Asleep At the Wheel

[audreyh1]

I deliberately designed my investment plan so that I could be asleep at the wheel most of the year. I generally wake up just before December. Do a little tax estimating based on expected distributions, then first week Jan annual withdrawal and rebalance as warranted, then I can go right back to sleep.

Reading this forum it’s hard to miss major market and interest rate news. Still - action is rarely taken during the year except for shuffling some cash deposits around if warranted, or tax loss harvesting if the opportunity arises.

For me watching the financial markets is pretty much entertainment, nonessential.

 

[audreyh1]

Me too! We've lost so many musical artists in the past couple of years, I jumped to the conclusion something happened to Ray Benton. Been watching some of their old concerts and clips on YouTube lately.

I don’t know why, it’s not Asleep At The Wheel, but the earlier videos reminded me of the Austin Lounge Lizards most amazing bluegrass rendition of a well known Pink Floyd number which I thought was such a hoot.

 

[Still Learning]

Prior years we have mostly been 60/40 in investments. 4th quarter of 2022 we exited stock and bond funds and shifted to federal money market and short term CDs. I expect sometime in the future to return to about 60/40 but expect the content to be different initially.


With the improved inflation news have recently opened some new stock funds. While some is international, being conservative in that area until global relations improve.


Meet with our tax/financial planning consultant this week for our annual review.

 

[MarieIG]

I've been asleep at the wheel for some time, leaving too much cash around doing nothing as in the case of my TD Ameritrade account which is about as bad as leaving cash in my local bank's checking account. I'm thinking of investing in an ETF so I can just sell off a part of the shares if I need cash or funds to purchase another investment. Any thoughts on what might be the best, safe, high yielding ETF that might suit my needs? Thanks in advance for any thoughts.

I believe that they don't charge for Schwab funds. Schwab has a high yield money market fund if you're interested in that. SWVXX TD's sweep account, IMHO, positively stinks.

 

[Lakedog]

SNOXX. It is a fund so it takes one day to get into sweep but at least has decent yield and no TDA fees.

+1
Another is SWVXX which I typically use to park cash at TDA, current yield is 4.38%. Not all that inconvenient with one day settlement.

 

[Happyras]

Most of our equity position is now in covered calls being rolled regularly to harvest the time value premium plus dividends. Most of our fixed is in FDZXX, short T-bills, and callable Agency and Corp notes.

Rolling the options in covered calls you can harvest a nice 1.6% div, while capturing another 6% in time premium on SPY. I am not sure why this is not more common, but my wealthier friends who won the game long ago have done this for years. You can either roll them out, or let them be called and do another buy/write. You have to only take naps, no sleeping......

 

[Koolau]

I retired in 2014 with a pretty standard asset allocation of around 60% stocks/40% bonds. This worked fine until recently. I thought I would just wait it out, so I still was not paying much attention. But today I did a check of the Prime Rate and was surprised to see it up to 7.50%. I guess I just have been having too much fun and not paying that much attention.

I had always planned to stay with my 60/40 asset allocation unless the interest rate got above the 7 to 8 percent range. I always thought that if you could get interest rates close to that, why not eliminate a lot of risk. So I guess its time to consider a big shakeup and a move to more fixed investments.

I have always been impressed with, and appreciative, of the advice from this forum so I want to ask what others here are thinking.

Have many others here moved out of stocks and bonds, and if so, where have you gone and what types of investments are you making (CD's, gold, etc.)? If holding on to stocks and bonds, at what point are you considering moving out of them?

Thanks!

I guess I would ask this question. If you moved to fixed, would you have enough to last the remainder of your life at current spend rate and adding in current (and estimated) inflation?

In my case, I already (in theory) have enough in my fixed to last the remaining years of my (our) lives. So it's okay to keep funds in equities for potential growth. If you are concerned that equities will never recover in your life time, be sure that fixed will carry you before switching. No expert here - I have made a lot of mistakes so YMMV.

 

[earlyretirement]

We use VUBFX. It might not be the best but it is easy. I'm not interested in chasing a few basis points for money that is just passing through the fund but YMMV.

Much better than the pittance that TDA pays, thanks.

 

[crashdox]

I've been doing a ton of reading, and all the literature I have found points me at SPIA and DIA annuities (yes, redundant word.) Move your fixed stuff to those, you have income for life. The research (look for yourself) shows this setup beats the fixed income approach. I'm close to setting this up myself. Look for *anything* from Wade Pfau. See RetirementResearchers, etc. Very easy to find the info.

 

[REWahoo]

Look for *anything* from Wade Pfau. See RetirementResearchers, etc. Very easy to find the info.

Note that Wade Pfau has very close ties to the insurance industry, and check who funds much of his research on annuities. Caveat emptor.

Check out this old thread discussing Dr. Pfau: https://www.early-retirement.org/fo...upid-question-but-who-is-wade-pfau-79544.html

 

[shafer9]

Might be the wrong thread but I couldn’t resist.

Ray goes on, and on, surrounding himself with ever younger players. Amazing band.

 

[sroby2020]

still got aways to go

With 30+ years (estimated) left in my retirement years, I am still about 75/25 AA.

We considered going more to a 60/40 or 50/50 AA, but that would actually increase our taxable income, and hence our tax bracket, so that was a bummer. We are sticking with high quality Dividend Kings/Aristocrats that still have slow growth year on year.

 

[Exchme]

I've been doing a ton of reading, and all the literature I have found points me at SPIA and DIA annuities (yes, redundant word.) Move your fixed stuff to those, you have income for life. The research (look for yourself) shows this setup beats the fixed income approach. I'm close to setting this up myself. Look for *anything* from Wade Pfau. See RetirementResearchers, etc. Very easy to find the info.

As I'm sure you read, you already have an annuity in SS that is superior to any commercially available one as it not only helps insure against longevity, it is indexed for inflation. Anyone interested in annuities should make sure they are maximizing their SS benefit first.

Annuities provide some insurance against longevity (lack of full inflation adjustments means this is not 100% protection), but the downside is lack of flexibility and bequests. Like any other product, the company has operating costs and has to make a profit, so if you have more than 25X, have bequest motives or could reduce your spending without breaking a sweat, it's very reasonable to "self-insure" and not buy them. Of course if you have less than 25X, the annuity you can afford may not be enough.

 

[Dwhit]

After sniffing around, I guess I am not yet ready to abandon my 60/40 allocation. But I will be monitoring more carefully. I did set up a bond ladder to offset some of my bond funds, but overall, I am not sure I am ready to bail yet.

 

[mrfeh]

Prior years we have mostly been 60/40 in investments. 4th quarter of 2022 we exited stock and bond funds and shifted to federal money market and short term CDs.

Here's a prime example of how attempting to time the market usually does more harm than good.

Total US Bond and Total US equities the last 3 months:

 

[pb4uski]

SNOXX. It is a fund so it takes one day to get into sweep but at least has decent yield and no TDA fees.

Or SWVXX

 

[RenoJay]

Bonds are certainly not yielding 7.5%. That said, I don’t think it’s a horrible idea to flip from 60/40 to 40/60 given current relative valuations for stocks / bonds vs historical benchmarks.

 

[Koolau]

Bonds are certainly not yielding 7.5%. That said, I don’t think it’s a horrible idea to flip from 60/40 to 40/60 given current relative valuations for stocks / bonds vs historical benchmarks.

Not specifically defending 60/40 (I'm much closer to 40/60 myself) but why would you switch that "radically?" If you've thought out your asset allocation at 60/40 or (pick a number) why would you change it just because equities AND bonds have been volatile of late. That's nothing new and just part of the investing game. I'd certainly be in favor of lowering equity position over time (as one ages) but a major shift means (to me, anyway) one believes that things have really changed (now and for the future.) IOW, one must think things are different and they will remain different than the past 100++ years.

I take no position on the best AA but wonder why one would change it radically because conditions have changed (as they always do.) I'm the worst investor on the forum, so if I'm wrong, please let me know as YMMV.

 

[yakers]

I have a target AA of 60/40 which was 59/29/16 EOY 2022. The only bond change I made was switching out of VG Balalced Fund (VBIAX) for VG Wellington in a tax deferred account as I want someone to manage my bond funds better that index portion of VBIAX. Adjustments in AA, if any, are made when RMDs are made and occasional events like car purchase and sons wedding. EOY AA 2021 was 55/28/17. There is a decision to be made, even if no choice is made, when we have mandetory withdrawals.

 

[KCGeezer]

Since this thread has wound down, I figured this would make for a good encore.

 

[Koolau]

Okay, I think we're awake now!

 

[CardsFan]

Wide awake now, as well. That was really good.