61 with 1.9m. can i still go moderate allocation?

[FREE866]

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Originally Posted by 54andchange The two best times to invest in the stock market are: 10 years ago, or today. For me, running many scenarios in FIRECALC reinforced my decision to remain 95% equities. This allocation level only slightly lowers the chances of success, but always resulted in double or more the final Portfolio value, for my situation. Your mileage may vary . remember, never EVER sell even a single share during a downturn during athe accumulation phase. I never did. It's just not that hard.

That's pretty much where I'm at and I retired January 2017. I put in numerous different allocations and sure, the volatility is much higher , but the balance is significantly higher over the long term with a heavy stock allocation.

[mikes425]

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Originally Posted by Sunset We are are about 70% stock overall, some bonds, bunch of interest earning things like CD's. So yeah, I find 40% equity extremely low, but now that the market is at record highs might be the worst time to buy heavily into stocks. Who knows maybe the market won't crash and it would be ok. The important thing is, what would you do if it drops 30% or more ? A question is, are you paying for the FA by the hour ? or how much are you paying this person ?

Hi, and thanks. Oddly, I didn't come around to having a more tolerant temperament towards volatility until the last year or two, vs. 10-15 years ago. You'd think it'd be the other way around but so it goes. The FA has been working with me 'as-needed' for an hourly fee. ranging from 200-250/hour over about ten years time. I've stuck with him vs going to some 1%-of-Assets type of arrangement (the traditional 'model') -- and i am maybe his only client who he works with this way... So in some respects i guess you could say I've saved $$ that way - but who knows, a different FA even after-expenses might've helped me achieve higher returns -- this fellow basically judged me to be too risk-averse to go more aggressive - and he had no incentive to push me in that direction really. I was pretty freaked out by the 2008-09 experience and only major regret was not re-entering the equity market at a higher level after that - like back to a 60% or higher equity position. I bet at least someone else besides me had the same experience.
'

[mikes425]

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Originally Posted by Telly Well... would you sweat over a 60/40 if the market takes a dive? All of the "Age Minus X" allocation rules of thumb never made sense to me. But then I haven't sold in a panic when the market drops, so I can hold a 60/40 without worry. I'm heading for 18 years into what began as Early-ER, passed through E-R, now I'm post-FRA. Have you put all of your specifics into FireCalc, and run it in historical mode? That should help.

Hi, yes, have run the FireCalc numbers. I 'think' i've used historical mode...maybe i need to double-check that. What i mainly have a problem with in that program is, deciding exactly how to set what my portfolio allocation actually is. Like, I'm not sure if it precisely mirrors the types of bond and equity exposure I have, but i think it's close enough. Anyway, running the calculations with many different variables, i've not encountered any scenario where it doesn't calculate a 100% success outcome based on a 25 to 30 year period of withdrawals...and accumulation with existing allocation seems like it'll be at least better than average.

[mikes425]

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Originally Posted by njhowie Nonsense - you didn't stay too conservative. You can only consider saying that looking in the rear view mirror. There was no guarantee what would happen over the past 10 years. You decided on an allocation which was comfortable for you, taking appropriate risks with which you could sleep at night. That's not being too conservative, that's being prudent. You should congratulate yourself on growing your portfolio by about $1 million in those 10 years! If you don't, I will.

Thanks NJH! I appreciate your perspective and sentiments. Agreed it's sometimes too easy to be too hard on oneself and i am glad to have accumulated what is probably by many standards, a reasonable figure at which to feel comfortable with ER. Perhaps it's a product of being self-employed,
that i've been a bit more guarded or questionable about deciding when enough is enough..since it's kinda always been all on me to make such judgements. I appreciate resources like this for perspective.

[mikes425]

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Originally Posted by Midpack These are what stuck out to me. Why did an FA suggest your risk tolerance wasn’t suited to higher equity exposure? Wanting better returns alone isn’t a reason to increase equity exposure. If you’re not going to be able to sleep at night when the inevitable correction hits (sooner or later), and you panic sell low, the higher equity exposure will do more harm than good. If you can’t hold on during downturns, you’re equity exposure is too high. The investors who had the biggest gains since 2008-2009 are the ones who didn’t panic, didn’t sell, and rode it out - many here. What was your equity allocation in 2007? And what did you do with your portfolio during 2008-2009? Hold? Sell? Buy? There’s no magic age-risk threshold. Some here have large equity allocations, some moderate, some low. And some are low only because they’ve already won the game and don’t need to take risk commensurate with their risk tolerance. I’d be conservative at about 80-85, but not likely before then.

Offhand I think I was at least 55% equity in 2007. In '08-09, After the 2nd or 3rd bank collapse I asked my broker to move at least a third of my portfolio into treasury funds. Frankly it's a bit of a blur and I don't relish looking back at the exact numbers at this point, but I didn't "buy" equity during the crash. So no i didn't full-scale panic, i scaled back a significant share of equity and moved it into bond/FI. The major error, if you wanna call it that, is not having rushed back into equity and reinvested post 2008-09...never fully returning to more than 50% equity. A banking system collapse and the whole derivatives fallout wasn't without future uncertainty. Yeah, i wish i wasn't conservative til i hit my 80s but it didn't happen and here I am.

[mikes425]

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Originally Posted by golfnut Everyone has a different attitude about asset allocation. I'd say leave yours alone and figure out what your total expenditures (budget) will be in retirement. If you will be going on Obamacare and keep your MAGI to less than $48,000 (I forget the exact no.), your healthcare premium could be very low. Look up what constitutes MAGI income- very important. I'd say you are good to go with $1.9 based on your life style.

Thanks. I'll have to evaluate that MAGI prospect... thus far i'm over the limit. Of course, the healthcare options are subject to some troubling people in power but theoretically if we aren't screwed over by corrupt factions, the prospect of taking advantage of a lower premium looks reasonably good.

[mikes425]

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Originally Posted by mystang52 +3 (I think that's the last count). From a money perspective, your portfolio grew considerably at 40% stock allocation. I don't think the numbers would have been a life-changing difference at a higher allocation like 60% And, of course, had the market gone down you may very well have been writing how glad you were with that 40% Investing is so easy in hindsight. FWIW I recognized 2 things about myself: I'm not good at individual stock investing, and I'm not comfortable at large swings in my portfolio. I've been at 40% for a very long time and sleep well.

>>Investing is so easy in hindsight.<<

SO true: ) . Thanks for the perspective mystang! Much appreciated!

[mikes425]

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Originally Posted by FREE866 That's pretty much where I'm at and I retired January 2017. I put in numerous different allocations and sure, the volatility is much higher , but the balance is significantly higher over the long term with a heavy stock allocation.

Interesting point to ponder!

[RenoJay]

I’m not against you increasing equity due to your age. I’m against it because, in a real world serious market crash experience, you proved through action that 40% equity is what you could/would handle emotionally. Now, when the bulls are running, you’re feeling more adventurous. That’s the opposite of emotionally-removed planning. I suggest keeping allocation as is.

[trumpeting_angel]

So, a few short days later, how does it feel after a market correction? Now, or soon, may be a good time to increase your equity allocation, but you know better than most of us that we can’t predict exactly when. It could be a good time to increase your equity percentage. Or perhaps, to start adding equity exposure with new savings.

Or not. Your numbers look healthy.

[mikes425]

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Originally Posted by trumpeting_angel So, a few short days later, how does it feel after a market correction? Now, or soon, may be a good time to increase your equity allocation, but you know better than most of us that we can’t predict exactly when. It could be a good time to increase your equity percentage. Or perhaps, to start adding equity exposure with new savings. Or not. Your numbers look healthy.

Hi and Thanks for your note! Very timely you should mention this as I just emailed my occasional FA to schedule a review about that very idea, given the correction.

In terms of actual numbers, I calculate my loss from my peak asset value (- about three weeks ago) to be about 120k at this point, i.e, from almost 2.1m to abt. 1.95m at this moment. Relatively speaking hopefully with my allocation i haven't lost, percentagewise, nearly as much as one who is in a 60% or higher equity PF...(vs my 60%-ish bond/FI allocation)...or at least hopefully am in line with the average moderate-conservative PF holder.

But yes, am planning to send my stuff to the FA over the weekend, and talk about maybe upping the equity exposure, taking advantage of the discounted market; maybe would liquidate some cash from low-interest safe-haven funds like MINT or Treasury( SCHO) fund - to facilitate the buys. I was premature in picking up a small lot of APPL on its way down... too soon ...a few days ago. Anyway, again, thanks for thinking of me! : )