Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Just thinking outloud
Old 07-16-2008, 05:00 AM   #21
Recycles dryer sheets
shotgunner's Avatar
 
Join Date: Jun 2008
Posts: 454
Just thinking outloud

"Guess what? If this market is bothering you to the point that you are not going to maintain your long-term investment plan, then you have no plan!"

I believe it was Colin Powell who said "no battleplan survives contact with the enemy"
__________________

__________________
shotgunner 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 07-16-2008, 07:26 AM   #22
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
donheff's Avatar
 
Join Date: Feb 2006
Location: Washington, DC
Posts: 8,643
Thanks for the post - it reminded me that I should rebalance - I am probably a little low on equities based on what has been going on. With the constant downward trend I haven't been looking at my spreadsheets lately.
__________________

__________________
Every man is, or hopes to be, an Idler. -- Samuel Johnson
donheff is offline   Reply With Quote
Old 07-16-2008, 09:51 AM   #23
Full time employment: Posting here.
Helena's Avatar
 
Join Date: Aug 2006
Posts: 619
Quote:
Originally Posted by mathjak107 View Post

key word ,nice little pension..... for the rest of us we have to creat our own. unless we can live on social security and have a large enough nest egg to not have to grow it then a certain amount of equities are a must
When I said, "nice little pension", I meant "little". He was a carpenter,
not a corporate executive with a golden parachute.

The more I observe, the more I understand, it's not what one earns
that is important, it's how one behaves and uses the assets he has
that matters.


~
__________________
Helena is offline   Reply With Quote
Old 07-16-2008, 10:23 AM   #24
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Nov 2007
Posts: 7,527
I am currently at 100% equities. This is my second bear market even though I am not quite 30 yet. However this is the first bear market where I have a substantial amount of capital in the markets.

I have learned that I am ok with my allocation - I don't have any problems sleeping at night worrying about losing money. On the contrary, I would prefer the next 10 year period to consist of low valuations while I'm accumulating assets.

However, I think I will feel different if I am consuming capital in retirement instead of living off of primarily dividends and interest. For this reason, I will increase my focus a little more on acquiring assets that are likely to pay above-market dividends. Since I have a policy of not buying individual stocks, this leaves me with dividend rich mutual funds and/or ETF's that invest in certain sectors or slices of the market. I already have a value tilt to my portfolio, and I will emphasize this more over time. I just bought a financials ETF to (hopefully) get a nice sized dividend payment long term.

My thoughts are that over the next 10 years there will be a number of sectors that pay nice dividends and they will temporarily "go on sale". Then I will buy to build a portfolio tilted to dividends as well as the current tilt towards small cap and value.

Ideally, I'd like to get up to 3% or so dividend yield which would fund 75%-100% of my eventual withdrawals in FIRE. I plan on a retirement period of 5 to 6 decades (or more if I'm particularly "lucky") - so eating into capital during down markets scares me more than it might scare the typical ER that FIRE's in their 50's. Heck, I might even stay 90% or so in equities during FIRE.

I also plan on doing some sort of variable withdrawal scheme that isn't fully tied to inflation/CPI. Dividends have historically increased long term, so over time my dividend dependent withdrawals should (in theory) rise as well.

To get back to the topic of the thread, I continue to learn a lot about my own investing psychology, particularly during volatile down markets. But so far I have only had urges to buy steeply discounted sectors in limited amounts. Otherwise I continue to DCA. If I can get to the point where my withdrawals are primarily paid by dividends and interest, I would be tempted to stay relatively close to my 100% equities allocation (say, 80-90% equities) during FIRE without worrying too much about fluctuations in the market. I would be willing to cut back on the budget a little during bad market years if it meant much more financial freedom in boom years.
__________________
FUEGO is offline   Reply With Quote
Old 07-16-2008, 11:15 AM   #25
Full time employment: Posting here.
Lusitan's Avatar
 
Join Date: Jan 2006
Location: Boston
Posts: 620
I haven't touched my existing investments, but I have changed my 401(K) contribution asset allocation in response to this bear market.

I eliminated the 20% that had been going into a bond index fund, and increased the contributions to my int'l stock index fund and total stock market index fund.

I still want to maintain bonds in my overall asset allocation, but with the new money I'm investing right now, I figure I might as well overweight equities for a while as we enter what looks to be a doozy of a bear market.

But I'm just another one of those 30-something punks with years to go before I plan on touching any of my FIRE stash. :-)
__________________
Lusitan is offline   Reply With Quote
Old 07-16-2008, 11:13 PM   #26
Thinks s/he gets paid by the post
DblDoc's Avatar
 
Join Date: Aug 2007
Posts: 1,224
Quote:
Originally Posted by Helena View Post
Not everyone sells his soul to the stock market.

My father never owned a stock/mutual fund in his life,
yet he retired at age 62 with no debt and a nice little
pension and nest egg that lasted him and my mom the
rest of their lives.

I divested myself of all stocks/mutual funds before I retired
from my corporate job at age 55... and I'm not waiting for
a bottom to reinvest... I am out for good.

I'll be watching from the sidelines. Ya'll enjoy the ride.

~
What is your strategy for dealing with inflation?

DD
__________________
DblDoc is offline   Reply With Quote
Old 07-17-2008, 12:37 AM   #27
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,617
Quote:
Originally Posted by DblDoc View Post
What is your strategy for dealing with inflation?
For the last 8-10 years my parents-in-law have been 100% fixed income-- "diversified" among Treasuries, CDs, and money markets.

Each year they've reduced their standard of living by (at least) the CPI.

Then financial advisors notice what they're doing and write research papers about how spending declines among the elderly, so we can all go out and spend more now.
__________________
*
*

The book written on E-R.org, "The Military Guide to Financial Independence and Retirement", on sale now! For more info see "About Me" in my profile.
I don't spend much time here anymore, so please send me a PM. Thanks.
Nords is offline   Reply With Quote
Old 07-17-2008, 04:07 AM   #28
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2005
Posts: 5,412
only thing those writers dont count on is most of us as we age may spend less on ourselves but way more on grand children and sometimes even our children. taking the family to disney, paying for college for grand children etc......
__________________
mathjak107 is offline   Reply With Quote
Old 07-17-2008, 05:39 AM   #29
Full time employment: Posting here.
 
Join Date: Aug 2007
Posts: 892
I remember early last year wishing for a bear market.

This was shortly after reading Four Pillars and Bernstein's comment that those in the accumulation phase benefit from a bear market, while those entering retirement a bull market.

Made a lot of sense to me at the time and it still does.

I feel for those that are on the border of retirement: I hope your aa is appropriate.

Early this year, I was 92/8 in equities/fi. Now it's about 89/11 and I'm itching to rebalance back to 90/10 (probably later this week or next).

Looking at the $ amounts involved, it's a bummer, but as long as you stick to your plan - set by your risk level - then there's no reason that this shouldn't pass.

Then again, maybe I'm overly optimistic, but my wish did come true.
__________________
tulak is offline   Reply With Quote
Old 07-17-2008, 08:07 AM   #30
Full time employment: Posting here.
CitricAcid's Avatar
 
Join Date: May 2008
Posts: 546
I'm young and building up, so I keep putting my money away and hope the stock market keeps giving great deals (these financials look awesome to me for the long haul). Sorry to offend those in or near retirement 8)
__________________
CitricAcid is offline   Reply With Quote
Old 07-17-2008, 11:11 AM   #31
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,385
Quote:
Originally Posted by kiki View Post
Early this year, I was 92/8 in equities/fi. Now it's about 89/11 and I'm itching to rebalance back to 90/10 (probably later this week or next).
Woo-Hoo! Don't get vertigo from this big change.

Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Old 07-17-2008, 12:01 PM   #32
Thinks s/he gets paid by the post
 
Join Date: Apr 2006
Posts: 1,487
Quote:
Originally Posted by kiki View Post
I remember early last year wishing for a bear market.
... my wish did come true.
now we know who to blame. (better lock you doors.)
__________________
d is offline   Reply With Quote
Old 07-17-2008, 12:21 PM   #33
Thinks s/he gets paid by the post
 
Join Date: Apr 2007
Posts: 1,304
Quote:
Originally Posted by Notmuchlonger View Post
Might have go back to work then
Hell freezing over yet?
... then NOPE, my belt has a couple of notches to go.

I'm now 58/42 AA now. Can't even dittle that yet.
Sitting on my hands.
__________________
Life is GREAT!
megacorp-firee is offline   Reply With Quote
Old 07-17-2008, 01:03 PM   #34
Thinks s/he gets paid by the post
 
Join Date: Dec 2007
Posts: 4,764
Quote:
Originally Posted by megacorp-firee View Post
Hell freezing over yet?
... then NOPE, my belt has a couple of notches to go.

I'm now 58/42 AA now. Can't even dittle that yet.
Sitting on my hands.
See its all good then. People worry too much
__________________
Notmuchlonger is offline   Reply With Quote
Old 07-17-2008, 03:08 PM   #35
Thinks s/he gets paid by the post
DblDoc's Avatar
 
Join Date: Aug 2007
Posts: 1,224
Quote:
Originally Posted by megacorp-firee View Post
Hell freezing over yet?
... then NOPE, my belt has a couple of notches to go.

I'm now 58/42 AA now. Can't even dittle that yet.
Sitting on my hands.
A much better strategy then many!

DD
__________________
DblDoc is offline   Reply With Quote
Old 07-17-2008, 08:11 PM   #36
Full time employment: Posting here.
 
Join Date: Aug 2007
Posts: 892
Quote:
Originally Posted by haha View Post
Woo-Hoo! Don't get vertigo from this big change.

Ha
I know...after the latest drop, I wish I had more cash to buy equities, so right now I'm walking a fine line of sticking with my allocation and taking whatever percentage I can get.

Of course, I could I always up my equity allocation...
__________________
tulak is offline   Reply With Quote
Old 07-17-2008, 08:20 PM   #37
Thinks s/he gets paid by the post
 
Join Date: Feb 2006
Posts: 1,183
Quote:
Originally Posted by laurencewill View Post
It takes waaay bigger brass cajones to stick to an aggressive plan in the withdrawal phase than the contribution phase. This market is merely a curiosity when you are punk 34 year old with 21 years to retirement and a mere 150k in equities. I think some of you have lost more than my entire portfolio this past year.
YUP... I did that. Then threw out the T-shirt. Now I am coming back hopefully stronger!
__________________
crazy connie is offline   Reply With Quote
Old 07-17-2008, 08:30 PM   #38
Recycles dryer sheets
 
Join Date: Feb 2008
Posts: 147
I'm a few years from FIRE, target AA is 50/50 bonds/stocks. It's slipped to about 56/44 as of early July. For the past several years, I was buying bond funds. Since January I've been putting all new money into equities, and that continues. I can't say I've slept soundly every night, but every time I crunch the numbers, read my value-investing heros, and think it over, there is only one conclusion: stay the course, keep buying equities while they're down. It's the surest path to ER for me.
__________________
headingout is offline   Reply With Quote
Old 07-17-2008, 08:53 PM   #39
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2003
Location: Kansas City
Posts: 7,408
Leave it to Taylor to rock em up with a good Boglehead reminder to 'Stay the Course.'

All praise (a little Stephan Ambrose) to Target Retirement 2015 and full auto.

Gave em a little tongue in cheek Geaux Saints.

I usually save the good stuff for this forum - since we are the greatest and have a really good sense of humor.

The older Bogleheads give calm steady advice - plus they get some great raging slice and dice debates going with really cool graphics, data and links to interesting studies.

heh heh heh - AND they don't charge 5 bucks to join like the old Morningstar. ala Mr B's 'you get what you don't pay for'.
__________________
unclemick is offline   Reply With Quote
Old 07-17-2008, 09:09 PM   #40
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,889
Quote:
Originally Posted by unclemick View Post
Leave it to Taylor to rock em up with a good Boglehead reminder to 'Stay the Course.'

All praise (a little Stephan Ambrose) to Target Retirement 2015 and full auto.

Gave em a little tongue in cheek Geaux Saints.

I usually save the good stuff for this forum - since we are the greatest and have a really good sense of humor.

The older Bogleheads give calm steady advice - plus they get some great raging slice and dice debates going with really cool graphics, data and links to interesting studies.

heh heh heh - AND they don't charge 5 bucks to join like the old Morningstar. ala Mr B's 'you get what you don't pay for'.
Yes, I really like the Bogleheads board and there is a lot of food for thought over there. But I don't post much there, I guess because I usually get it all out of my system over here.
__________________

__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities.

- - H. Melville, 1851
W2R is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
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
"Increasing Panic", London Times boont FIRE and Money 27 07-14-2008 09:56 PM
Bernstein comments on "troubled times"... REWahoo FIRE and Money 4 04-23-2008 04:08 PM
NY Times "retirement" section 10/24/2006 LOL! FIRE and Money 3 10-24-2006 06:01 PM
Book reports: "Blink" & "Tipping Point" Nords Other topics 2 12-04-2005 05:15 PM

 

 
All times are GMT -6. The time now is 12:54 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.