I did the same, a good chance to reallocate out of some funds while avoiding a huge capital gain and putting the money into funds with more growth potential. Also did some Roth conversions. Worked out great so far...
How do you feel now? (4 Months later)
- Thread starter TechLead
- Start date
I did the same, a good chance to reallocate out of some funds while avoiding a huge capital gain and putting the money into funds with more growth potential. Also did some Roth conversions. Worked out great so far...
I keep a little journal on market thoughts, retirement thoughts, healthcare, etc in my retirement spreadsheet. If I learned anything is that my target 60/40 portfolio (+/- 5pts) is pretty conservative related to my appetite for risk. It was at ~66/34 at the end of Feb, but I kept thinking there would be a pullback and rather than pay taxes on cap gains I just let it ride. At the valley in March I was down to around 55/45. I added some cash to the kids 529s and set up Custodial accounts for them. My Hawaii rental income dried up with the COVID restrictions so my cash pile came in handy and I didn't stress about my positive cash flow going negative. My plan for this year is to roll another chunk of my 401k and backdoor it into my Roth in November. If Biden wins, I may be more aggressive with the amount I backdoor into my Roth and rebalance this year to pull in cap gains.
PointBreeze
Recycles dryer sheets
+1. Thinking in terms of buckets helps me relax, and I took advantage of the ‘sale’ in March. The mind trick really works.
L Carlisle
Dryer sheet aficionado
Very interesting topic.
Thanks for all the comments. I am retiring on September 1st and my wife and I are 56. We are really looking forward to retirement. I let our money in our IRA's and 401k ride in February. I was contemplating moving them into a money market fund or bond fund but decided against it partially because I was unsure Covid 19 would be as big as it is and we had a big 2 week family trip planned in Germany. I figured I would just cross my fingers and hope for the best. We were in Berling as they started shutting down everything in Germany. 3 days before we came home they discontinued all nonessential travel from Europe to the US. It was a really crazy time to be in Germany.
Anyways to make a long story short,,, After about a month contemplating moving my money I finally bit the bullet a few days ago. I moved all my 401k into Fidelity's Stable Value Fund and all my IRA's into 80% Bond ETF's. Hopefully I only have to keep my money in low interest bearing funds for less than a year.
Do you have any suggestions? What are you doing and are you concerned about the market with the upcoming election, massive printing US dollars/mass inflation, low bond rates, high unemployment....
Thanks for all the comments. I am retiring on September 1st and my wife and I are 56. We are really looking forward to retirement. I let our money in our IRA's and 401k ride in February. I was contemplating moving them into a money market fund or bond fund but decided against it partially because I was unsure Covid 19 would be as big as it is and we had a big 2 week family trip planned in Germany. I figured I would just cross my fingers and hope for the best. We were in Berling as they started shutting down everything in Germany. 3 days before we came home they discontinued all nonessential travel from Europe to the US. It was a really crazy time to be in Germany.
Anyways to make a long story short,,, After about a month contemplating moving my money I finally bit the bullet a few days ago. I moved all my 401k into Fidelity's Stable Value Fund and all my IRA's into 80% Bond ETF's. Hopefully I only have to keep my money in low interest bearing funds for less than a year.
Do you have any suggestions? What are you doing and are you concerned about the market with the upcoming election, massive printing US dollars/mass inflation, low bond rates, high unemployment....
L Carlisle- I retired 3 years ago at 47. What works for some, may not work for others. I developed my personal plan over many years and came up with a personal Top 10 for a successful Plan:
1) Spend less than you make (LBYM). Document your actual spend for several years to help forecast spend by category.
2) Stick to your plan and review annually.
3) Diversification / Asset Allocation (non-correlated assets. A piece of all markets) 90% of portfolio returns come from this.
4) Keep Turnover low (avoid unnecessary trades- reduces costs, taxes and bad mistakes)
5) Utilize low cost Index funds/ETFs
6) Keep taxes low (Index funds and low turnover are tax efficient, rebalance 1 year +1 Day for LT cap gains, asset location (tax inefficient funds in tax sheltered accounts).
7) Discipline- think long term whent he market goes south and stick with your plan (see #2)
8) Keep it simple, don't get exotic and don't get greedy.
9) Rebalance once per year
10) Keep individual stocks below 5% of NW.
With all the scary news, I try to stick with my Plan on Asset allocation and rebalancing. It makes it easier for me to make smaller moves to rebalance my AA (+/- 5pts from target), than to make big bets with my portfolio picking tops and bottoms.
As far as the election, if Biden wins, I expect tax rates to increase. As such, I would try to backdoor more than planned 401k to Roth conversions this year. I would also likely rebalance my portfolio and incur the cap gains this year versus waiting until early 2021 to do it. That's just trying to take advantage of lower tax rates. I wouldn't change my AA based off Dems/Rep since historically returns are positive under either.
1) Spend less than you make (LBYM). Document your actual spend for several years to help forecast spend by category.
2) Stick to your plan and review annually.
3) Diversification / Asset Allocation (non-correlated assets. A piece of all markets) 90% of portfolio returns come from this.
4) Keep Turnover low (avoid unnecessary trades- reduces costs, taxes and bad mistakes)
5) Utilize low cost Index funds/ETFs
6) Keep taxes low (Index funds and low turnover are tax efficient, rebalance 1 year +1 Day for LT cap gains, asset location (tax inefficient funds in tax sheltered accounts).
7) Discipline- think long term whent he market goes south and stick with your plan (see #2)
8) Keep it simple, don't get exotic and don't get greedy.
9) Rebalance once per year
10) Keep individual stocks below 5% of NW.
With all the scary news, I try to stick with my Plan on Asset allocation and rebalancing. It makes it easier for me to make smaller moves to rebalance my AA (+/- 5pts from target), than to make big bets with my portfolio picking tops and bottoms.
As far as the election, if Biden wins, I expect tax rates to increase. As such, I would try to backdoor more than planned 401k to Roth conversions this year. I would also likely rebalance my portfolio and incur the cap gains this year versus waiting until early 2021 to do it. That's just trying to take advantage of lower tax rates. I wouldn't change my AA based off Dems/Rep since historically returns are positive under either.
Last Tuesday, July 21st, the sum of my investment portfolio plus bank accounts was not just doing fine, but actually totaled MORE than I have EVER had in my entire life!!!!
I think that is pretty doggone cool considering the state of the world, and how the news media seems to think that it will crater the stock market. Seems we buy-and-hold'ers are doing just fine, thank-you-very-much.
Another thing I like about doing nothing, is that it takes very little effort and fits in with my retirement lifestyle and philosophy.
Ruh Roh..... The oracle from NOLA has spoken... commence the market crash.
Dean56
Recycles dryer sheets
- Joined
- Aug 31, 2018
- Messages
- 265
I agree 100%
I didn't sell, I actually bought more stock in early April. Very happy with my decision.
To quote James Brown, “I feel good!” I have had a 60% stock allocation for years. At the beginning of the year I was at 62%. In February I started getting a little concerned and decided to go to a 55% allocation. In March, I did what I do best...nothing. In June I went to a 50% stocks. In 2008 I did nothing but I was still working and still adding to my 401k. Now that I am older and retired I prefer an even more conservative allocation....especially since it makes no sense to me that the stock market is doing so well! Really, my financial strengths are LBYM and doing nothing.
We sold some S&P 500 from our taxable account that had 100% cap gains at the bottom and moved it into Roth 401k, and a bit more conservative. So rode it back up inside Roth space. We missed a few days of gains but no regrets.
I sold some inside my SEP-IRA last month and am letting in sit in cash until we need it.
I turned 59.5 in July so whoo-hooo! The lockbox is open!
We expect the stock market to get in touch with reality at some point. Wall St. is not in sync with Main Street right now.
I sold some inside my SEP-IRA last month and am letting in sit in cash until we need it.
I turned 59.5 in July so whoo-hooo! The lockbox is open!
We expect the stock market to get in touch with reality at some point. Wall St. is not in sync with Main Street right now.
I was one of those that sold some in Feb... MSFT and NVDA. Those that have followed these two stocks know how bad a move that was for me. I should have stuck with my gut.. I will NEVER EVER do that again...
Otherwise I am good.. I moved from very heavy tech to VBIAX to be "safe" as I am planning on retiring soon. I am in QQQ, VGT, some AMZN, MSFT, and a lot of BND, VBIAX. Just in case people wonder ... I probably am at a 5% return YTD (off the cuff).
Lawrencewendall
Full time employment: Posting here.
I don't mind sharing. My situation is different than most. I have other streams of income so I can afford to be aggressive. Here's a look at what I have:
https://docs.google.com/spreadsheets/d/1aQ9NUoCd7RcRssCdxdMTbGRxhDS0TvIjR0h1hjqYCzM/edit?usp=sharing
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As of today, I'm down .11% YTD despite cutting the stock allocation 5% in January and another 5% in February.
I'll take that any day, given the pandemic.
I do need to combine DW's rollover IRAs into one provider, and rollover my 403b to an IRA (assuming this doesn't affect my state employee health coverage). PITA.
I'll take that any day, given the pandemic.
I do need to combine DW's rollover IRAs into one provider, and rollover my 403b to an IRA (assuming this doesn't affect my state employee health coverage). PITA.
pb4uski
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
I'm feeling like I am 4 [-]months[/-] miles into a 26.2 [-]month[/-] mile marathon... and Heartbreak Hill isn't even in sight yet.
NW-Bound
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
- Joined
- Jul 3, 2008
- Messages
- 35,712
How do I feel after 4 months? I feel more melancholy each day, seeing deaths around the world and people's livelihood being destroyed.
About my own financial situation, my stash is still intact. It will have to get really bad before I worry about not being able to afford the bare necessities; most of my money is for the pleasure of counting, as we have enough "stuff" and do not crave anything more.
It's hard to describe, but I do not feel the same anxiety as I did back in the 2000 tech bust, or the 2008 Great Recession. I just feel sad.
About my own financial situation, my stash is still intact. It will have to get really bad before I worry about not being able to afford the bare necessities; most of my money is for the pleasure of counting, as we have enough "stuff" and do not crave anything more.
It's hard to describe, but I do not feel the same anxiety as I did back in the 2000 tech bust, or the 2008 Great Recession. I just feel sad.
atmsmshr
Full time employment: Posting here.
I feel fine for DW and with a rising equity glidepath strategy - which was just plain lucky timing. Up 2% YTD, including withdrawls. Bonds are in FUAMX.
While working with a steady income, held fast at 100% equity during dot.com bust and financial crisis - but it hurt to look at balances back then. Now that we are withdrawing - conservative allocation rules most of the day. Exception - my stock allocation is NEE, to take advantage of Net Unrealized Appreciation capital gains for the next few years and perform Roth Conversions before pension and SS income starts.
However, concerns abound for others in an uncertain economy - both family and community. We are donating to the local food bank, and holding my breath for job security of the kids.
While working with a steady income, held fast at 100% equity during dot.com bust and financial crisis - but it hurt to look at balances back then. Now that we are withdrawing - conservative allocation rules most of the day. Exception - my stock allocation is NEE, to take advantage of Net Unrealized Appreciation capital gains for the next few years and perform Roth Conversions before pension and SS income starts.
However, concerns abound for others in an uncertain economy - both family and community. We are donating to the local food bank, and holding my breath for job security of the kids.
Ncc1701
Recycles dryer sheets
Stayed at 50/50 allocation, many folks underestimate their emotional reactions when the market takes a dive and I think 50/50 helps me avoid that (especially with 4 years left to go until retirement).
I know investment time periods can always be construed to fit an investment advisor's narrative but Blackrock makes an interesting point here:
https://www.blackrock.com/us/indivi...r-education/win-more-by-losing-less-va-us.pdf
I know investment time periods can always be construed to fit an investment advisor's narrative but Blackrock makes an interesting point here:
https://www.blackrock.com/us/indivi...r-education/win-more-by-losing-less-va-us.pdf
My wife and I (62/70) sat tight in March with a substantial portfolio that was 70% stock, 20% bonds 10% cash, and we feel okay with that. With inflation indexed pensions, annuities and social security more than meeting our financial needs, we felt comfortable assuming some risk in our investments. Our portfolio dropped about 10-15% in the spring, which scared us a bit, but had recovered nearly fully by end of July.
That said, we also feel like we dodged a bullet. This economy and pandemic seem an enormous, once in a lifetime, disaster with the market (even if it doesn't collapse) artificially inflated by massive debt and reams of cheap money.
So yesterday we rebalanced our portfolio to 50% cash, 10% bonds and 40% stock (with 15% in international funds as a dollar hedge).
Should help us sleep easier!
That said, we also feel like we dodged a bullet. This economy and pandemic seem an enormous, once in a lifetime, disaster with the market (even if it doesn't collapse) artificially inflated by massive debt and reams of cheap money.
So yesterday we rebalanced our portfolio to 50% cash, 10% bonds and 40% stock (with 15% in international funds as a dollar hedge).
Should help us sleep easier!
ESRwannabe
Full time employment: Posting here.
- Joined
- Mar 19, 2010
- Messages
- 889
I'm substantially better off financially because of COVID.
I have been able to increase my number of shares, in what I held in January (VYM, VYMI, VT), by around 23% so far this year.
At the same time I also have tax loss harvested around a -$50k capital loss I can use for taxes.
I've also lowered my cost basis.
In terms of work its also been great because I've been able to telecommute since April, which has been fantastic. I don't want to go back to working in an office when this is over.
I have been able to increase my number of shares, in what I held in January (VYM, VYMI, VT), by around 23% so far this year.
At the same time I also have tax loss harvested around a -$50k capital loss I can use for taxes.
I've also lowered my cost basis.
In terms of work its also been great because I've been able to telecommute since April, which has been fantastic. I don't want to go back to working in an office when this is over.
Those are some pretty high yields. Nice income stream.
Im fine. Im much higher than where I was before the March breakdown. I sold and bought low. I focused most allocation on small caps when the Dow was 19000-24000, so now that things have recovered .. im moving back most to the s&p 500. Im at 43%-57%, but will probably hit 50%-50% by year end.
CyclingInvestor
Thinks s/he gets paid by the post
Still at 100% equities, sleeping well at night, living on the dividends. No significant trades since 2018, just re-investment of excess dividends. Biggest holdings BEP, BIP.
DrRoy
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
I was down multiple six figures, but took no action. Now I am up for the year. If I had tried to do anything I think I would have been wrong so I am currently rather pleased (and surprised).
pb4uski
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Don't get too excited. The largest of that income stream, CML, is 75% return of capital (principal) and not income. About 72% of the second largest incoem stream, distributions from GEO, are return of capital.
TNSTAAFL.
