nun
Thinks s/he gets paid by the post
- Joined
- Feb 17, 2006
- Messages
- 4,872
I didn't rebalance or have an AA anyway while I was working (i.e. in the accumulation phase). Since I was only in my 20s and 30s, I was focused on maximizing the long-term growth, so I was 100% equities. Since additional savings were invested elsewhere, I was diversifying as best I could from company stock without touching "the mother lode", but I was still 100% equities overall.
Hey, it was the 80s and 90s!!!! But really, my young age had the most to do with it.
I did make one prudent diversification a few years before I retired (as the real possibility came into view). I sold a wee bit of the company stock to pay off our house. We didn't owe a whole lot on it anymore and we no longer had a high mortgage interest deduction - so no tax benefit. Paying off the house was a way to mitigate any "sudden unemployment" risk, and I did have the standard emergency fund set aside as well.
This was obviously successful for you, but the number of people with the opportunity for such gains and the even smaller number that realize them convince me that it is not a practical strategy for most people. I believe that going 100% equities is not a sensible approach to retirement savings and that there should be more emphasis on the protection of principal and guaranteed returns rather than riding the ups and downs of the market right form the start. Maybe put 50% into equities and 50% into an annuity.