now is 11:00 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2024, vBulletin Solutions, Inc.