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Old 03-25-2020, 10:44 AM   #41
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Plan to lower the equity portion of AA. However, the market automatically does it for me.
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Old 03-25-2020, 10:47 AM   #42
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Quote:
Originally Posted by Lsbcal View Post
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?
I have been replacing my individual stock holdings with index funds over time.
So that part of this place has appealed to me.

In fact as the market declined in feb.. I sold the majority of anything stand alone that was down 15% to raise cash. So I have been simplifying ever since I came here.
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Old 03-25-2020, 11:16 AM   #43
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Ive been playing the odds, so to speak, by staying heavily in the market. That decision of course looks painful right now, but I havent sold or moved anything so, when it comes back up, I will realize those gains again. The difference for me is that I am still W******, so I have time for the market to recover and still get my paycheck.

What it did change for me on a temporary basis, is that I am in a no-spend and pile up money mode right now. Bonus payouts are next week and we had plans for new carpet and a new garage floor but instead I am going to sit on that cash.

The good thing is we have only the mortgage and utilities and no other bills. So our needs for cash are fairly low and our reserves/emergency fund will last quite a long time before I would need to even consider dipping into any of my accounts that currently show a loss of value.

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Old 03-25-2020, 11:36 AM   #44
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I just feel stupid.

Several people I personally know who weren't in the market before and were sitting on a big pile of cash instead because they thought the market was too high to buy are now much better off than me buying equities at a 30%+ discount than I did.

What has worked though is having 1.5yrs of expenses in cash so I'm not panicking. Hopefully I can use some of it to take advantage of the fire sale on the way back up.

Going forward, I will probably hold 3-4yrs cash as I get closer to retirement.
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Old 03-25-2020, 11:50 AM   #45
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We haven't had a huge allocation to stocks but we decided to sell off what we have on the bounces. We've been reading up on the worst case and best case outcomes for the epidemic and decided we weren't prepared to hold stocks through the worst case. We have been more interested in capital preservation than growth in general, but now even more so.
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Old 03-25-2020, 12:11 PM   #46
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We were taking dividends and capital gains from our taxable mutual fund account as cash. A couple of days ago I made the switch to reinvest both (thinking "buy low").
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Old 03-25-2020, 12:35 PM   #47
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I am still working, but planning on retiring this year. Nonetheless, I did not watch the markets with an eye to reducing my equity position in part because I am already a fairly conservative investor (55/45) and I just wasn't thinking about selling. Also, I will have a pension from megacorp that covers my basic needs, so my portfolio is for extras and, of course, the great unknown. My 5 year retirement plan includes my megacorp pension and selling off my CD ladder until I reach 62, so I can ride out a 5 year Bear if I have to.

Going forward, I am watching for an opportunity to buy low, possibly by moving my megacorp 401k from a 55/45 fund to a 90/10 fund. I am trying to use the CAPE ratio as my guide, so I'm not going to be a market timer. And the reality is that I will probably do nothing, at least this year.

After retirement, I may drift down to around 40/60 in my portfolio. My hazy plan is to work on getting my dividends up by scoring some of the higher yielding CDs that get talked about on this forum. My I-Bond ladder is solid as a rock!
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Old 03-25-2020, 01:50 PM   #48
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Ironically, this event has made me more confident in my approach.

I've lost oodles of money on paper, but overall my balance sheet (which is built like Fort Knox and reflects my learnings from 2000 & 2008) is doing exactly what its supposed to do.

Some parts let me sleep at night through the hurricane, some parts put the brakes on the losses, investing across a range of asset classes/company sizes/countries creates rebalancing opportunities, clear buckets of money with specific purposes allow me to think clearly on different aspects of the situation & some extra cash has been available to push into the market a bit more quickly.

My only changes are tactical:

1) Put about 3 months worth of normal investing pace to work in 4 weeks

2) Nibbled on the high yields in the energy sector. Bought twice but got weak knees on the 3rd buy as the bottom just continued to fall out. Intend to put a buy in well below the now recovered price. Shouldn't kept my conviction!

3) Not selling company stock that vested. I normally sell as soon as it vests, but I'm not selling any equities at this level.

4) Being very aggressive about tax loss harvesting

I may also accelerate the purchase of a beach house. Perhaps.
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Old 03-25-2020, 03:38 PM   #49
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Quote:
Originally Posted by Stormy Kromer View Post
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).
10% drop in bonds happened if you were investing in high yield bonds.

Very high quality bond funds have seen slightly positive, flat or very slightly negative YTD, nothing like a 10% haircut.
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Old 03-25-2020, 03:42 PM   #50
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I'm fine with our cash position, and will always keep 3-4 years that way. And I won't change my overall strategy.

But, I might think a little more conservatively, and take money off the table sooner than later in future highs. Rather miss out on a few extra up-digits for a bit more comfort on the way down. But who knows... ask me in 5 years!
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Old 03-25-2020, 03:46 PM   #51
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I viewed Muni bond fund as my "safe" half of 50/50 strategy. Not sure how I feel now. That said the tax harvesting I did turned out to be a bad move as most market timing has, as said fund has made a nice come back in last two days.
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Old 03-25-2020, 06:27 PM   #52
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Well into retirement (74; wife 73) I'm just going to change the way I look at things. At the market peak I was sitting at 48/48/4 with a minimum fixed income dollar floor and international just under 25% of equities. My intent, based on an investment advisor recommendation, was to get the equities to 50% at some point when I could buy on a dip (without breaching the FI floor). After the BIG dip I'm now sitting at about 40/56/4. I may throw a little bit more into equities but I think I'm going to pretty much stop thinking so much about my AA going forward. As long as I maintain my FI income floor I'm just going to let equities do what they're going to do so long as they fluctuate within the 35%-50% range. I hope they'll all end up going to my kids or charities anyway. Thanks to pension/SS the FI floor should be sufficientfor any needs we, or either of us alone, will have for the next 20 years or so (and I really don't think we'll be around that long anyway).

One other thing: after the crisis is over I'm going to reconsider whether Total Bond is the right bond fund for our IRAs or whether a Treasury fund would better meet our needs.
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Old 03-25-2020, 07:14 PM   #53
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I may make some changes. In February, at the height of the market I decided to change our 55/45 allocation to 50/50. We had been at 55/45 for almost 10 years and DH (72) and I (65) are older so it made sense to reduce it. One way I did it at the time was that I decided to sell our International Fund. Part of that was desiring tax simplification.

We have most of our money in 5 types of funds (split between Fido and Vanguard).

Total Stock Market
Fido Mid cap (about 15% of portfolio)
Fido Small Cap (about 7% of portfolio)
Wellesley (about 18% of portfolio
Total Bond

Anyway, I think I will get rid of the Mid Cap and Small Cap funds and just stick with the Total Stock Market. Those funds have gone done more and I don't feel that for us we get all that much benefit from them. I may look at the bond food and consider whether I should make some modifications there.

I may also switch to 45/55 but haven't decided yet. We'll see.
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Old 04-03-2020, 07:45 PM   #54
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could be or couldn't be a good thing...
JC Penny Corporate Bond is showing Ask Yield to Maturity and Ask Yield to Worst of 543.5% and its maturity date is 6/1/20... cost basis as of tonight $54.66 cusip 708130AD1 lots of trading activity I have no personal gain for this particular company... just thinking it interesting due to the times we live in...
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Old 04-03-2020, 08:19 PM   #55
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I feel like I am writing this on a ton of threads on even more blogs.
....but
Setting ones AA should not mean (imho) that one ignores everything happening.

Bank of America today released the “most pessimistic “ s&p 500 forecast for 12/31/2020 yet. You know what it was? 3100 and lowered to 2600.
That means not one person asking for your money thinks the stock market might decline from current levels. Every single investment banker says the stock market will be higher on 12/31 than it is today!

These bankers take people for fools!

All I know is the market is priced today at about 20x 2019 earnings. Those earnings won’t be back until 2022 at the earliest and maybe a long time later.

No one is looking out for your interests more than you!

In my 30+ years of investing I have never seen a clearer bearish outlook with all the professionals forecasting steady to sunny outlooks. Ever. And I mean ever!!

It makes me very very disgusted with the money management profession.
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Old 04-03-2020, 08:32 PM   #56
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for some reason I all ways day dream that some bankers are just sitting in their office buying up targeted stocks all week long to drive the prices up... and its the Fed that tells the bankers here is the money now go and prop up the DOW.. or the Bond Market... I have actually witnessed bond traders buy and sell $millions of bonds during a day and I watched the prices being propped up... who else besides bankers pumps stocks/bonds like that... its rigged to a certain degree... the Feds and the bankers will pump the markets again before the end of the year... if they can't then we got some big big problems...
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Old 04-03-2020, 08:37 PM   #57
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I feel like I am writing this on a ton of threads on even more blogs.
....but Setting ones AA should not mean (imho) that one ignores everything happening.
I've written similar. Can't always keep it straight in my head if I've posted a thing here already or not. It's getting all run together. So consider this a running apology for sounding repetative.

Finding that AA and "risk level you can live with" is in fact sold everywhere as being designed specifically so you can ignore whatever. To me it's designed to work under "normal" conditions. "Normal" is defined by & as everything that has happened in the past. Everything we know and can know.

Today is not "Situation Normal." It is Terra Incognita. That doesn't mean it will necessarily be the worst trip ever. But you can't say you "know" your AA "will" handle it because you are comfortable with the perceived "risk". And that's all it is. Perceived risk. Set your course and steer the ship with that in mind.
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Old 04-03-2020, 08:40 PM   #58
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I like to read about opinions but don't expect them to direct my process. Hard current data and historical data are the only things that matter.

Trailing PE's are interesting but future PE's are more relevant. However, we don't have anything but other people's estimates and how do you estimate with a pandemic going on?

I think a lot of the somewhat rosy outlook is wishful thinking or just for public consumption to show a positive profile. Some think it is somewhat immoral to sell in this atmosphere.

The market pricing will reveal what is really happening. What matters is what people do in the privacy of their computers.
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Old 04-03-2020, 09:04 PM   #59
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I'm not changing my market strategy. I avoided equities for 30 years and will continue to do so. I am keeping an eye on the government corporate bond buyback program. It is providing some stability. I will stick to investing in corporate bonds of stable well managed companies in sectors that have a future and CDs. I will continue to time my corporate bond/note purchases as I always have. I have 30% in cash and 70% corporate notes. My sector allocation will continue to focus on semiconductors, storage, telecom, telecom equipment, pharma, e-commerce, biotech and avoid the rest. I dropped financials from my sector allocation after reading about bank exposure to oil and gas derivatives and the CBOE waving the reporting requirements to several major banks on a temporary basis and their exposure to consumer and small business credit.

The $350B allocated to small business assistance will evaporate very quickly. It's unclear how much due diligence banks will do if they bypass the normal SBA load process and rush the money out. I would imagine that a large percentage will be lost to fraud.
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Old 04-03-2020, 09:23 PM   #60
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Full auto since 2006. Since my target retirement is about 50/50 and I'm over 70 my RMD was jan/feb before the drop. And we canceled travel planned travel so far this year.

Sanity being overrated. Male. Not football season and staying at home.

Bought a little Vanguard Total World Stock Index and Berkshire B. Trying to keep a grip, only a few 'good' stocks mind you, but the lust is building.

heh heh heh - I really would like to figure out how to take it with me.
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