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Old 04-29-2017, 01:45 PM   #61
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Moderately invested. 55-65 percent (excluding vale of DB). Range depends on market at any given time. We fell quite comfortable with this because of a secure DB pension.

Like others, we did not sell anything in the 2008 crash. We actually picked up some equities. Worked well. 2008 was a blip. We are in for the long term-25 years hopefully. No doubt there will be other blips along the way but this will not preclude us from investing in equities.

A larger concern for us at retirement was sequence of returns. Worked out well as I retired early in 2012. The bump since then has made us more confident that a 55 equity split is reasonable in our circumstances.
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Old 04-29-2017, 02:02 PM   #62
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I double down in 2008-2009. Moved all bonds to 100% stock. Paid off nicely
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Old 04-29-2017, 02:23 PM   #63
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There you go have ice water in your veins & buy when there's body parts & blood running in the streets. It's easy. If eight years later you find yourself living in a relatives basement you know you screwed up. On the other hand if you tripled your money you know your a genius & should buy a lottery ticket too.
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Old 04-29-2017, 02:34 PM   #64
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That's the rub. A perfectly acceptable personal choice, but the risk is simply not comparable to broad bond fund. Vanguard characterizes Total Bond Market Index Fund Investor Shares (VBMFX) risk at 2 of 5 and High Dividend Yield Index Fund Investor Shares (VHDYX) risk at 4 of 5. Doesn't serve the same purpose in an asset allocation plan at all. I can only assume suspect Dash Man was advocating market timing, that's a different discussion altogether.
True, but IMO, I'd place the duration risk as being more prominent and lasting for several years if/when interest rates head up over a short period. While it doesn't serve the same purpose in an AA, it does provide an income stream similar to bonds.
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Old 04-29-2017, 02:34 PM   #65
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There you go have ice water in your veins & buy when there's body parts & blood running in the streets. It's easy. If eight years later you find yourself living in a relatives basement you know you screwed up. On the other hand if you tripled your money you know your a genius & should buy a lottery ticket too.
Not that it couldn't, but when how many times has that happened in the last 120 years? And which of those times didn't ultimately turn upward on go on to new highs?

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so are u still 100 % in stock?
Old 04-29-2017, 02:46 PM   #66
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so are u still 100 % in stock?

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I double down in 2008-2009. Moved all bonds to 100% stock. Paid off nicely
?
my tax guy(an old friend), had a huge hoot at my expense when he saw my 2008 year end investment loss(paper loss) i didnt sell and kept dollar cost averaging. he of course was smarter than me and timed the market and switched to a stable fund pre-crash, because he knew it was coming. this year i remembered about that so i asked him when or if he jumped back into the market, since he was a guru pre crash. he thinks the market is too hot now. he was short on details as i suspect he has missed the ride up we all enjoyed since 2009.
when did u go back to ur original asset allocation? im a little fuzzy on how this re-balance works once you go 100 % to any one item. thank you for the info
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Old 04-29-2017, 03:00 PM   #67
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What would you suggest as a similar risk/return alternative to bonds/funds? CD's and other cash equivalents have provided returns from 0-1% unless you go long. And bond funds were declared dead beginning in 2009 when rates were slashed, and that clarion call has been repeatedly constantly since. Meanwhile many short and intermediate bond funds have returned 2-3% per year after dividends and NAV changes for 8 years.

Everyone holding bonds should know the relationship between bond fund NAVs and interest rates.

This has been discussed many times here an elsewhere, and no one has yet come up with a clearly better alternative that isn't just trading one type of risk for another. Unless I missed it.


I think a lot of people believe there always has to be a better alternative, which may not always be the case. CDs at least preserve principal less inflation loss. Cash in a savings account may only pay 1% but again preserves principal less inflation. TIPs are an alternative to help protect against inflation, and if deflation hits at least you retain the principal if held to maturity. Mutual funds run the risk of market panic selling and liquidity problems. A small percentage of gold can help protect against hyperinflation, but won't earn you anything in the mean time. Stocks in companies with low debt that provide goods and services people need to live their daily lives are safer than stocks that consumers use discretionary money for. Rental properties can provide inflationary protection, but can also hurt you as seen in the 2008 crisis.
There's always risk in investing, and you have to weigh your tolerance against the financial realities of the world. Keeping diversified can include some cash or gold that may not earn anything at the moment, but will be there when you need it. $50 trillion in global debt scares me that something we don't see coming will trigger a financial avalanche far worse than 2008.
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Old 04-29-2017, 03:41 PM   #68
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It's true the system by hook or by crook has ultimately gone on to new highs so far. I'm sure the Incans Myans Romans & Soviets never thought their empires would turn to dust but they did. Of course they didn't have the luxury of having the world's reserve currency fractional banking & a federal reserve who can create inflation or deflation while it presides over the wealth of a nation. The powers that be have rolled out the red carpet for anyone willing to take risk like never before. It shows me they almost lost their system. So it shows me these folks can make major errors. Errors are going to happen. Question is how & how well do you recover from your error. The financial system is in uncharted waters but then again it's always in uncharted waters. Supposedly your compensated for this risk. Buffet keeps lots of cash around for those maalox moments that you know are just a keystroke away.
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Old 04-29-2017, 04:16 PM   #69
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I realize there are many here diversified into real estate and other opportunities, but regarding equities there is a groupthink among many members. The asset allocation crowd unwilling to budge from their particular asset allocation had always puzzled me. Things do change in the financial world that I believe requires readjusting financial assets periodically, but I'm labeled a market timer by the AA folks. Personally, after a 35 plus years bond bull market with rates near zero, why would anyone have a large allocation in bonds? Bond funds are particularly risky if there is a sharp rise in rates. But the AA crowd sticks to their allocation when bonds have no where to go but down.
Stock equities I maintain in selected individual stocks rather than funds that will follow the wild swings in a turbulent market should significant events happen. I do keep a large sum in cash to live on for several years if there is a severe market downturn. I also have real estate, insured CDs and some physical gold and silver.
Worldwide sovereign, corporate and personal debt is skyrocketing and printing more and more dollars will eventually take its toll. All it will take is loss of faith in these fiat currencies to cause a worldwide financial crisis worse than 2008. None of the causes of the 2008 crisis has really been fixed. But I guess we'll see in time.
Just plunked some bucks into a California double tax-free bond fund - VCADX. Scraped up dollars from Vanguard settlement accounts, checking and savings accounts at different banks, and even some from a Discover account making 0.95%. Fund isn't making much, but is doing better than the places we're funding it from. Rentals and contracts/loans do better, the stock holdings do better yet, but stocks seem so unreal to me.
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Old 04-29-2017, 04:39 PM   #70
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Not that it couldn't, but when how many times has that happened in the last 120 years? And which of those times didn't ultimately turn upward on go on to new highs?

If I'm reading this correctly, 1929 to 1954 - so it took ~25 years for the Dow Jones to recover?
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Old 04-29-2017, 04:40 PM   #71
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I'm not too fond of the term "group think" but what I can say is if you want to be thin, hang out with thin people. Want to be wealthy? Hang out with wealthy people.
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Old 04-29-2017, 04:50 PM   #72
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If I'm reading this correctly, 1929 to 1955 - so it took ~26 years to recover?


The 70s weren't good years after Nixon had to take us off the gold standard after he basically defaulted on Denmark's attempt to redeem a billion dollars for gold after multiple other countries had exchanged dollars for gold. 1998 had excitement with the Asian crisis. Argentina and Brazil each had a crisis and now a serious problem in Venezuela. Greece, Cyprus...who's next?
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Old 04-29-2017, 05:07 PM   #73
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If I'm reading this correctly, 1929 to 1954 - so it took ~25 years for the Dow Jones to recover?
And is the chart inflation corrected? Does it include dividends?
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they dont include dividends
Old 04-29-2017, 05:08 PM   #74
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they dont include dividends

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The 70s weren't good years after Nixon had to take us off the gold standard after he basically defaulted on Denmark's attempt to redeem a billion dollars for gold after multiple other countries had exchanged dollars for gold. 1998 had excitement with the Asian crisis. Argentina and Brazil each had a crisis and now a serious problem in Venezuela. Greece, Cyprus...who's next?
if dividends were included it was much much much shorter, i read that somewhere
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Old 04-29-2017, 05:10 PM   #75
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I hung out with all the beautiful people & none of it rubbed off.
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Old 04-29-2017, 05:19 PM   #76
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I hung out with all the beautiful people & none of it rubbed off.
they like when i hang out with them, i make them look a bunch better
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Old 04-29-2017, 05:20 PM   #77
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You & me both.
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Old 04-29-2017, 05:23 PM   #78
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I'm waiting for low cheek bones double chins & one eye lower than the other to come into fashion.
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Old 04-29-2017, 05:26 PM   #79
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Michael Strahan has gap between his teeth bigger than most New York City parking spots & most women think he's handsome so anything is possible.
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Old 04-29-2017, 05:27 PM   #80
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I think I'm straying off topic. One of my many very bad habits.
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