Personally I am too risk averse to buy and hold 100% in equities, even if I had an income stream covering all expenses. Reading this thread helps me better understand current market valuations. The old rule of thumb was to own one's age in bonds. It feels almost surreal to see retirees discussing their 100% equity portfolios. I get that bonds are not the investment that they were, but the fact that they may not be a good investment does not decrease the risks in the stock market. In fact I fear it may increase it, since so many seem to be loading up on equities instead.
Anybody else 100% stocks, no bonds?
- Thread starter BeFrank
- Start date
I keep 2 years in cash roughly. The rest in stock/reit/mlp. Fed killed bonds for now. Though awealthofcommonsense did mention the 7% yield in savings bonds with inflation protection, though limited to 10k.
I am 83. If I went by that old rule I would have missed out on the market, while losing to inflation.
If I considered our SS and pensions as a SPIA, my AA would be 65/35.
The fixed income covers all our expenses, and then some.
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I do not have a pension.
Yes---ran numbers in FIRECALC, Fidelity Planner and ********
not sure why site wont let me put the ******** one
my withdrawal rate started out at like 4.5% now its like ~2.6 % even less I think now
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Yes, almost 100% TSLA 
A few EVGO with leftover money. Investing in the future.
*Company 401k is 100% S&P500 index stocks.
Is it possible to trustee-to-trustee company 401k money to personal broker/dealer 401k while still working at the company?
A few EVGO with leftover money. Investing in the future.
*Company 401k is 100% S&P500 index stocks.
Is it possible to trustee-to-trustee company 401k money to personal broker/dealer 401k while still working at the company?
RetiredHappy
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I think AA has to do with one's comfort level as well. I am all for 80-20 Equities-Fixed income or an even higher ratio but my husband is comfortable at 60-40, even though we have annuities and SS to cover more than half our expenses. I am also managing my 35-year old son's investments and his taxable portfolio is at 84-16 currently. He is very conservative but he lets me manage his taxable portfolio. I believe his IRA account believe is all fixed income (cringe!).
Maidensong
Recycles dryer sheets
Multiple Streams of Income
Retired in 2015 at 59. We have 100% in individual stocks and mutual funds. No bonds. They were always losers. But...
Our monthly income is provided by rental income plus SS since we hit FRA. We haven't tapped our IRA and won't until the DH hits 72. So the ups and downs of the market are not troubling to us.
If you have more than one source to draw income from, it really takes the pressure off
Retired in 2015 at 59. We have 100% in individual stocks and mutual funds. No bonds. They were always losers. But...
Our monthly income is provided by rental income plus SS since we hit FRA. We haven't tapped our IRA and won't until the DH hits 72. So the ups and downs of the market are not troubling to us.
If you have more than one source to draw income from, it really takes the pressure off
VanWinkle
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If you are retired and 100% stocks/stock funds, do you tend to hold more cash instead of bonds? For those with pensions, SS, and Rental income this may not be a concern. But how about those living off their portfolio? Do you hold more cash?
FANOFJESUS
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I would not do 100% unless all my bills were covered. If not I think a balanced fund is better. Check out the 500 with a 5% withdrawal. Now add symbol
VBIAX to the chart.
https://www.portfoliovisualizer.com...3=Portfolio+3&symbol1=VFINX&allocation1_1=100
VBIAX to the chart.
https://www.portfoliovisualizer.com...3=Portfolio+3&symbol1=VFINX&allocation1_1=100
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street
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Excellent advise.
Not 100% but at 80/20% and not sure I will up the equity as I go forward. I would feel comfortable going 100% because my plan is for investments to be a legacy for other too use. Will just leave everything just ride the ups and downs and see what happens.
Bryan Barnfellow
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We produce 55% of our income from a pension, an SPIA, and SS (both US and Swiss)--effectively our bond allocation. The other 45% is derived from a concentrated dividend growth stock portfolio, along with a small holding in a few Vanguard mutual funds (IRAs) and a Schwab ETF. This has worked well during our nest-building years and during our subsequent retirement years.
-BB
-BB
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GTFan
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What risk? He has everything covered by the pension, the portfolio is just play money.
GTFan
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The problem with that strategy is that there have been multiple bears that have lasted longer than 2 years. You end up selling low.
And there's a lot of ERs here with a good ways to go until SS (including us).
GTFan
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Yeah asset allocation is important for tax reasons, even more so with ACA. I keep 100% of equities in taxable accounts and 100% of bonds in tax-advantaged (IRA, Roth, 401k) so there's no interest to report other than the piddly bank stuff.
GTFan
Thinks s/he gets paid by the post
Yeah I-bonds are a no brainer now, wish we could purchase more.
This question comes up every few months! I am technically 100% in stock for my liquid investments. But I have several liquid investments in RE. If I combine the "investment portfolio" then we are about 60% in stocks and 40% in RE. My goal has always been to generate enough cash flow (rental+dividend) to live off of. So fluctuations in portfolio value are less impactful. 100% stocks will give you better returns but higher standard deviation. It is all about what is your comfort level when market inevitably tank.
One of the reason we do 100% stocks is because we are planning for a perpetual retirement period. We have a special needs son so it is important that our assets last for at least two generations.
One of the reason we do 100% stocks is because we are planning for a perpetual retirement period. We have a special needs son so it is important that our assets last for at least two generations.
My iBonds are not liquid at all till the end of the decade! I bought mine in late 90's early 2000's, no way I'm selling! I'll sell anything else before. Insane return for no risk and tax deferred too! I quit buying when the fixed rate hit 0% so it's been a while. Wish I had more disposable income back then but bought what I could.
Major Tom
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Yes, but you don't sell all of your portfolio when the market is down. You only sell a very small portion. If you were to keep no cash reserve, other than what you needed for the current year, you would still be OK, provided you had a reasonable WR. Occasionally, you'd be selling a very small portion of your portfolio in a down year but, more often than not, you'd be selling during an up year.
All this stuff evens out, if you're able to take a long term view. I don't fully understand why some folk are preoccupied with never selling in a down year. There are more up years than down years.
And what would you advise an investor in Japan to do? They are still waiting for new highs since 1989. A lot of investors from the late 1980's didn't live long enough to see new highs.
Think that can't happen here? Why not? It did before. Actually 25 years for the DJIA price to recover 1929 highs, with dividends only 10 years but interest rates were as high as 14% then.
aja8888
Moderator Emeritus
Modern Monetary Theory (MMT) fixed those guys. And it's heading this way.
While I don't see anything wrong with 100% equities for the OP's situation and those of numerous others who've posted in this thread who have guaranteed sources of income to more than cover their living expenses plus paid-off houses and often other real estate, there's a lot of recency bias and perhaps unwise bravado in many of the comments about stock market crashes.
Just because you've lived through the 87, 02 and 08 crashes (as I have) doesn't mean you've experienced anything like the worst market crash so far:
"The Dow Jones Industrial Average rose from 63 points in August, 1921, to 381 points by September of 1929 -- a six-fold increase. It started to descend from its peak on Sept. 3, before accelerating during a two-day crash on Monday, Oct. 28, and Tuesday, Oct. 29. The Dow on what is now known as Black Monday tumbled by nearly 13% and declined by another almost 12% on what is referred to as Black Tuesday.
By mid-November, 1929, the Dow had lost about half its value. The stock market was bearish, meaning that its value had declined by more than 20%. The Dow continued to lose value until the summer of 1932, when it bottomed out at 41 points, a stomach-churning 89% below its peak. The Dow didn't regain its pre-crash value until 1954." (Motley Fool article on market crashes).
IMHO the frequent advice to look at your % in equities, imagine it losing half of its value and not recovering for 10 years and adjusting accordingly is still a decent starting point for all but the über-rich.
Just today William Bernstein offered a worthwhile counterpoint to the "100% equities" idea:
https://humbledollar.com/2021/11/when-cash-is-king/?utm_source=mailpoet&utm_medium=email&utm_campaign=another-ses-test_7
Just because you've lived through the 87, 02 and 08 crashes (as I have) doesn't mean you've experienced anything like the worst market crash so far:
"The Dow Jones Industrial Average rose from 63 points in August, 1921, to 381 points by September of 1929 -- a six-fold increase. It started to descend from its peak on Sept. 3, before accelerating during a two-day crash on Monday, Oct. 28, and Tuesday, Oct. 29. The Dow on what is now known as Black Monday tumbled by nearly 13% and declined by another almost 12% on what is referred to as Black Tuesday.
By mid-November, 1929, the Dow had lost about half its value. The stock market was bearish, meaning that its value had declined by more than 20%. The Dow continued to lose value until the summer of 1932, when it bottomed out at 41 points, a stomach-churning 89% below its peak. The Dow didn't regain its pre-crash value until 1954." (Motley Fool article on market crashes).
IMHO the frequent advice to look at your % in equities, imagine it losing half of its value and not recovering for 10 years and adjusting accordingly is still a decent starting point for all but the über-rich.
Just today William Bernstein offered a worthwhile counterpoint to the "100% equities" idea:
https://humbledollar.com/2021/11/when-cash-is-king/?utm_source=mailpoet&utm_medium=email&utm_campaign=another-ses-test_7
aja8888
Moderator Emeritus
Thanks for the link!
Major Tom
Thinks s/he gets paid by the post
If I were that fearful of a multi-decade market downturn, I either wouldn't be in equities, or I would have a very low allocation in them. I'm not about to keep 20 years cash reserves "just in case". We've had some members here who are indeed that risk averse, and that is their prerogative. Does the 25 years figure for the DJIA that you quote, take into account dividends paid out, or not? If not, then the dividends would have served to make the situation seem a little less dire. This is where FIRECalc comes in for me. It shows that my portfolio would have survived the worst periods that the US stock market could have thrown at it. Of course, it doesn't mean that we couldn't have an even worse event in the future. However, at some point, you either have to take a leap of faith and decide that you're comfortable with the risk, or you continue working for the rest of your life.
I'll take my chances with my 2 year cash reserve. I'm only 4 years away from early SS anyway.
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ERD50
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
First off, I'm pretty sure that 1954 number excludes dividends, which are part of value. Can't just look at NAV. And de-flation played into it as well (again, IIRC).
Second, for the cases you mention, these people would hold, and see it recover - for them or their heirs if they stay invested.
Even with the possibility of deep dips, it still has been a good bet for the long term, if you don't need to sell.
-ERD50
I'm not keeping 20 years cash reserves and I'm certainly not working longer. A decades long bear market may not be likely but the probability is certainly well above 0 and the impact, if it happens, is very significant. So I take steps to mitigate that risk and as a result my allocation to equities varies from roughly 30% to 70%. I fear that many here simply ignore the risk, or perhaps as you suggest take a leap of faith. To me, a stock market seems a strange thing to have faith in.
I answered your question about the 1929 recovery in the post that you quoted right above your question, but I'll repeat it for you: 25 years for the DJIA price to recover 1929 highs, with dividends only 10 years but interest rates were as high as 14% then.
