Have you been reducing equities in recent years?

[SecondCor521]

Not sure how many of the high % equity holders truly rely on their portfolios for most of their retirement funding.

As mentioned above, I'm at 97% equities.

I don't take SS yet and don't have a pension.

I do have what I call NPI - non-portfolio income - which adds up to about 48% of my annual expenses.

But I'd follow the same process I do now if my NPI went to zero: I'd rerun FIREcalc with my numbers, look at what AA gave me the maximum amount of survivability historically, apply that AA to whatever portion of my FIRE stash I would probably spend, and the rest would be at 100% equities for my kids.

Just for kicks, I went ahead and ran that analysis, and it wouldn't change anything - I'd still be at 97% (95% for my part, 100% for my kids' part).

 

[Lsbcal]

And here I thought 73% was aggressive. My age in stocks.

 

[USGrant1962]

And here I thought 73% was aggressive. My age in stocks.

I'm doing age in stocks too, but I'm only 59. Was 55/45 when I semi-retired at age 55. I plan an upward glidepath to 65 or so, haven't decided yet exactly where to stop.

 

[donheff]

And here I thought 73% was aggressive. My age in stocks.

Ditto here. I'm letting it grow with the increase in values. I expect Mr. Market will cut it down one of these years.

 

[audreyh1]

I’ve trimmed equities over the years simply due to rebalancing and a strong bull market. In absolute terms I own more simply due to growth in the portfolio.

 

[aja8888]

Have you been reducing equities in recent years?

Yes, at 77 (almost 78), I have trimmed back to about 35% equities. The rest is a mix of bond funds and cash.

I'm concerned that the current housing bubble and the gambling that is going on in the equity markets (and cryptos) may cause a financial meltdown if inflation goes higher. Fed control of inflation may be attempted by raising interest rates and that by itself will cause a panic in several asset classes. Because of my caution, my goal is to be conservative and preserve capital.

1. We have enough financial assets to last beyond our lives.
2. Health is our highest priority..I am very healthy, DW, not so much.
3. Our house is paid for.
4. Our children (and grandchildren) are on their own and doing OK.
5. I can sleep at night with this equity allocation.
6. My golf game is still pretty good!

 

[Lsbcal]

Ditto here. I'm letting it grow with the increase in values. I expect Mr. Market will cut it down one of these years.

My working hypothesis (what a phrase) is that we are in the mid stages of recovery and this will take us out a year or two at least. For instance, after the 1982 decline it took 5 years to get to the 1987 crash. In retrospect (rear view mirror) the March 2020 was a crash that I am not sure is equivalent to a drawn out business cycle decline like the early 1980's or 2008. On the other hand, business is not loosing it's head it seems like at other late business cycle stage periods.

So it's very murky in my crystal ball. But I intend to reduce equities to maybe 60% in a year or two.

 

[NW-Bound]

My stock AA fluctuates. It goes up/down with the market, and also with my tactical AA deliberate moves.

 

[Markola]

I was pretty sure the country was going straight to hell a few years ago and would be taking the stock market with it, so I did start easing up after a good ride. I’m 50/50 now and more globally diversified. It feels good, like I’m ready for anything.

 

[Katsmeow]

So this inspired me to go check where I am now. In March I was 48.6% equities. Since then I have done some regular withdrawals which have all come from bond funds. Nonetheless, I am now at 51.8% equities.

When DH retired and I semi-retired 11 years ago our asset allocation was about 55% equities although we could go a little over that. A few years ago we moved it to more 50-50.

I would say during the last year and a half we drifted down lower (low 40s) but I have tended to keep it in the 45 to 50 range.

So yes we have drifted a little lower but mostly just do to getting older.

 

[CyclingInvestor]

62, retired 14 years, no pension, started SS. Still at 100% dividend growth equities (since 1993), no thoughts of changing.

 

[DrRoy]

Over the last 5 years I have reduced equities from 63% to 56% as the market rose, as I did not need the higher exposure. My NW is beyond what I need and I feel better with the lower risk.

 

[Lsbcal]

So much of investing is dealing with our feelings. Wish I could calculate the best AA but the reality is I cannot ignore emotions. I probably am reasonably balanced between emotions and pure logic…maybe?

 

[NW-Bound]

So much of investing is dealing with our feelings. Wish I could calculate the best AA but the reality is I cannot ignore emotions. I probably am reasonably balanced between emotions and pure logic…maybe? ����

Indeed!

After about 25 years of active investing, the lesson I have learned about myself is this.

Looking back at my own experience, I see that the time when I was greedy and wished I had gone "all in" was when I should have taken some profits. Conversely, when I wished I had sold earlier was the time I should have bought.

And I know myself as a stock lover, because I tend to have problems selling rising stocks, but have less of a problem buying low. But in order to buy low, I must have money, meaning that I have to sell occasionally to raise cash. And so, I have learned to not fall in love with any stock, and to be able to sell stocks that become overvalued, or to recognize that a trend has topped out.

Market timing is indeed hard. Although I still practice tactical AA, I do not disagree with people who say not to time the market and sit tight, or just do rebalancing. You won't get hurt bad that way.

 

[Lsbcal]

Indeed!

After about 25 years of active investing, the lesson I have learned about myself is this.

Looking back at my own experience, I see that the time when I was greedy and wished I had gone "all in" was when I should have taken some profits. Conversely, when I wished I had sold earlier was the time I should have bought.

And I know myself as a stock lover, because I tend to have problems selling rising stocks, but have less of a problem buying low. But in order to buy low, I must have money, meaning that I have to sell occasionally to raise cash. And so, I have learned to not fall in love with any stock, and to be able to sell stocks that become overvalued, or to recognize that a trend has topped out.

Market timing is indeed hard. Although I still practice tactical AA, I do not disagree with people who say not to time the market and sit tight, or just do rebalancing. You won't get hurt bad that way.

Well said!

I recognized in myself after some years that I hated to see some parts of the market taking off while my holdings didn't do as well. Or I hated to see a stock I held getting negative publicity. So I picked a methodology that fits my temperament (emotions again). And I do pretty radical but very selective timing based on careful backtests over decades. For the last decade or so it is working and I've improved on it too. Definitely not for everyone but I like to do careful spreadsheets in my dotage.

And yes, I do not disagree with those who just sit tight and rebalance.

 

[CyclingInvestor]

So much of investing is dealing with our feelings. Wish I could calculate the best AA but the reality is I cannot ignore emotions. I probably am reasonably balanced between emotions and pure logic…maybe?

I have always considered investing to be be an exercise in math, with no emotions involved other than a vague sense of satisfaction over the decades as goals are achieved.

 

[NW-Bound]

And yes, I do not disagree with those who just sit tight and rebalance.

It's the same as one cannot disagree with people who recommend youngsters to get an education or training, then go get a stable job with a megacorp or the government.

I would not advice anyone to strike out on his own to open a small business or form a venture. Would you?

 

[Lsbcal]

I have always considered investing to be be an exercise in math, with no emotions involved other than a vague sense of satisfaction over the decades as goals are achieved.

Proves we are not all built the same. Hat's off to you.

 

[pjigar]

I have always been 100% equities! But I hold about 40% of NW in rental RE so that's my bond portion.

 

[Zathras]

Not sure how many of the high % equity holders truly rely on their portfolios for most of their retirement funding.

I’m not sure either.
I can tell you this high % equity holder has no other income source.

 

[targatom2019]

Age 52 and 2nd year in retirement. I put 18x in FI and 58x in equities with no plan to rebalance.

 

[Nick12]

No, equity holdings are why my portfolio has done so well over the years.

 

[Golden sunsets]

We are 72/74. We rebalance each January. We reduced our equity percentage 1% per year starting 5 years ago going from 55% down to 50%, with the intention of staying at that AA. We've rebalanced twice this year since January, bringing it back down to 50%, but recently equities have drifted back up to 52%. We may wait a bit before trimming again.

 

[RobLJ]

From 2017 to 2020, I steadily reduced the stock allocation from about 63% to 43%, with the perils in mind of withdrawals during a stock crash before my FRA in late 2024.
I hit 44 or 43% right before the March 2020 crash, when I hit 37% and promptly dumped back about 1/2 of what I had sold from Nov 2019 to Feb 2020. I intended to put back more as the market dropped, but the recovery was rapid, right after I rebought in fact.
Since then, I've sat back and watched the stock allocation climb back up to 52%. I'll scrape some gains for 2023 withdrawals if I/we hit 54-55%.
Like USGrant (I think), I plan to increase the stock allocation gradually after my FRA and after DW hits her FRA 4 years later., ending about 65%, so it will be a round trip to where I was in 2017.

But since I can claim SS now, in an emergency (I hold a lot of cash so it's unlikely), my worry about SORR is much reduced and in 2024 it will be even smaller. Meanwhile, the portfolio has gone up, so the withdrawal percentage has been shrinking.

 

[RetiredHappy]

For us, 15% in deferred income annuities, the rest are managed by a wealth management company in 70-30 equities to fixed income ratio. We recognized that I am a terrible emotional investor and lost half a million dollars through margin loan in the dot com bust and hence went with wealth management route. We no longer worry day to day about whatever happens in the stock market. When the market crashed last March, our FA reached out to us and asked how we felt, we told him that we were not worried, hence we had put a portion of our money into deferred income annuities so that we did not need to rely on the stock market for our retirement. All is well!