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Old 03-24-2020, 07:27 PM   #21
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Originally Posted by frayne View Post
Nope, using the Bogle model during these uncertain times, stand there and do nothing.
"Don't just do something, stand there!" is the usual quote. I'm kind of doing the same, other than dithering a bit on rebalancing.
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Old 03-24-2020, 07:30 PM   #22
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Yeah, I'm going to more cash, like 10% enough to cover 2 to 3 years spending. I thought my bonds would be flat during this kind of crap, but they are down 10%.

So me thinks I'll alter my AA to 70/20/10: E/B/C
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Old 03-24-2020, 08:18 PM   #23
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It evolves. My FI has become more conservative over the last few years and will probably get even more so.
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Old 03-24-2020, 09:10 PM   #24
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In retrospect, I'm glad a year and a half ago, that I decided to (temporarily) move down from my 60-30-10 allocation to 50ish-30-20, with a glide path back up (a la Kitces) when I reach full SS age. I temporarily reduced to 48% stocks in January, when I decided to skim off a bit more than 1/3 of 2019 gains, then skimmed off another 1/3 the last week of February after the market drifted down 10%, and then I briefly hit 40% stocks last week, before raising it about 3% by putting 8% of cash to work. Now I'm up to 46.5% stocks and if we go back down, I'll put another 7-10% of cash to work.

If the market had done a full-off final bull roar, as typically happens towards the end of bulls, I'm sure I would be looking at the 60-40 returns enviously. I have enough cash to make it to full SS--or more likely to put more cash back in, if the bear continues roaring.

This week and next will be interesting, to see whether this was a dead cat bounce. I'm curious how markets will take the unemployment claims/numbers next month.
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Old 03-24-2020, 10:24 PM   #25
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Staying the course...not doing a thing. Odd that I haven't seen any "should I pay off my mortgage" threads in a couple of weeks...
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Old 03-25-2020, 03:00 AM   #26
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This forum educated me on Sequence of Returns Risk. I am no expert, but the discussions and linked articles / books saved me from major mistakes of my FA (aka myself). While working, spent a LOT of Saturday mornings reading threads here and at Bogleheads - and going back to 2007-2009 threads to read the pain of the last crash.

Up to 2 years ago, I was 100% equities while working into my late 50's. Clearly not sustainable (actually in hindsight it was stupid), and just plain lucky to ride the bull. Random Walk down Wallstreet.

My strategy became early retiree conservative and a rising equity glidepath ala Michael Kitces. Some tweaks like MM funds while Fed was raising interest rates, and switching to intermediate bonds when they stopped. Going to FUAMX intermediate Treasuries in February just because I did not know what to do with that part of the portfolio and benefited from dumb luck on that bond fund this past six weeks. The forum taught me about rolling to an IRA and benefits of NUA - a huge benefit for me in LTCG earlier this year when raising cash cushion. Looks like executing LTCG any further is a few years off.

Now at the crossroads of indecision with the crash in progress. Just stand there and do nothing until the bitter end? Probably not since I am optimistic about long term American economic health. Holding FUAMX now looks safe because there are no corporate bonds in that fund - the downgrades and bankruptcies will start soon and challenge other bond funds. At a minimum, rebalance back to the planned 40/60 position this summer is a no brainer. However, I may go to the planned 60/40 position of the glide path much sooner - like this year. Additionally, I may cash out the pension instead of annuitizing. If that is the case, then I will throw that money into the 60/40 equation as well - and consider a private annuity later. I just feel like annuities are going to suck wind for quite awhile, and then inflation will bite hard 10 years down the road. May have to decide the pension cash out soon - although the pension was overfunded in January, that may not be the case now and redemptions could be limited.

For the moment - I am a deer in the headlights, hoping to not get run over.
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Old 03-25-2020, 05:40 AM   #27
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No. Primarily because my long term outlook (10 to 20 years) for business around the world has not changed. The only thing I question is loaning my money to the U.S. government and getting 0.8% in return when they have a mandate to keep inflation around 2%. I guess that's the price I'm paying to sleep at night.
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Old 03-25-2020, 05:57 AM   #28
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Quote:
Originally Posted by atmsmshr View Post
This forum educated me on Sequence of Returns Risk. I am no expert, but the discussions and linked articles / books saved me from major mistakes of my FA (aka myself). While working, spent a LOT of Saturday mornings reading threads here and at Bogleheads - and going back to 2007-2009 threads to read the pain of the last crash.

Up to 2 years ago, I was 100% equities while working into my late 50's. Clearly not sustainable (actually in hindsight it was stupid), and just plain lucky to ride the bull. Random Walk down Wallstreet.

My strategy became early retiree conservative and a rising equity glidepath ala Michael Kitces. Some tweaks like MM funds while Fed was raising interest rates, and switching to intermediate bonds when they stopped. Going to FUAMX intermediate Treasuries in February just because I did not know what to do with that part of the portfolio and benefited from dumb luck on that bond fund this past six weeks. The forum taught me about rolling to an IRA and benefits of NUA - a huge benefit for me in LTCG earlier this year when raising cash cushion. Looks like executing LTCG any further is a few years off.

Now at the crossroads of indecision with the crash in progress. Just stand there and do nothing until the bitter end? Probably not since I am optimistic about long term American economic health. Holding FUAMX now looks safe because there are no corporate bonds in that fund - the downgrades and bankruptcies will start soon and challenge other bond funds. At a minimum, rebalance back to the planned 40/60 position this summer is a no brainer. However, I may go to the planned 60/40 position of the glide path much sooner - like this year. Additionally, I may cash out the pension instead of annuitizing. If that is the case, then I will throw that money into the 60/40 equation as well - and consider a private annuity later. I just feel like annuities are going to suck wind for quite awhile, and then inflation will bite hard 10 years down the road. May have to decide the pension cash out soon - although the pension was overfunded in January, that may not be the case now and redemptions could be limited.

For the moment - I am a deer in the headlights, hoping to not get run over.


If you’re reading the Bogleheads Forum, have you read the Three Fund Portfolio thread? If you were invested that way you wouldn’t have to worry about all this stuff.
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Old 03-25-2020, 06:08 AM   #29
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I have made a number of changes.

In December I drained our ~5% cash position, which was earning ~1.7% in an online svings account to pay off our 3.375% mortgage. Since our previous target had been 60/35/5... I set a new target at 65/35 which was derived as 60/(100-5) and 35/(100-5)... in other words, I wanted to adjust my AA so the mortgage prepayment ended up from that lower earning cash component. At the time that I did that, we were ~60/40 and the plan was to let the AA creep up over time to 65/35.

Over the last 12 months, I have found 3.0-3.5% credit union CD specials totally unresistable and have loaded up on them. It is very surprising to me because prior to these CDs I had only owned one CD in my life and that was the 3.0% 5-year PenFed special from Dec 2013. Prior to that I had viewed CDs as stodgy and never had any interest in them. Yesterday, I also found Navy Federal's taxable account 2.25% 17-month CDs and IRA 3.0% 37-month CDs irresitable as well. So when all is said and done, various CDs... mostly 3.0-3.5%... will end up as 48% of our portfolio and they have a blended APY of 3.13%. Unless inflation spikes... which I find hard to fathom at this juncture, that seems to be a good ballast position.

The recent volatility and our portfolio total drifting towards what it was when we retired in early 2011 spooked me a bit and I am currently out of equities for the first time in 40 years. While I still believe in equities in the long run, the uncertainty about how deep and long the recession that will result from the disuption of the economy from the COVID-19 contagion is so hard to assess I'm standing on the sidelines until the smoke clears a bit. I'm search for less risky ways to participate in equities, like perhaps buying equity index leap calls, but at the end of the day it may a whild goose chase.

The good thing is that it will give me the opportunity to reposition things and somewhat of a fresh start once I decide the way forward.
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Old 03-25-2020, 06:29 AM   #30
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Old 03-25-2020, 06:33 AM   #31
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I can stomach a 30% decline in my equity portion, I've done it every time since I started investing in October of 1987, just in time for the famous Black Monday drop.


What bothers me more is the 10% decline in the bond portion.


I am with RobbieB and will be rebalancing to more cash and less bonds. I'll keep about 3 years living in cash with the rest invested in 3 or 4 index equity funds at VG (including a reduced holding in a bond fund).
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Old 03-25-2020, 06:43 AM   #32
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I'm more of a tinkerer than most of the people here.

Around feb 12
46.8% stock
30.9% annuity
2.1% cash
20.2% fixed

yesterday at close 3/24/2020
31.0% stock
2.9% antistock
35.6% annuity
7.1% cash
23.3% fixed

regarding gross effect down 13.4%

but this is misleading as I chose exactly the worse time(at least short term) to convert ira to roth on 2/21/2020. moved 1/4 of all ira to roth and paid for it from roth account cash sending 26% to irs.

If I figure that in down 10%.
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Old 03-25-2020, 07:04 AM   #33
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Nope, but I reserve the right to change my mind. Im sticking with all equities and a modest mm safety net until further notice.
If short term cd’s or treasuries jump to high single digits, I’ll eagerly buy. If silver ever rises to $40/oz, I’ll happily sell. Etc.
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Old 03-25-2020, 07:24 AM   #34
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I'd say looking back, I have made an error. All my investing life I've been aware of the 'rule of thumb' as you near retirement move to a higher percentage of bonds. Because I followed advice from another group, that says 100% stocks forever and bond returns have been so low as I neared retirement, I just never bought any. I retired 1-1/2 years ago at 63 yrs old. I have about 2.5% in bonds. However, I have about 30% of my money invested in 2 or 3 non bond/equity items. So, I can say I had 70% in equities, which has helped during this downturn. These numbers were at the peak.
Towards the end of last year, I withdrew 8% (of my equities) just to use my LTCGs and generate money for 2020 expenses. Then after the market had dropped, on 2/28 I sold another 18% (of my equities).
They value of my sold equities dropped another 17%, and this morning I bought it all back.
I may be too early, but I have a fear on missing out. You have to be in to take advantage of big days. (I did miss the 10% gain yesterday)
Just to clarify, Last year I sold taxable LTCGs, this year, I sold and bought back in tax deferred accounts.
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Old 03-25-2020, 07:30 AM   #35
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No change here from a ~75/25 just have to ride this out and doing nothing right now. In the future I will protect my holding and will change my strategy but for now and in the near future , staying the course.
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Old 03-25-2020, 08:51 AM   #36
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Staying the course. In fact I have not looked at my portfolio since Jan 31 when I downloaded dividends and interests from my financial institution into Quicken. We have enough cash or cash equivalent for 3 years of spending.
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Old 03-25-2020, 09:30 AM   #37
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I have a somewhat different take on this thread. It seems just about everyone is staying the course with their strategy. That is, if you are a buy-holder you stick with that. If you are a timer you stick with that.

I'm just wondering if anyone here is reading these posts and modifying their basic strategy?
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Old 03-25-2020, 10:06 AM   #38
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We are now approx 33/67 (cash). We sold about 15% equities from non-ira account in early March to lock in some gains. Retiring in May. Will have pensions that will help.

We are both age 59.

I don't understand bonds or bond funds so I stay in CD's and MM for my fixed portion. We hopefully have enough in cash and won't need our IRA's for 10-15 years or longer depending on circumstances.

We were strongly considering going more into equities but decided the risk/reward percentages were not in our favor.

Will stick this out from here.

Best of luck to us all.
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Old 03-25-2020, 10:19 AM   #39
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Our investing strategy has not changed but our spending strategy may be cut back a bit. Our investments include 5 years of cash, 5 years of bonds, and the remainder stocks.

We may try to spread the existing cash out over maybe 7 to 10 years (which will reduce our spending) until this panic calms down. The reduced spending is basically cutting out travel which is not a thing anymore for now anyway.
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Old 03-25-2020, 10:41 AM   #40
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I have a somewhat different take on this thread. It seems just about everyone is staying the course with their strategy. That is, if you are a buy-holder you stick with that. If you are a timer you stick with that.

I'm just wondering if anyone here is reading these posts and modifying their basic strategy?
Yes, I'm replacing bonds with cash or cd's for the non-equity portion of my portfolio.
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