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Where to go from here
Old 09-08-2019, 01:27 AM   #1
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Where to go from here

My other threads provide some background.

Bottom line is that I am recently divorced, new retirement plan is 2027 at age 62. Financially I could probably retire now if I had to. But it's still a probably

I'm a big fan of efficient market theory so I don't really look at short term things but I do look at the craziness going on right now

So how do I invest now? I've always favored stocks. With 8 years to go I am tempted to favor stocks and head for a 60/40. But I'm also fearful of the craziness right now and likelihood of recession.

What would you do?

?
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Old 09-08-2019, 02:27 AM   #2
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I'm a big fan of efficient market theory so I don't really look at short term things but I do look at the craziness going on right now
Efficient market theory doesn't say anything about short term vs. longer term - simply that the current price is reflective of all information currently available.

What I would do? As always, consider what is your investment objective and risk tolerance. If things were not to work out as planned, would you be willing to sacrifice an earlier retirement date and work longer, beyond age 62?

For someone who is age 54, a 60/40 allocation isn't terrible. I'm conservative so for most folks, I am traditional and say to go with 100 minus age as the amount in equities. However, depending on the circumstances, you could always justify a different allocation. In the end, it boils down to what you are comfortable with, and if you will be able to live with yourself and take responsibility for any outcome that results.
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Old 09-08-2019, 05:57 AM   #3
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What would you do?
I wouldn't try to time the market.

Determine your AA according to the risk you are willing and need to take. Put any thoughts about what the market might do the next year or two out of your mind.

IMO, 60/40 sounds just fine.

https://www.bogleheads.org/wiki/Asset_allocation
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Old 09-08-2019, 06:20 AM   #4
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I was 65/35 at your age and slowly reduced to 50/50 in retirement(3 years ago). You have to look at your own situation, risk tolerance, need for risk(don't try for home runs when singles will do the job). 60/40 is not unusual for your age.

Best to you,

VW
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Old 09-08-2019, 08:38 AM   #5
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Quote:
Originally Posted by SecondAttempt View Post
My other threads provide some background.

Bottom line is that I am recently divorced, new retirement plan is 2027 at age 62. Financially I could probably retire now if I had to. But it's still a probably

I'm a big fan of efficient market theory so I don't really look at short term things but I do look at the craziness going on right now

So how do I invest now? I've always favored stocks. With 8 years to go I am tempted to favor stocks and head for a 60/40. But I'm also fearful of the craziness right now and likelihood of recession.

What would you do?

?
I would lower my stock allocation by 1% each year.
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Old 09-08-2019, 09:10 AM   #6
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I would figure out what you want your AA to be when you retire at 62.... then make whatever adjustments are needed to get from where you are to that AA.... ~1/8th of the gap each year. If you are 100% stocks now, then that would mean increasing bonds 5% a year for 8 years to get to 40%.... do it with contributions and occasional shifts between stocks and bonds as needed.
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Old 09-08-2019, 11:25 AM   #7
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Quote:
Originally Posted by SecondAttempt View Post
Bottom line is that I am recently divorced, new retirement plan is 2027 at age 62. Financially I could probably retire now if I had to. But it's still a probably

I'm a big fan of efficient market theory so I don't really look at short term things but I do look at the craziness going on right now

So how do I invest now?

What would you do?
I would reassess my situation after my , decide my new goals, come up with an asset allocation that gives me a solid change to meet those goals, then invest accordingly - starting right now.

If I had trouble figuring any of that out, I'd spend a few dollars on a fee-only fiduciary financial adviser to help me.
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Old 09-08-2019, 11:31 AM   #8
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I have always liked stocks, but I also practice Tactical AA. I have reduced stock AA from as high as 80% down to 65% now. I will reduce it further down to 50% or perhaps even lower before the year end.

Yep. I am a market timer.
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