Going all in, anybody with me?

[DrRoy]

I do no market timing of any kind.

 

[Choices]

I do no market timing of any kind.

Me neither, I just ain’t that smart.
My swinging for the fences days are gone. We just buy and hold. Very little buying these days as no longer in the w*rkforce. Next year we will be taking RMDs but those will probably end up in the S&P fund.
My “ day trader” BIL has become very quiet lately

 

[big-papa]

I do no market timing of any kind.

My motto as well. Except when reality gets in the way. Take yesterday, for example. Before the market opened, I put in an order to sell all shares of a fund that is no longer part of my plan. I'd been waiting for it to go under water so that I could tax-loss-harvest. You can argue that my waiting for it to go under water was indeed market timing, of a sort. Then Mr. Market had other plans yesterday and I quickly cancelled the order. It indeed would have sold above water had I not done that.. It can wait for a better day...

 

[Newventurer]

Agree with others, bottom may not be in. I watch ElliottWaveTraders.net, expecting an S&P drop to the 2250 range before heading back up. Pick your roadmap and hang on for the ride. Or, do what many here do and ignore it and live a little . Cheers

 

[donheff]

Your method of waiting for 2 drops in a row to put more in reminds me a little bit of what somebody over on the Bogleheads forum does. Go over there and look up "RBD" or "Really Bad Day" from a poster whose handle is "livesoft".

I do this to a degree. If we have seen two or three significant drops and my AA is a bit underweight I re-balance and often go a little aggressive. If I miss the bottom I wait. The problem is it is hard to catch a bottom. I was all set to re-balance this week and would have done so on Xmas Eve but I was out and about until the market closed. So I figured I would do it on the 26th but whoops, too late. Now I have to wait and see if we get some big drops. I never go all anything, I just hover around my chosen AA.

 

[big-papa]

I do this to a degree. If we have seen two or three significant drops and my AA is a bit underweight I re-balance and often go a little aggressive. If I miss the bottom I wait. The problem is it is hard to catch a bottom. I was all set to re-balance this week and would have done so on Xmas Eve but I was out and about until the market closed. So I figured I would do it on the 26th but whoops, too late. Now I have to wait and see if we get some big drops. I never go all anything, I just hover around my chosen AA.

Except for possible tax implications if done in a taxable account, nothing wrong with something like that which I can see. For me, it would satisfy an itch I have to tinker without the possibility of doing horrible damage to my portfolio.

 

[donheff]

Except for possible tax implications if done in a taxable account, nothing wrong with something like that which I can see. For me, it would satisfy an itch I have to tinker without the possibility of doing horrible damage to my portfolio.

Yes, taxable is 100% equities and stays there except for dividends.

 

[lemming]

Are you kidding. A 1k swing up makes me even more nervous then the slide down. I am getting older faster than I thought possible and I am going to rebalance with a lower equity percentage. I think cash is going to equal inflation again soon.
I just need to figure out how to do that right. Most everything is in IRA accounts so no tax harvesting-which is going to make this week volatile.

 

[RIGM]

I have to take Beer Man to task over his thinking he can FIRE at 40 with 3 kids, a SAH wife and only $500k in investable assets now. Mentioning credit cards as a possible source of emergency funds?? He doesn’t stand a chance of living a reasonable existence in early retirement unless he hits the lottery (or IPO), or wife gets a job. $500k, even growing well in next 10 years, let’s say doubling or even tripling, (in a market that by all accounts won’t generate above average returns in the next decade) is woefully inadequate to live on for 30-60 years IMO. Maybe he plans on moving overseas to a very low cost country. If he was 60 with say $1.5MM and kids were gone, it might work much better. Even then it is not a slam dunk (to me); it still would depend on his lifestyle, other assets (home paid off) and other retirement income (SS).

 

[Car-Guy]

If the funds are being invested for retirement purposes, then I would not even blink. go "all in" with close to 100% stocks, using a diversified index funds, and then close your eyes to it for the next twenty years...

I guess that depends a lot on your age... I'm not sure I'd go all in if I were still working and in my late 50's or into my 60's. Certainly wouldn't close my eye's for the next 20 years at that age. YMMV

 

[Beer-man]

I have to take Beer Man to task over his thinking he can FIRE at 40 with 3 kids, a SAH wife and only $500k in investable assets now. Mentioning credit cards as a possible source of emergency funds?? He doesn’t stand a chance of living a reasonable existence in early retirement unless he hits the lottery (or IPO), or wife gets a job. $500k, even growing well in next 10 years, let’s say doubling or even tripling, (in a market that by all accounts won’t generate above average returns in the next decade) is woefully inadequate to live on for 30-60 years IMO. Maybe he plans on moving overseas to a very low cost country. If he was 60 with say $1.5MM and kids were gone, it might work much better. Even then it is not a slam dunk (to me); it still would depend on his lifestyle, other assets (home paid off) and other retirement income (SS).

FIRE is not so much the goal as is FI. At 4% annual gain 40 will have us at 1.2MM with a paid off house. Not a slam dunk but doable with our low burn rate. Priorities and expenditures may change by then but we are trying to be aggressive and put away while we have ample physical and mental energy.

 

[gstillson]

FIRE is not so much the goal as is FI. At 4% annual gain 40 will have us at 1.2MM with a paid off house. Not a slam dunk but doable with our low burn rate. Priorities and expenditures may change by then but we are trying to be aggressive and put away while we have ample physical and mental energy.

Even taking 3% withdrawal from 1.2M gives you $36,000 a year.

There are a lot of families out there making that amount. You won't have to pay taxes and you don't have the expenses of working, healthcare is nearly free.

It is doable for sure in a low cost of living area, where rent or house prices are low.

 

[pb4uski]

I bought a slug of stocks today as part of my annual rebalancing... does that count?

 

[RIGM]

The effect of inflation is important, both pre and post retirement, even in a low inflation environment. For example in my planning, I use a 5% nominal return from a 70/30 investment mix, but 2% inflation makes that a 3% real return. If inflation hits 3%, then its 2%. Said differently, $1.2MM today is worth less in the future. Same for post retirement: $36,000 may sound ok now, but to keep the equivalent purchasing power of that over, say, 40-50 years, you need to earn the withdrawal rate plus the rate of inflation. So 3% withdrawal rate plus 3% inflation, or 6% nominal rate of return, would be needed to maintain $36,000 in purchasing power over the years (or a bit less than 6% because you also get a small amount from drawing down the principal over time if you don’t care about leaving an estate). You also might want to spend more earlier, living a bit larger, because you are healthy then, you have a bigger family, and because you will have SS later. Yet this means more risk in depleting some of that FI you built up.

Can a family of 5 live on $36k until the kids are gone? Kids going to college?

I completely applaud your desire for FI. It was a game changer for me. Still, working beyond 40 has huge benefits. I’d rather keep earning at some level and have more disposable income. Maybe downshift after 40, but don’t stop working. Reduced hours still could get you healthcare at work, gave you more hours w family, give you disposable income, and keep your nest egg (FI) intact. Your FI gives you the option to “stick it to the man” and take a few risks in changing jobs if desired (one of the benefits of FI). If you draw down on the $1.2MM between age 40-60, you begin to lose your FI. At 60, you might be hanging on for SS and living poor in your later years. You have a decade to think about it.

 

[Camellia]

I use a reverse index fund to hedge my individual stock holdings. It is far from perfect and requires occasional twerking! The advantage is I can move in and out (across 5-6 accounts) in under a minute.

I would want to see that reverse fund twerking! Does it go backwards?

 

[haha]

Even taking 3% withdrawal from 1.2M gives you $36,000 a year.

There are a lot of families out there making that amount. You won't have to pay taxes and you don't have the expenses of working, healthcare is nearly free.

I doubt this "A lot of families making $36 K". And the ones that are out there are not living a life that would have much appeal to anyone who was not forced into it. I am not familiar with anyplace where even a single could have an apartment, food, and an old car for $36K. I sure there are such places, but why choose to be that heavily constrained?

Here are some good stats on couples expenses. And families cost more.

https://www.seattletimes.com/seattl...no-2-in-country-for-income-of-married-people/

Ha

 

[NW-Bound]

The OP talked about having a paid-for house, along with $1.2M. For someone close to SS age, with children grown, retirement with that is easy.

For a couple in the 40s, with kids, I dunno. It may be doable in a really LCOL area, but I suspect the living standard would be so constraint that before long one would go look for some part-time work to get extra income for breathing room.

 

[RIGM]

The OP talked about having a paid-for house, along with $1.2M. For someone close to SS age, with children grown, retirement with that is easy.

For a couple in the 40s, with kids, I dunno. It may be doable in a really LCOL area, but I suspect the living standard would be so constraint that before long one would go look for some part-time work to get extra income for breathing room.

My point exactly. Living on $1.2MM with SS over 20-30 years is vastly easier than doing so over 40-50 years without SS and more mouths to feed in first 20.

 

[Rickt]

One Day's "Short Covering Rally" and guys want to go all in?

Not me.....Being a recent retiree living off his portfolio, No pension, No SS for another 12 years, I am staying put with my asset allocation

 

[GravitySucks]

O.P.
At your age I was "All In" all the time. (95/5)
Roll on Brother!

 

[gstillson]

I didn't have enough cash to buy what I wanted today so I had to buy some Gilead LEAPs instead.

Turned out to be a good move because the huge upswing at close made them go up $11,000. We live in an amazing digital time where you can make a few clicks and win or lose a lot.

 

[NW-Bound]

I didn't have enough cash to buy what I wanted today so I had to buy some Gilead LEAPs instead.

Turned out to be a good move because the huge upswing at close made them go up $11,000. We live in an amazing digital time where you can make a few clicks and win or lose a lot.

Yes. One used to have to drive or fly to Las Vegas to put it all on red or black. Now, he does not have to change out of his pj.

 

[aja8888]

Yes. One used to have to drive or fly to Las Vegas to put it all on red or black. Now, he does not have to change out of his pj.

Yes, one can go bankrupt just sitting at home in their underwear on a fast computer.

 

[trixs]

I doubt this "A lot of families making $36 K". And the ones that are out there are not living a life that would have much appeal to anyone who was not forced into it. I am not familiar with anyplace where even a single could have an apartment, food, and an old car for $36K. I sure there are such places, but why choose to be that heavily constrained?

Here are some good stats on couples expenses. And families cost more.

https://www.seattletimes.com/seattl...no-2-in-country-for-income-of-married-people/

Ha

Only most of fly over country and the south. Plenty of very nice places an individual could purchase with a mortgage + escrow for under $1K/month.

Example: https://www.zillow.com/homes/for_sa...558407,32.442784,-83.742943_rect/12_zm/0_mmm/

That leaves about $2k/month for everyday living expenses. I suppose if you really love Starbucks and expensive wine you might have issues.

 

[NW-Bound]

Wow, looks pretty nice for $182K. This home has been on the market for 129 days.

I looked up the Zip code, and it is a nice area, but isolated and surrounded by neighborhoods of lesser demographics.