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Old 07-26-2020, 05:25 PM   #61
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Last time I sold shares to put into cash was when my investments were at their peak. I am now about 50% cash (CDs and MM), 35% stock, 15% bonds. Now that may sound a little high for cash to some of you but we are in RMD phase and don't need to rely on accumulation since SS and a few small pensions take care of our needs. House and cars are paid for and medical will never be an issue with Medicare and Tricare for Life. I am not planning on timing the market to buy more shares and selling anymore shares would result in higher taxes for no reason. The money will be a great start to early retirement with a new basis for those inheriting.


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Old 07-26-2020, 05:28 PM   #62
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I sold a bond fund I'd not been happy with in late January. During the market swings, I was able to unload some loser small & midcap funds that had floundered along for some time. Ended up w/ a decent return (miraculously). I'm 45/55 now in my ira with 5+ yrs living expenses liquid in banks. My last CD ladder matures in Oct., so that'll go in the bank also.

Although heavy in cash, I am leery of buying into bonds just now. I'm not sure what the next move will be, but I do not see an economic recovery anytime soon & wouldn't be surprised by a prolonged and deep recession.. I sure do hope I'm wrong about that.

I do have some buy/ sell triggers set up and am watching some funds very closely. If they fall enough, I'll buy into one or more of them.
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Old 07-26-2020, 05:38 PM   #63
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Originally Posted by REWahoo View Post
Hey, I'm doing my best here. Don't go fact checking me and screwing things up!
Someone posted that since W2R posted a graphic and didn't actually type the W word that is didn't count.... I'm not so sure... maybe we'll just get a correction instead of a crash.
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Old 07-26-2020, 05:42 PM   #64
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I suspect people who sold in March expect even larger decline to come. Maybe it was panic selling. From past posts there is fair number of them.

Maybe they are right, maybe not.
While I was willing to do it myself, I wasn't necessarily encouraging others to sell as I recognized that it was possible that I was wrong. I still expect an economic malaise worse than the Great Recession but not as bad as the Great Depression. I'm pretty confident of that. What I'm not so confident of is how significantly that economic malaise will impact the stock market.
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Old 07-26-2020, 05:46 PM   #65
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Yep. The biggest flaw in using so-called "buckets" is believing you're actually doing something different than if you held exactly the same mix of investments but simply tracked your total AA. The fact you understand you're organizing (in your mind) your assets in a way that propped you up in times of decision induced stress, but you haven't actually done anything different with your investments, marks you as "getting it."

I do a tiny amount of so-called bucketing, but mostly for DW's benefit. We have enough cash equivalent funds at our local B and M bank that, when coupled with pension + SS, would carry us for 2 - 3 years. DW manages that and only looks occasionally at the bottom line of our brokerage accounts which I manage with an AA outlook. Keeps her from fretting about market variation. Keeps me from wading into too many day to day budget details.

Probably shouldn't call it a "bucket" approach. More like a tub and a thimble.
Buckets and AA arenít an either or, they are an ďandĒ. They play very well together.
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Old 07-26-2020, 05:53 PM   #66
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Good topic for human psychology. So far everyone says, Ďdid the right thing for meí.
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Old 07-26-2020, 06:21 PM   #67
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we made zero changes in AA other than to do some modest buying of MF (equities). year-to-date net worth is up about 6% over the end of 2019. we're feeling fine but we'll see if it lasts. lots of doom and gloom predictions out there. one of these days one may come true.
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Old 07-26-2020, 06:29 PM   #68
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90/10 here so it was very scary. I am up a little bit more than the start of the virus. I have a safe bucket.
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Old 07-26-2020, 06:34 PM   #69
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I usually feel better when we don't have 10% swings, up and down, over the course of a few days....but that's just me. What strikes me now is the large number of predictions, with almost unreasonable certainty, that the economy will crater. If you are long equities, this should be somewhat comforting. From a historical perspective, when pessimism reigns, future returns tend to be greater. At the end of the day, predicting the short term direction of the stock market is impossible....too many moving parts with no regularity. I will continue to sit on my hands as a result.
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Old 07-26-2020, 06:53 PM   #70
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Wow, 4 pages of replies in one day. I haven't read many yet.

I did nothing. And I feel confused and befuddled about the world and perfectly satisfied with my investment strategy.


Ok I didn't quite do nothing. I was greatly tempted twice to do something active. In March, recently retired with a 2-year cash stash for expenses, I was tempted to "buy the dip" but talked myself out of market timing yet again.

More recently I was greatly tempted to increase my cash cushion to 3 years as I can't understand why the market keeps going up, and I think the market must go down soon and for a long while. I again resisted and stayed the course, but what swayed me this time was realizing that the market could remain nominally good while inflation rises rapidly, in which case more cash is counterproductive. Otherwise I might have given into embiggenning my cash cushion in the guise of safety.

I also sold and bought almost every position I hold, but in an asset-allocation neutral way as I just moved the bulk of my holdings out of open-ended funds and into equivalent ETFs. The primary motivation for this is an upcoming consolidation of assets at one firm and the ability to transfer in-kind.

The only actual change to my strategy was really a realization at a lack of a strategy for a new thing: withdrawals. I had been re-upping my cash cushion to 2 years every month or two while everything went up, but when it went down I realized I had never really thought through the mechanics of when to spend down the cash cushion and when to top it off. I've rather arbitrarily decided that a market level higher than my retirement date (October 2019) I'd top off every month or two, else I'll spend the cushion down. Clearly I'll need to consider this more going forward.
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Old 07-26-2020, 06:56 PM   #71
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I'm looking forward to the return of hockey. I really miss hockey.

Oh, my holdings, you meant? We're up for the year (AA: 65/30/5, give or take). We aren't market timers. Just let it ride.
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Old 07-27-2020, 06:41 AM   #72
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+1

Politics / elections would be the last thing influencing my investment decissions.
Generally I agree. But if a new administration brings an expected large corporate tax hike, stocks will take a large haircut.
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Old 07-27-2020, 06:53 AM   #73
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We stayed the course. Had raised some cash heading into new year, bought when stocks headed down. Have raised some cash again, expect to redeploy soon.

And it has worked out.
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Old 07-27-2020, 07:16 AM   #74
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For funds that track an index, no, fund managers do not choose the stocks. An example is VTI - total stock market. The Vanguard computer systems keeps the relative values of its holdings in line with the pertinent index. More info here: https://investor.vanguard.com/etf/profile/VTI

Similar strategies are followed for other funds and ETFs that are based in stock indices (VOO = S&P 500, for example). Itís my understanding that means that even if known stressors are approaching, the fund holds the stock as long as the index does.

This is one of the reasons that I divested about 75% of my equities from index ETFs in March, before the worst of the drops. Since then, Iíve built my own portfolio up, buying on dips, for stocks I like. Itís a lot of work. Thank goodness for Vanguardís free trades, or I couldnít do this. We are almost back up to our all-time high. I have just over 50% in cash, with limit orders set to execute on any upcoming hard dips. Iím really happy to have such a high percentage of cash at the moment, and I will welcome the addition of high quality stocks to my portfolio on any upcoming dips.
Thanks. Your remedy seems complicated. I have no idea how to build my own portfolio with confidence. Best of luck, looks like it's working for you.
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Old 07-27-2020, 07:25 AM   #75
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Generally I agree. But if a new administration brings an expected large corporate tax hike, stocks will take a large haircut.
I think it is likely that US corporate tax rates will increase some as the recent decrease from 35% to 21% was a bit too much of a drop IMO... but I don't see it going back to 35%.... probably mid-to-high 20s but not more than 29%. But I concede, I know nuttin'.
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Old 07-27-2020, 08:02 AM   #76
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I transferred about 10K from our brokerage account in March, to beef up our emergency savings in case my wife was out of work due to COVID. That never happened, and my own business actually picked up over the last few months, so I have since reinvested that 10K and then some.

We're about 3 years from retirement, so I had already changed our asset allocation to something closer to 50/50 earlier this year. My VBTLX bond fund and VUSTX treasury fund have both been doing well this year, so my current allocation is around 45% stocks, and 55% bonds right now.

Our balances keep climbing with minimal drama which is all I really care about. I was a little concerned in March and April, but we rode it out and are doing fine now.
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Old 07-27-2020, 08:13 AM   #77
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I think it is likely that US corporate tax rates will increase some as the recent decrease from 35% to 21% was a bit too much of a drop IMO... but I don't see it going back to 35%.... probably mid-to-high 20s but not more than 29%. But I concede, I know nuttin'.
Hope that doesn't happen but it likely will. Corporate tax reform fixed a lot of US anti-competiveness. Unwind that and we are back to companies reincorporating in tax havens.
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Old 07-27-2020, 08:20 AM   #78
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Hope that doesn't happen but it likely will. Corporate tax reform fixed a lot of US anti-competiveness. Unwind that and we are back to companies reincorporating in tax havens.
Do you have any citations to support the opinions bolded above?
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Old 07-27-2020, 08:23 AM   #79
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letís not ruin the thread with an off topic discussion on corporate tax increases which is not under consideration by legislative bodies.
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Old 07-27-2020, 08:57 AM   #80
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I was one who shifted to almost all cash. It's been somewhat annoying to see the gains, and while it still makes no *common* sense to me, I am satisfied with what I did and am OK with sitting on the side for a bit longer.

I am quite fortunate in that my mil pension pays all the bills, so unless that goes away, DW and I are able to/can afford to sit out for however long. How long will that be? Well, that's a good question that I don't have the answer to.
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