Gradual Changes in Asset Allocation

[audreyh1]

IF most of your investments are taxable, then a higher equity exposure is more tax efficient - less "ordinary" income, more appreciation in unrealized cap gains.

This certainly has become more appealing to me over time!

Note: The studies don't take into account tax effects. A non-issue if the bulk of your retirement portfolio is tax-deferred.

Audrey

 

[REWahoo]

If one's goal is ONLY to minimize the chances of failure, you may be right, but if you also have a secondary goal of maximizing the expected value of your estate upon your passing, you may want to increase your exposure to equities a bit.

I would have sworn that's what I was saying here...

Al, outside the sleeping well at night factor, I think you might be over thinking your equity percentage if your main concern is portfolio survival.

...and here:

If you can handle greater volatility, odds are you will die with a larger portfolio than those of us with weaker stomachs.

But mebbe not...

 

[TromboneAl]

Thanks for the input, guys. I'm going to think about this some more.

As happens every year, I'm just about to do rebalancing, etc, then a big storm hits and knocks out the power. The lights just came on an hour ago, and boy is it nice. Easy to take electricity and Internet for granted.

 

[REWahoo]

Al, you got whacked hard by a storm a couple of years back. How did this one compare?

 

[TromboneAl]

I just rebalanced to 57%, but I plan to stay at that level for years, perhaps indefinitely. It was very hard not to wait for a big up day, but if I'm not going to be a dirty market timer, I gotta put my money where my mouth is.

Al, you got whacked hard by a storm a couple of years back. How did this one compare?

This was much less severe. Two years ago we had 90 MPH winds, no power for a week, and no Internet for two weeks. This time only about 40 MPH, with power out for only two days.