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Old 04-03-2020, 09:38 PM   #61
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We have 5+ years of cash and not have to touch our equities (which were only around 35% of our assets when this started) for at least that long, so no changes. As I told DW, "the only ones being impacted by these losses are our potential heirs".
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Old 04-03-2020, 10:27 PM   #62
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From a high level point of view, I have not made any changes to my strategy. I am still LTBH, low-cost, high-quality stocks and bonds in an AA that reflects the historically highest SWR for my 40 year planning horizon.

I have stated publicly several times my intent to move from about 93/7 towards 97/3 during a downturn; I moved from 93/7 to 95/5 over the past few weeks.

There have been some minor things I've done that were not in my plan before and are not just about investment strategy:

1. Based on what I remember people here saying during the 2008/2009 downturn, I chose to reserve/buy some trips for later this year when they were on sale.

2. I chose to do about half of my Roth IRA conversion a few weeks ago.

3. I'll probably advise my Dad to suspend his RMD payments for 2020 now that the CARES Act is law. It also may make sense for him to do some Roth conversions this year as a semi-related consequence.

4. I'll likely advise my 20DS with an eye towards him not qualifying as my dependent for 2020 in order for him to be eligible for the stimulus tax credit.

I will add that even as I am confident that what I'm doing is the best for me and my family and even as I am very optimistic about the future, in times like these I still get a little nervous/afraid/queasy.
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Old 04-03-2020, 11:54 PM   #63
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No, we went to cash in all accounts completely in early January and will stay there until this resolves. We do not need or use our investment money as it turns out our pensions are about 40% higher than our expenses. Because there will be no travel this year we will save roughly $60k in travel expenses which is a bonus as we had 5 trips planned (and paid for). We have the buffer should we need unexpected medical expenses this year.

With the dollar so strong now we may do some purchasing here in Hungary of some luxury items like a new car or some upgraded sails on my small yacht. But, at the moment cash is king and other than Day Trading on the market we are staying put for as long as necessary. We (my wife not me although I watch and advise if she asks) have made 20% now since January just dipping in and out as the market is so volatile now it is easy pickings if you have the patience and fortitude to time it out well. I do not but she is a genius at this and has a 6th sense of market timings mostly as she only trades a few stocks and recognizes the patterns the algo traders are using. However, we still go to cash every day and never use margin or hold anything overnight.

I think until the crises ends and/or completely collapses we will stay like this. There is no good news at all yet the PPT is trying desperately to support the markets with helicopter money. It will not end well as things will get worse not better for at least 2 more months. This crisis has revealed all the weaknesses in the American economy and things are changing rapidly in the world. Maybe this will force some much needed changes to the US financial system and at a minimum put back the Glass-Steagall regulations removed under Clinton which set us up for this crisis in the first place and wasn't fixed after 2008. It is going to take a major collapse for our current Congress to try fixing that again.
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Old 04-04-2020, 12:20 AM   #64
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No.

Age: mid to late 50’s.

Pre-virus AA roughly 65/34/6.

Last week, we started to invest some of the cash in Vanguard equity ETFs; primarily non-US (largely for equity diversification reasons). And each month, as we have always done on a set schedule for nearly 35 years, we continue to invest new funds in the market. Except for our once-a-year rebalancing, we have literally never sold anything for purposes of “cashing out” or fleeing to safety at any time over those 35 years.. I actually find a down market to be a reassuring reminder that, well, markets go up and down. They always have, and always will. My brain may be wired differently, but I find it reassuring that the bear is here again now. It was always out there in the woods; and now, yet again, it has wandered closer to the homestead as it does from time to time.
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Old 04-04-2020, 04:58 AM   #65
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These bankers take people for fools!

No one knows.... especially under these circumstances. -I see the drop as purely speculative as until the virus is on the decline and we see what happens we don't know squat how earnings will rebound. I don't know of anyway to rationally value anything at the moment.



I could see a quick rebound possible as pent up demand jump starts the economy or we could have just made a new generation of frugal folks (like me?) that are going to save and increase spending very gradually. I could also see the government enacting more and more policies to protect us/the economy that do more harm than good. Certainly there will be some long term shifts in consumer, business, and maybe (but unlikely) investor behavior.


Personally, staying 100% equity for my investments and am adding to my position monthly as I continue to work and I pay off a 401K loan, contribute to the 401K, contribute to my Roth IRA, and contribute to my HSA (also DCAing more of my HSA balance into equities from cash as it was about 60% cash). Most of after my take home pay I am keeping as cash as I build funds to pay for my first couple years living expenses after FIRE (will quit once I feel a bit more confident we are on the other side of this fiasco and if my portfolio will support at that time... still hoping for late 2020).
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Old 04-04-2020, 05:38 AM   #66
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We are currently 50% cash and 50% Wellesley Income. I will deploy the cash as we move through the current environment. Having run several businesses before retirement, it will be interesting to see how this all resolves itself we are in uncharted waters. A recession was coming, the virus, then shutdown are going to make it far worse. The longer the shutdown drags on the more psychological damage is being done, which is not good for a consumer society. I think we are in a "humpty dumpty" world which won't resolve quickly. I hope to be wrong.
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Old 04-04-2020, 05:56 AM   #67
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I change my mind frequently. But I'm smart enough not to follow through on it.
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Old 04-04-2020, 06:08 AM   #68
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I have been out of equities and bonds since September 2018 due to big changes in personal circumstances. I was looking to get back in this year but didn't expect to get an opportunity to re-enter the equity market below where I exited (last year was tough, being forced to sit on the sidelines while the market was melting up. It felt like I was missing out while everyone else was partying). But now it is not easy to let go of my big pile of cash. The rest of my stash is invested in rental RE and, with so many people losing their job, things look a bit bleak there too. I'm probably going to slowly get back into equities over the next few months, and perhaps accelerate the pace a bit if the rental market looks like it's gonna hold (as I can live on the rental income alone if need be).
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Current AA: real estate 64% / equities 10% / fixed income 16% / cash 10%
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Old 04-04-2020, 06:12 AM   #69
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Staying the course 60/40. The question for me is when to adjust back to those levels. I sold a few bond fund shares and bought equities last Monday but Im currently still at 56/44. I usually only move when things are five points or more off my levels.
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Old 04-04-2020, 12:06 PM   #70
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Our target was always 60s/40b, but generally runs 63/37 - which we rebalance with our withdrawal selection. Now were at about 55/45, and considering a rebalance. Might wait a week or so and see what happens.
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Old 04-04-2020, 02:07 PM   #71
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I have made a bunch of adjustments - reallocated from an overweight fund that I couldn't do at the peak as the cap gain would have been ridiculous. I also did some Roth Conversions. Finally, I reallocated my retirement funds to slightly more aggressive picks to hopefully catch a bit more of the upside swing when it occurs.

Since I have enough cash to ride this out for a long spell and enough other income generating assets (as yet un-impacted but we'll find out this month when rents are due) to cover way more than my living expenses I can afford to be a bit more aggressive and see how it comes out on the other end.

Living overseas and lowering my COL expenses dramatically also helps. If I was still in California I would be in a very different situation I guess...
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Old 04-04-2020, 02:16 PM   #72
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No change in my tactical AA method. If anything, I regret not being more aggressive in adjusting my AA according to the market condition.

I used to run a stock AA of 70-80%. In Dec 2019, I cut back to 60%. Currently at 53%.

At some point, I will ramp up to 70-80% stock again.
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Old 04-04-2020, 02:31 PM   #73
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This is great time to do your pickings. It's time to buy on sale so I'm trying to catch falling knife mainly dividend ETFs. Energy sector looks very appealing.
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Old 04-04-2020, 05:15 PM   #74
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^^^ I dunno. I will be buying at some point, but not anytime soon. The impact of frozen business activities has not been fully felt.
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Old 04-04-2020, 11:45 PM   #75
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Pre virus AA was 45% equities

Staying the course, no changes planned.
Might fire some powder if we see an additional 20% or more drop in the market. Still planning to buy an additional home this year or next.
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Old 04-05-2020, 06:09 AM   #76
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Will get back up to 80/20. Was 95/5 until 2/4 when I sold to get to 60/40. On 3/31 i was at 50/50 due to the decline. I sold another chunk, so Im at 35/65 currently.
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Old 04-05-2020, 06:39 AM   #77
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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).


Ditto. I am willing to give up a little faux yield for real safety.
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Old 04-05-2020, 12:32 PM   #78
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Nope, using the Bogle model during these uncertain times, stand there and do nothing.
Ditto. I've been retired for a few years and haven't drawn down yet due to making some money on the side. Our AA has been ~65/35 index funds give or take.

What has helped tremendously, since retirement, is having 2-3 years of expenses available in cash. That money is used for my side business and to fund checking accounts for sign up bonuses. That helps offset the opportunity cost of it not being invested. Be able to sleep at night and not worry though is priceless.
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Old 04-06-2020, 12:17 AM   #79
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If you plan to change, what was your strategy before and what changes are you planning to make?

From an overall strategy perspective, this downturn has reinforced that my "income strategy" is the one that works for me. It is the strategy that I am comfortable with and can sleep well at night relying on.

My overall strategy is that every asset I buy needs to generate income (with an emphasis on dividend growth) and that my withdrawal strategy does not rely on capital gains.

However, this downturn has made me tweak the specifics a little bit. My largest and main assets still consist of dividend growth stocks, but I have made some tweaks.

* Consistent foreign dividend growth ETFs are non-existent. If you want any consistency at all you will have to buy individual stocks. Alternatively, I am just going to decrease my weight in Foreign stocks and rely more heavily on the US. No more 50% foreign stocks for me. Foreign stocks will be around 10%-30% range, and added only for diversification, and done with the understanding that the income is not reliable.

* For US dividend growth ETFs, no more trying to find the perfect ETF to use. There are a lot of different dividend growth strategies available. The best thing to do is use them all.

* I have found that "covered call" ETFs are a great compliment/addition to div growth ETFs. The income goes up during crisis at the expense of doing not as good during bull markets. Hence, a great counterbalance to div growth ETFs. The best covered call strategy in particular are those based off of the Nasdaq. In particular I like ETF QYLD. For CEFs I like QQQX, STK.

* When it comes to div growth ETFs I have a strong preference for monthly income payers. In particular I like ETFs DGRW, DTD, DGRS, DHS, DON, PEY, SPHD, QDIV.

* Other good div growth ETFs I like: SCHD, DGRO, VIG

* Broad market ETFs can make great div growth assets. The total stock market ETF VTI has a fantastic div growth record, better than most div growth focused ETFs... Funny enough, at the same time a lot of div growth ETFs have better total returns than VTI...

* Stay away from the super high yield areas like MLPs, Mortgage REITs, and BDCs. They aren't worth it.

* Stay away from Exchange Traded Notes i.e. ETNs. The acceleration clauses on these will destroy you in a down turn.

* When it comes to CEFs stay away from the "fund of fund" CEFs like FOF, and ETFs PCEF, YYY, ALTY, etc. When it comes to CEFs you have to be extremely selective. Most CEFs are poorly managed and basically "sucker yields" to lure in the naive.

* Some CEFs I do like: HTD, UTG, QQQX, STK.

* Most debt ETFs are garbage for income. You will get declining income every year. When it comes to debt the only ETFs I still like are Senior Loans (in particular ETF SRLN). For other debt, I think you need to buy individual bonds or don't bother.

* Debt has actually become a place to invest for capital gains, not income....

* Consider taking a gamble on 3x leveraged Nasdaq ETF TQQQ once it feels like we have hit bottom.
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Old 04-06-2020, 12:53 AM   #80
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Another comment on my 3x leveraged Nasqaq idea...

So to implement this you start off with:

1/3 TQQQ and 2/3 Cash

This is equivalent to holding QQQ un-leveraged.

Now... once we start to turn around you start to ease up on the cash side a little at a time, i.e. you start dollar cost averaging out of cash and into TQQQ.

If things reverse you start backpedaling the other way.

I don't think we have hit bottom, but I do think we are down enough where its worthwhile for me to put some new money into this gamble. If I can come out of this downturn with a descent amount of TQQQ its a good gamble.
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