Reduced Stock holdings to 25% today from 50%

[Whisper66]

Retired in March 2014. Bought a very large amount of equities during the August 2015 "correction" with available cash and bonds. Most was invested in stock / sector funds that had been hit pretty hard but had decent dividends. That money invested is still overall up a bit from the day I bought it. While I expect it may drop eventually below my purchase price before the market settles out, feels like it has a good upside (IMHO). And while the market is in it's downturn, I can live off dividends and a some remaining bond fund assets. When it eventually comes back up, I expect to have decent returns. So overall, feel good and honestly get that itch to invest more of my remaining cash/bonds. However, my plan says I'm pretty much at my maximum equity level to stay comfortable.....so I'll stay where I am.

[redduck]

If the stock market keeps on going as it is maybe we can change the title of this thread

from: Reduced Stock holdings to 25% today from 50%

to: Stock Holdings Reduced to 25% today from 50%.

[Coolius]

Quote:

Originally Posted by capjak I saw some AILLL and was wondering who got that.....I have been lurking for more AILLL

capjak,

I was able to buy 300 AILLL @ $25.74 today.

These dumps do not happen often, but apparently someone decided to dump over 3,700 shares ( that represents many weeks of trading volume ).

[Chuckanut]

One does not get the healthy returns to support a good withdrawal rate buying at the high points in a market and selling when the market goes down. This may be an opportunity to buy at prices that will provde a better long term return. Of course, one cannot gamble all on that.

The best way to help my return is to re-balance to the AA that has tested out to be the safest for my plans. I've seen drops of +40% and the people who panic always lose out, the people who buy low seem to make some extra dollars.

Of course, there is always the possibility of that asteroid hitting us at a bad time.

[NW-Bound]

Quote:

Originally Posted by Chuckanut ...Of course, there is always the possibility of that asteroid hitting us at a bad time.

Well, if ReWahoo's asteroid hits us, that makes it a bad time no matter what the market, or anything, does.

[DrRoy]

Quote:

Originally Posted by foxfirev5 38% equities and holding fast. 10 years of living expenses in cash. I wonder how the 70% +equity people feel now. COLA'd pension'ed need not apply. I envy you.

I will RE in about a year. Modest pension but not COLA. I am 70% equities, but also have 20 years spending in bonds/cash. The market does not make me feel good, but I know that long term it is the place to be and that I would never know when to buy the bottom and sell the top.

[VFK57]

First weak of January I was tempted to sell asap as many economists predicted a deep slide in Stock Market for most of 2015. However selling our dividends paying stocks means reduction of our income so I decided to stay in and watch now how all of our holdings are sinking deeper in the red.

[Mulligan]

Quote:

Originally Posted by capjak I saw some AILLL and was wondering who got that.....I have been lurking for more AILLL

These dumps all always interesting. Only a 100 shares had traded all week. Seller probably had to give up trying to give up the inflated ask price. They choose the acceptable sell limit, then the buy queue gets cleared out all the way down to that number which bottomed out at $25.60. Coolius notified me right when it all happened. There was a 100 lot available at $25.67 and I got them. Then ask price jumped to $26.75, but I was guessing that was a trick since an active buyer (me) was coming in. I didn't fall for it and bid $25.75 and they gave them up quickly. It dried up fast after that. More 6.4% safe dividends added until death or call do us part. The movement of these stocks are so minimal its funny how we can get excited about these "drops". I deliberately overpaid last month buying 400 at $26.20, but one day before exD, so really it was a $25.79 trade. So buying these at average cost of $25.71 shouldn't really qualify as a "steal". Its just so hard to get them at a reasonable price you take them when you can.


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[ERD50]

Quote:

Originally Posted by VFK57 First weak of January I was tempted to sell asap as many economists predicted a deep slide in Stock Market for most of 2015. However selling our dividends paying stocks means reduction of our income so I decided to stay in and watch now how all of our holdings are sinking deeper in the red.

If you sell every time "many economists predicted a deep slide in Stock Market", you'd never own any equities. Or you might buy back near the highs, when everything looks rosy. Classic buy-high, sell-low.

-ERD50

[Moneygrubber]

Quote:

Originally Posted by hesperus +1 Exactly

Agreed!


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[papadad111]

Curious where the 75 percent not in equities is residing ?

I think I'm within 1 percent to you even if I am holding 100 percent equities, despite recent market fall.

My math:

Me: Holding equities since October 1 2014, the sp500 was at 1937. Yesterday it closed at 1880. That's a drop of approx 3 percent. But, that's also 5 quarters worth of dividends that I collected on those equities, yielding approx 2.5 percent Annualized so Over 5 quarters that's a 3 percent total dividend return. After dividend taxes let's call it 2.8 percent return ... Versus 3 percent market loss... Means I'm down less 0.2 % Oct 1 2014.

A cash holder or someone with just 21 percent equities would not have suffered the 3 percent drop but would also not have collected much of the 3 percent dividend.

Perhaps you're ahead by about 1 percent after taxes etc.

The challenge: Both will suffer inflationary pressures over the long term but the 100 percent equity holder is likely to fare better having his assets invested rather than in cash .

One could argue whether or not that is material at this stage

But when does the 21 percent equity holder decide to buy back in. ? What if we rally 500 on Tuesday ?


From experience: I was 80 percent cash in 2007 and through the entire 2008 and 2009 market crash. I was looking smart.

Sadly I did not get back in early enough and it was not until well after the market rally was setting new highs that I had the balls to jump back in.

After 25 years of investing it was then that I decided to stop timing the market and revert to a simple buy and hold forever, collect dividends, always have approx 5 years of cash philosophy.

Not saying one is better than the other. But every study says timers only get it right some of the time and thus they lag the buy and hold crowd over the long haul (20+ years).

[LOL!]

A nice "correction" and impressive recovery happened since the last post in this thread.

Anybody got any updates?

[Senator]

I am nearly 100% in equities, other than the cash I need to maintain my rentals. Perhaps $75K in cash.

I continue to buy ~11K per month, except some of it is front end loaded due to Roth IRA, 401K match, and my 401K contributions that ended on 3/25/2016. First quarter reinvested dividends added another few dollars, which I do not track.

I averaged adding ~$16K a month during the first quarter.

Now it's off to the new 'normal' of ~11K a month again. All IVV, which is a S&P ETF. Sort of boring, but I get ~$2K a month in dividends now, all reinvested. No commissions, no capital gain distributions, all dividends qualified.

It's a lot easier to sleep at night knowing no matter what happens, the S&P will not go to 0. And if it goes down, it will likely go back up. And if it stays down, dividends will likely not be diminished too bad. And if it gets real bad, we are all screwed, not just me.

I owned many high-fliers in the past. I managed to lose money on AMZN, CSCO, MSFT, PanAm, CMRC, SUNW, PCLN, etc. I am happy with the indexes. Slow and steady.

[NYEXPAT]

I am short 40% S&P, 50% cash,10% international. With this last peak I unloaded Peru,Brazil,Germany but still have Japan. So closer to 60% cash now.

[Gone4Good]

Quote:

Originally Posted by Senator It's a lot easier to sleep at night knowing no matter what happens, the S&P will not go to 0. And if it goes down, it will likely go back up. And if it stays down, dividends will likely not be diminished too bad. And if it gets real bad, we are all screwed, not just me.

I'm not making any point with this, I just think it's an interesting / relevant bit of data. S&P 500 dividends declined by 25% from 2008 to 2010.

They're back up well above that 2008 peak now, though, just like the index itself.

[Totoro]

How much did dividends decline if you include buybacks?

[Gone4Good]

Quote:

Originally Posted by Totoro How much did dividends decline if you include buybacks?

I don't know who might keep data on this. But my guess is that buybacks went from somewhere north of "a lot" in 2007 to right around "very little" in 2009.

[Gone4Good]

Back to the OP.

I noticed that Running Man started this thread in September 2014 when the S&P was right around 2,000. Today it's 2,036. So for an update on selling equities 18 months ago, I'd say not bad. Or, at worst, "no harm, no foul."

[Sunset]

I bought a couple of BRK.B leaps when it was $130, I must have been sleeping when it was $125
However I'm up on those about 20%.

I should have bought more, but I wanted to play safe. Maybe next time.

[MasterBlaster]

Quote:

Originally Posted by LOL! A nice "correction" and impressive recovery happened since the last post in this thread. Anybody got any updates?

Market timers usually only post when they called it right. Otherwise we just don't hear much.