How do you feel now? (4 Months later)

[mountainsoft]

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.

 

[Montecfo]

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.

 

[LRDave]

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?

 

[MichaelB]

let’s not ruin the thread with an off topic discussion on corporate tax increases which is not under consideration by legislative bodies.

 

[ExFlyBoy5]

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.

 

[Lawrencewendall]

I'm still plowing money into the market on a monthly basis. I figure dollar cost averaging. Picked up some good deals in Feb and Mar.

 

[rkser]

I did not sell, but bought in Feb & March & sold in June & July.

I am mostly a buy & hold investor but had to sell as my AA had gone up to 65/35 as the Market recovered. I am presently at 57/43 & gradually working my way towards my intended AA of50/50.

In the process of selling the long term shares at a cap gain of 15%, I overshot & my income for 2020 is greater than I want it to be. It has messed up my plans of Roth Conversion & will probably pay a Medicare Premium Surcharge 2 yrs from now.

Profits yes, but this buying & selling spoiled some other financial aspects.

Oh well........

 

[RobLJ]

I had decided to further reduce risk/allocation in a glidepath (from 60 to 50% stocks) since it's 4 years until SS full, but I did that in January, then lightened up more in February (down to 45% stocks, given reports in Wuhan, Italy, and NY).

After that I bought some back in early March to get up to 43% stocks, then trimmed some in late March and early June, back to 44% and skimmed gains.

Bottom line is that I'm .25% below the portfolio level as of January 1st and ecstatic I avoided the worst, given that the next 4 years is the real trial until I start drawing SS (DW is 4 years later). I don't see corporate earnings recovering for 3 years (or more), but what do I know--nothinks?
I'll keep the allocation between 36% and 45% for the next year; going below 40% is my trigger to buy although I will buy some international stocks soon since they are dealing with COVID comparatively better.

If Gold/Silver corrects, I'll buy more. I'm sitting on a s**t-ton of cash, more both absolutely and in terms of allocation than I ever considered, but bonds aren't exactly attractive unless you figure in negative yields (which are quite possible, admittedly). Enough cash for 6-10 years of withdrawals, depending on conservative or free spending levels (latter is unlikely until international travel is safe.)

 

[RobLJ]

I did do a lot of tax loss harvesting in CEFs in the brokerage account in late March, but that's only about 7% of our portfolio. I invested in somewhat similar CEFs, with some differences to avoid (I think) investing in essentially similar CEFs. The recovery has been nice, but I"ll probably cash out some of the ones I didn't touch to harvest gains. It will make using the cash there over the next years non-taxable since I'll be selling gains against losses. (I dump the yearly withdrawal in there, mostly in short-term bonds, but there are also some CEFs in different sectors, enough for almost 2 years of spending).

 

[unclemick]

THE END IS Coming!! I've heard they canceled pre season football. At belly button 77, 27 in ER years, I bought some global stock index and Berkshire B near the last dip.

My Target Retirement has shifted from 60/40 to 40/60 over the years so after my best pals at the IRS get their RMD cut, I'm spending the excess that no longer goes to entertainment, dining out or travel on 'a few good stocks'.

Looking at stock held by psst Wellesley, dividend kings and Motley Fool Advisor.
Will be spending hand over fist going forward.

Heh heh heh - unless football - college or pro shows up. Then I may moderate. Or not.

 

[FI_RElater]

...glad that we just recently reduced our equities after seeing this!

I feel a lot better about having very little in equities now.

OH NO!!!!
(not the dreaded "wheeee..." from W2R)



We had slightly reduced equities in NOV, stayed the coarse earlier, but when it did regain it's level recently we further reduced equities. The prospects, not just disease but also the end of the increased unemployment benefit, the difficulties of small businesses, and the end of the eviction moratorium (among other items), made the prospect of further increases in our mostly service driven economy an unlikely prospect. We really haven't seen the full brunt on the economy and it might not be very pretty.
we don't need to be aggressive, or even be moderate, in our portfolio to meet our needs/wants, and our recent spending certainly hasn't even come close to what we were planning on.... so why take an unnecessary chance. We won't make other moves back into anything (domestic or international) until after the new year

 

[Golden sunsets]

We have always held steady with our Buy and Hold, rebalance periodically, rinse and repeat investment philosophy. We held steady in 2000 and 2008 and continued to invest. This year I inherited a portfolio equal to 12% of our own investmentable assets. The funds were transferred to my account on 2/28. I liquidated all but 16% of the new assets, as 84% of the funds weren't compatible with our index fund portfolio. Rather than reinvesting all of the funds, I took approximately 25% of the new cash and added to our index holdings. The remaining funds (roughly 60% of the inheritance) is now sitting in a bunch of no penalty CD's, waiting for an entry point or other decision on how to deploy this money. This realignment has had the effect of reducing our Equity allocation from 51% equities to 45% equities. We have way more cash than I want to have but bond rates are abysmal, so we sit with a ton of cash in lowish yielding money market/CD's.

I vasilate back and forth on whether we made the right decisions back in March, but we are comfortable with our current situation. I can see a market drop of some significance in the near future, but who knows.

 

[Vincenzo Corleone]

I sold a bunch of equities in late February. Still at around 40%. Feeling good. I'll put money back in when the following happens:

- There's a vaccine available for Covid-19 that proves to be safe

and at least one of the following:

- Stock valuations become more inline with reality, whether due to stocks declining, corporate earnings rising or both

- The Fed stops manipulating the market to the extent they are

 

[teetee]

I feel jaded, and sorry for the unlucky one who got fired, sick, and died from the virus in the US. I feel angry towards those who (still) do not understand or refuse to accept the fact that the economy is only possible with a healthy population. The shortsightedness and ignorance of those have caused lots of casualties because some cannot take the virus seriously. You can follow the most restricted guidelines but still possiblely get infected from the selfish people since we all breath the same air.

I am sure things will get even worse once the remaining states reopens and kids are forced to go to school in the fall. How can it not? [mod edit]

Aside from being frustrated. I am mostly fine. Still live way below my means with ultra high saving rate and walk on the bikepath with the masks on on early mornings during the weekends. I can use some new hobby to distract me from all the negativity and stupidity of this country.

 

[Livefree]

We hung on and didn't make any changes. Last week we hit an all time high.

 

[thepalmersinking]

Sold all corporate bonds funds and reinvested in individual blue chips. Worked out awesome thus far. The thought that corp bonds is safe is just a myth. If i am going to take risk in corp debt, I might as well own the security that provides a div, allows me to participate in upside and can sell covered calls against.

 

[ikonomore]

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.

Why go to almost all cash if your pension covers everything? Why not just a percentage say 20% so that would cover any future unexpected expenses?
Just wondering.

 

[tdv2]

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.

Your statement about How long it will be before you get back in reminds me of and old saying....”The best time to plant a tree was 20 years ago, the second best time is now.”

 

[bigcmagor]

Your statement about How long it will be before you get back in reminds me of and old saying....”The best time to plant a tree was 20 years ago, the second best time is now.”

Using this analogy, I plan to invest in public companies again once we determine how much of the tree has been hollowed out by current events. Many seem to believe that there's been no damage by the colonies of termites we've turned loose on the tree.

 

[racy]

I feel great! I rode out the turmoil (as I have all turmoils since 1976). The portfolio is at it's all time high. But, I also know it'll dip again, maybe drastically. Won't bother me.

 

[Mr. Tightwad]

Didn't sell anything.
Bought SBUX at 54 and SPG at 50.75 in March.

 

[RVplusDog]

I sold a bunch of equities in late February. Still at around 40%. Feeling good. I'll put money back in when the following happens:

- There's a vaccine available for Covid-19 that proves to be safe

and at least one of the following:

- Stock valuations become more inline with reality, whether due to stocks declining, corporate earnings rising or both

- The Fed stops manipulating the market to the extent they are

Re: the vaccine front - I just read this article this morning: it was a good overview of the challenges in developing an effective vaccine in the near term. There are some really good white papers & scientific researches linked within: https://seekingalpha.com/article/4361321-pfizer-biontech-covidminus-19-vaccine-reality-check

 

[RVplusDog]

Didn't sell anything.
Bought SBUX at 54 and SPG at 50.75 in March.

I sold some index funds, and got a bunch of Pfizer at 28, HD at 179, Alibaba at 186, etc. Lots of good quality stocks were on sale .

 

[MrsHaloFIRE]

I dirty market timed out and back in. Profitable. DH kept some of his out as hedge. We weren't living in on any of it prior or now. Almost recovered despite the new cash position. YMMV

 

[harllee]

I sold a bunch of equities in late February. Still at around 40%. Feeling good. I'll put money back in when the following happens:

- There's a vaccine available for Covid-19 that proves to be safe

and at least one of the following:

- Stock valuations become more inline with reality, whether due to stocks declining, corporate earnings rising or both

- The Fed stops manipulating the market to the extent they are

Vincenzo, good advice. I am writing these 3 points down and putting them in my financial file.