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Down to 46% Stock. Keep Going?
01-05-2016, 12:47 PM
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#1
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2006
Posts: 12,880
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Down to 46% Stock. Keep Going?
We've been dropping our stock allocation by 2% on each of the last few years, and I just rebalanced us to 46%.
Anything to know as we move into this uncharted (for us) territory?
__________________
Al
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01-05-2016, 12:51 PM
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#2
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2006
Posts: 11,401
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Quote:
Originally Posted by TromboneAl
We've been dropping our stock allocation by 2% on each of the last few years, and I just rebalanced us to 46%.
Anything to know as we move into this uncharted (for us) territory?
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After the last few weeks, I'm surprised you needed to rebalance!
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01-05-2016, 01:04 PM
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#3
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2008
Posts: 35,712
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40% stock AA, here we come! Yes, it keeps going.
__________________
"Old age is the most unexpected of all things that happen to a man" -- Leon Trotsky (1879-1940)
"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
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01-05-2016, 01:21 PM
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#4
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Thinks s/he gets paid by the post
Join Date: Mar 2009
Posts: 2,985
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Going into ER this year at 40%. With the wild start to the year I'm comfortable with my plan.
__________________
Took SS at 62 and hope I live long enough to regret the decision.
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01-05-2016, 01:54 PM
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#5
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Thinks s/he gets paid by the post
Join Date: Feb 2014
Location: Williston, FL
Posts: 3,925
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It depends on your age and where else your money is coming from.
Warren Buffet recommends a 90% S&P allocation.
__________________
FIRE no later than 7/5/2016 at 56 (done), securing '16 401K match (done), getting '15 401K match (done), LTI Bonus (done), Perf bonus (done), maxing out 401K (done), picking up 1,000 hours to get another year of pension (done), July 1st benefits (vacation day, healthcare) (done), July 4th holiday. 0 days left. (done) OFFICIALLY RETIRED 7/5/2016!!
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01-05-2016, 02:22 PM
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#6
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Full time employment: Posting here.
Join Date: Apr 2015
Posts: 903
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Quote:
Originally Posted by Senator
It depends on your age and where else your money is coming from.
Warren Buffet recommends a 90% S&P allocation.
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Actually, I believe his generic recommendation was to have enough in cash/treasuries to sleep well at night and then put everything else in a low-cost S&P 500 index fund.
The 90/10 AA, I believe, is advice for his wife and is likely contingent on having a multi-million dollar portfolio (perhaps high-7 or low-8 figures) that she will be unlikely to spend in her lifetime.
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01-05-2016, 02:27 PM
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#7
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2002
Location: Texas: No Country for Old Men
Posts: 50,021
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Al, ~45% equities is where I settled in 2009 and I plan on keeping our equity allocation there, maybe until our heirs make a change.
__________________
Numbers is hard
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01-05-2016, 02:58 PM
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#8
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Recycles dryer sheets
Join Date: Mar 2010
Location: Poway, CA
Posts: 441
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45% stocks is my target as well.
Sent from my Nexus 4 using Early Retirement Forum mobile app
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01-05-2016, 03:07 PM
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#9
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Sep 2012
Location: Seattle
Posts: 6,023
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40% or 45% seems too low. If the market stays low so long that this allocation actually made sense, all of the US states, local governments, pensions are going to be beyond bankrupt.
Unless you are just planning to do some market timing and jump back to 60% on a temporary drop. I can get behind that idea.
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01-05-2016, 03:28 PM
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#10
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Moderator
Join Date: Feb 2010
Location: Flyover country
Posts: 25,350
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I used to be firmly in the 60% equities camp, but as I got older I gradually settled on 50% as my "forever" equity allocation. I'm fine with it anywhere between 45% and 55%, but I will annually rebalance to somewhere right around 50%.
I truly believe that lower is unwise, because I plan to live a long time.
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01-05-2016, 03:37 PM
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#11
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Thinks s/he gets paid by the post
Join Date: Feb 2007
Posts: 2,525
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Been at 50/50 since ER 13 years ago at 52. I feel comfortable there and my intention is to stay at that split for the duration. Ask me again when (if) I make it to my 80's.
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01-05-2016, 03:43 PM
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#12
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Thinks s/he gets paid by the post
Join Date: Sep 2006
Posts: 1,743
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50/50 AA and no plans to reduce stocks allocation......
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01-05-2016, 03:53 PM
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#13
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Sep 2012
Location: Seattle
Posts: 6,023
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I just feel as if we are way too young (mid 40s) to be at something like 50/50. One of the 50s is a guaranteed loser to inflation. Seems like you are setting up for failure if you start the race with a lame horse.
Maybe in our mid 50s when bonds are paying 6% and inflation is 3% then I would be willing to go 50/50 or even 40/60.
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01-05-2016, 03:57 PM
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#14
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2002
Location: Texas: No Country for Old Men
Posts: 50,021
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Quote:
Originally Posted by Fermion
I just feel as if we are way too young (mid 40s) to be at something like 50/50. One of the 50s is a guaranteed loser to inflation. Seems like you are setting up for failure if you start the race with a lame horse.
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Some of us are closer to the finish line and don't need to run as hard as those who have farther to go.
__________________
Numbers is hard
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01-05-2016, 04:03 PM
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#15
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2008
Posts: 35,712
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If the finish line is the entrance to the cemetery, I don't think I am that far away, unlike some people who plan to live till 100. But I am still at 60% equity, down from 70% last year. Life is boring and stock movements bring some excitement.
__________________
"Old age is the most unexpected of all things that happen to a man" -- Leon Trotsky (1879-1940)
"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
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01-05-2016, 04:05 PM
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#16
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Moderator
Join Date: Feb 2010
Location: Flyover country
Posts: 25,350
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Yes, that's such an important point.
It really doesn't help knowing someone's AA without some idea of their age.
In my case, the 50% is because I'll be 70 in a few months and also because I have a good pension that covers a lot of my expenses. Some would say that pension should mean I ought to have a higher equity allocation, but that would depend on my risk tolerance. Mine is only moderate.
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01-05-2016, 04:08 PM
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#17
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Thinks s/he gets paid by the post
Join Date: Mar 2009
Posts: 2,985
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Yes indeed. When you've won the game, take your winnings and live a little. Everybody's situation is different so it's probably a moot point.
__________________
Took SS at 62 and hope I live long enough to regret the decision.
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01-05-2016, 08:32 PM
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#18
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Thinks s/he gets paid by the post
Join Date: Aug 2006
Posts: 1,558
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Bonds? We don't need no stinking bonds.
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01-05-2016, 08:53 PM
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#19
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Thinks s/he gets paid by the post
Join Date: Dec 2015
Location: Santa Paula
Posts: 4,076
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I agree! We have enough income from SS and our pensions that we do not have to touch our principal other than gifts to our children.
Let it roll!
As Einstein once said, There is no more powerful force than that of compounding. Or something like that
__________________
Retired Jan 2009 Have not looked back.
AA 60/35/5 considering SS and pensions a SP annuity
WR 2% with 2SS & 2 Pensions
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01-05-2016, 09:10 PM
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#20
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Thinks s/he gets paid by the post
Join Date: Sep 2006
Posts: 2,844
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Quote:
Originally Posted by TromboneAl
We've been dropping our stock allocation by 2% on each of the last few years, and I just rebalanced us to 46%.
Anything to know as we move into this uncharted (for us) territory?
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The only thing needed to be certain is why you are doing it? As long as you believe in it and stick to it I think you will be ok, if there is a major reason causing you to doubt your plan then you could run into more issues. Ideally you would like to be selling stock every year for the remainder of your life.
__________________
But then what do I really know?
https://www.early-retirement.org/forums/f44/why-i-believe-we-are-about-to-embark-on-a-historic-bull-market-run-101268.html
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