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Old 12-25-2017, 09:44 AM   #21
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65/35 more or less after nice run up. No need to change. Just keep dumping in money and hoping the market doesnít correct.
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Old 12-25-2017, 09:49 AM   #22
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With almost exactly one year to go before my FIRE date, and the bull market so old now, I am going to 0/93/7 at the first of the year (after the Santa Clause rally). I am just plain chicken now. I'll get back to "normal" at the end of next year.
There was a time when I would make a futile effort to convince folks who post something like this that their "gut feeling" investment moves were almost always bad decisions. Thankfully I'm past that now...
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Old 12-25-2017, 09:56 AM   #23
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Originally Posted by camfused View Post
With almost exactly one year to go before my FIRE date, and the bull market so old now, I am going to 0/93/7 at the first of the year (after the Santa Clause rally). I am just plain chicken now. I'll get back to "normal" at the end of next year.
What will you do if the market goes up another 20%? Or it it falls 20% and appears to be still falling?

Stay sitting? Or get back in at higher/lower levels?

How do you know when it is time to get back in?
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Old 12-25-2017, 10:31 AM   #24
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Having retired in July 2017 and following my wife into retirement, Instead of rebalancing equity position from 38% to 35%, my DW and I will RMD from equities (Vanguard Dividend Apprec. Index). I had and have been concerned about sequence of returns so my equity position going into retirement was 30% (34% if you count 1/2 of our TIAA Real Estate account as equity.
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Old 12-25-2017, 10:38 AM   #25
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With almost exactly one year to go before my FIRE date, and the bull market so old now, I am going to 0/93/7 at the first of the year (after the Santa Clause rally). I am just plain chicken now. I'll get back to "normal" at the end of next year.


I recall from your other thread that you think FAís are a waste of money. If you really intend to make these drastic AA changes based on a belief that you can time the market, you are a prime candidate who would benefit greatly from professional money management. Over time, far more money has been lost trying to time the market than in the market during crashes.

Good luck.
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Old 12-25-2017, 10:40 AM   #26
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There was a time when I would make a futile effort to convince folks who post something like this that their "gut feeling" investment moves were almost always bad decisions. Thankfully I'm past that now...


I just did that
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Old 12-25-2017, 10:44 AM   #27
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Iím not planning on significant changes to our 65/35 AA. My financial goal is to learn more about taxes and various other investments topics so that I can consider going DIY again. I was DIY for many years but hired an FA 4 years before we ERíd. Iím enjoying having an FA but the time will likely come when I feel the cost is too high and I take control again. Right now our FA has about 60% of our portfolio.
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Old 12-25-2017, 10:55 AM   #28
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My AA has been at 50/50 for a few years and I intend to keep it there. I am giving myself a raise for 2018 and will increase the amount that I withdraw from my portfolio by 1.35%.
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Old 12-25-2017, 11:27 AM   #29
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1 year into retirement we are at 80/15/5 - with less than 2 years left to FRA the 5% cash will tide us over so it is stay the course for us. If there is a major correction during the next 2 years we can live comfortably with a 0% WR until the projected SS haircut in 2034.
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Old 12-25-2017, 11:41 AM   #30
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When the CAPE hit the trigger, I added 20 years to my age and used that to change my AA. When the CAPE hits the low trigger, I'll go back to my normal age AA. Some of us can't not do anything.
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Old 12-25-2017, 11:43 AM   #31
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As one of the 'fortunate few' w/ pensions being our primary retirement income it's rather difficult to determine what our asset allocation is, other than 'heavy on the fixed income' side, very light on everything else. So I'll just continue putting most of our available cash in various dividend equities, primarily yieldcos, REITs and MLPs w/ long-term contracts. Emphasis on renewable energy, telco, data, etc.
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Old 12-25-2017, 02:08 PM   #32
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Will remain 60/40 for 2018; same AA as the past few years since FIRE.

Have also had to rebalance a few times this year to maintain 60/40 (actually 60/35/5ish). Only significant move is selling equities in Dec 2017 in our taxable account to capture zero tax LTCG, then using the proceeds for 2018 expenses + CD ladder rungs.

PS: Do have to admit though that I’ve considered moving to 50/50 several times this Fall/Winter. But, decided to hang in @ 60/40.
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Old 12-25-2017, 02:28 PM   #33
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DW just retired earlier this month, so 2018 will be the first year of decumulation after 40+ years of accumulation. Can you say "sequence risk jitters"?

Will go to 55/45 January 2018 from 60/40 in 2017 and 65/35 in 2016. I THINK 55% will be my bottom for equity position percentage, but who knows how I'll feel about it this time next year.
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Old 12-25-2017, 02:39 PM   #34
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Merry Xmas! I'll be staying the course with market investments (~60/35/5 risk profile).

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Old 12-25-2017, 05:17 PM   #35
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Replying to all who commented on my post, my FIRE plan starts one year from now. So, I look at it like I need my money only one year from now. By going to 0% stocks, I am trying to lock in on no loses until then. Perhaps my allocation should be 0/0/100, in order to achieve that.

A big part of investing is risk tolerance. My risk tolerance is real low right now, since loses would mess up my plan. I am willing to forgo a potential 15% gain, for a 1.5% highly probable gain. This will allow me to sleep at night.

A year from now, of course, I will have a normal 60/40 or something like that split.

So, I guess y'all think this is a wrong approach?

As for knowing something about the future, I don't. But surely, the probability of a correction grows every year the bull gets older. We listened to a "professional" many years ago after a long bull run, who said to keep in the market despite the obvious signs to us amateurs to get more defensive. We listened, and lost a bunch. I figure I can do as well as them now.
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Old 12-25-2017, 05:38 PM   #36
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I'm sure we all looked like geniuses in 2017 with our 10,15,20,25% ROIs but do you have any plans for 2018 as to changing things ?

I had to rebalance a number of times in 2017 to maintain a 60/40 (equites/fixed) split and finally just went to a 50/50 in December and I'm going to ride that pony till the cows come home in 2018. Yes, I know mixing metaphors is like killing two birds with a dog that don't hunt.

So what's your plan for 18, if you have any ?

Oh and by the way Merry Christmas to all.
Merry Christmas.

I don't plan to change a thing. I never do. I did the same thing in 2009 as I did in 2017, and it worked out OK for me either way.

I have a 45:55 AA, with a "buy and hold" portfolio of 30% Wellesley and the rest in four very broad index funds (total stock market, total bond market, international, and TSP G Fund).

I rebalance during the first week in January right after withdrawing my year's spending money, and also I usually rebalance if my equity allocation exceeds 47.5% or is less than 42.5%. I admit it's 48% right now, but I haven't rebalanced since I'll be messing with all of that in about a week.

This portfolio is probably too conservative for most people but it is just right for me.

With recent market increases, like most of us my portfolio has grown much larger than anything I ever hoped to see in my lifetime. Also I now have SS and tiny pension, neither of which I was actually counting on getting. So, I would be able to manage pretty well in case of a market crash without any suffering on my part.
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Old 12-25-2017, 05:45 PM   #37
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Replying to all who commented on my post, my FIRE plan starts one year from now. So, I look at it like I need my money only one year from now.
Unless you are not planning to live long, that seems like the wrong way to look at it.

These days, most folks will be in their retirement for 25-30 years or more. You need some money for year one. But you need a lot of money for the duration, not just for the first year.

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By going to 0% stocks, I am trying to lock in on no loses until then. Perhaps my allocation should be 0/0/100, in order to achieve that.

A big part of investing is risk tolerance. My risk tolerance is real low right now, since loses would mess up my plan. I am willing to forgo a potential 15% gain, for a 1.5% highly probable gain. This will allow me to sleep at night.
Okay, some have an extremely low risk tolerance and feel that way. Being able to sleep at night makes sense. Its the "until then" part that baffles me. You are okay with losses after the first year of retirement for some reason?

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A year from now, of course, I will have a normal 60/40 or something like that split.
I don't understand at all. 0% in equities for one year, then moving to 60% - I don't understand the point here. If the need for 0% exists for a year because you want to "lock in no losses", why would it end immediately after that?

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But surely, the probability of a correction grows every year the bull gets older.
No, it doesn't work that way. Each year has an independent probability that has nothing to do with the prior 9 years.

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We listened to a "professional" many years ago after a long bull run, who said to keep in the market despite the obvious signs to us amateurs to get more defensive. We listened, and lost a bunch.
My 401k went down a bunch in 2007-8. It recovered quite nicely after that. Fortunately I stayed in the market and reaped the benefits.

You are planning to get out of equities, then get back in after one year for some reason. Perhaps you see obvious signs that others don't. Maybe that's better than the professionals can do, maybe not. Time will tell.

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I figure I can do as well as them now.
Okay, good luck. I hope it works out for you.
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Old 12-25-2017, 05:53 PM   #38
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Originally Posted by camfused View Post
Replying to all who commented on my post, my FIRE plan starts one year from now. So, I look at it like I need my money only one year from now. By going to 0% stocks, I am trying to lock in on no loses until then. Perhaps my allocation should be 0/0/100, in order to achieve that.

A big part of investing is risk tolerance. My risk tolerance is real low right now, since loses would mess up my plan. I am willing to forgo a potential 15% gain, for a 1.5% highly probable gain. This will allow me to sleep at night.

A year from now, of course, I will have a normal 60/40 or something like that split.

So, I guess y'all think this is a wrong approach?

As for knowing something about the future, I don't. But surely, the probability of a correction grows every year the bull gets older. We listened to a "professional" many years ago after a long bull run, who said to keep in the market despite the obvious signs to us amateurs to get more defensive. We listened, and lost a bunch. I figure I can do as well as them now.
What I am struggling to understand is if you went out of stocks now because you are afraid of a correction in 2018 will derail your plans wouldn't you be equally or more afraid if we get to the end of 2018 and if the markets go sideways in 2018 or only have a small correction and your paycheck will stop because you retire?

IOW, if you are uncomfortable maintaining a 60/40 AA now perhaps you are not ready to stop working with a 60/40 AA.

IME, it is fairly easy to decide when to get out but the difficult trick is deciding when to get back in.... I know some people who bailed in 2008/2009 and never got back in and missed out on the rally entirely.
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Old 12-25-2017, 06:16 PM   #39
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What I am saying is that I am basically betting on a correction in 2018, at which point of course I would get back into the market.

But, ok, I see pb4uski's and joeea's points. I'll think them over and not pollute this thread any more while I work this out, except one more question: Based on my circumstances, what percentages would you recommend for 2018? Thanks guys.
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Old 12-25-2017, 06:18 PM   #40
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IME, it is fairly easy to decide when to get out but the difficult trick is deciding when to get back in.... I know some people who bailed in 2008/2009 and never got back in and missed out on the rally entirely.
I'm one of those people. I was so proud that I did not get hit hard in 2008/2009. I didn't go anywhere near as low as zero, but I think I was close to 30%. I lost out on a lot of the gains by not getting back in soon enough. DW never got back in and lost out even more. It feels so right to get out right about now with the market being so high, however, you have to figure out when to get back in. To Camfused, I highly recommend finding your comfortable retirement asset allocation and getting into it now and staying there (or at least sticking with a AA plan). I share other's concern as to why you would get back in at 60% in one year. Not giving advice beyond finding a comfortable AA, but if I was in 2008 again, it would have been good if I would have got back in over time. Basically dollar cost averaging.

Remember, anything can happen. The market could go down 20% and you'll feel good about having 0% in stocks. Then, according to your plan, you're back in the following year. You'll be a hero - until the market goes down another 20%. It will drive you nuts.

Trust me, I'm doing everything I can to avoid the impulse to get out, so I understand the issue. Keep reading and find comfort in a proper allocation that you can stick with. You'll go less crazy.
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