How Far Will You Ride This Market UP?

[Alan]

I'm not sure if this was sarcastic or not, so I'll assume you are asking in a nice way. If the market advances over the next few years both the BH and MT parts will grow beyond my upper bound on equities. So for book keeping purposes, I'll sell some of the BH part along the way (and buy fixed income) while letting the MT part expand. If there is an MT sell signal then that will go into short term fixed income.

So maybe the BH/MT starts out at 35%/20% and becomes 30%/25% when an MT sell comes along. In that case if we have an extended market decline I'll still have 30% in equities. The MT approach I use has only a few trades per year on average.

Well, at least it's a plan with some well defined rules of engagement .

It wasn't meant to be sarcastic - I just couldn't resist - thanks for the restrained reply .

I see that you are talking about years which explains a lot. I assumed the OP was talking about weeks or months since the Market dropped over 50% in 12-14 months and then 2 days ago was up 20% on the year.

 

[DblDoc]

As others have said, I'll be riding it up and down, rebalancing as indicated by my predetermined bands. I have a preset glide path towards estimated FIRE date for gradually shifting my AA towards a 60:40.

DD

 

[toofrugalformycat]

I don't plan to sell equities until I get up to my asset allocation of 55% equities/45% CDs and treasuries.
I'm still buying equities verrryyy sloooowly, auto scheduled, most days of the week.
But then before this wild ride, my target AA was 60/40, so I guess IF it comes back up, I'm not really riding it quite all the way to the top.

 

[donheff]

Like others, up and down. I don't have a clue about when to get out. I will keep an eye on those inflation protected SPIA's for a good rate

 

[ejman]

I use a wide range for my target allocation: Equities from 50-60% do nothing. I sold some equities back in early 2007 (no didn't get the peak in October) since it quickly went over my 60% upper limit in early 2007. I was wondering if I would have the guts to actually increase the equities allocation if my AA dropped below 50% but it started going back up after hitting a minimum of 52.7%. So, in answer to the Op, I'll ride up until my AA goes over 60% and then start selling as I've doing for many years now. (ER'd in December 2002). That works for me

 

[Gone4Good]

I'd be tempted to "Sell in May and go away" if the SPX is above 900 in a month or so. I'd do that with the intention of getting back in at lower levels. I probably won't though because I have no idea if we'll actually see lower levels.

 

[freebird5825]

My hands are firmly on the bucking bronco's reins..nice horsey...
I think when I'm past 55, I'll be stricter with myself regarding the ol' "age=bonds" rule.

 

[clifp]

I'll re-balance at S&P 1000. As part of that process I'll take 100K and put it into a CD ladder.

 

[haha]

I'll re-balance at S&P 1000. As part of that process I'll take 100K and put it into a CD ladder.

Will this be a dial-down of your equity allocation, relative to October 2007?

Ha

 

[audreyh1]

I rebalanced on the way down. I'll be doing the same on the way up. Ad nauseam.

Audrey

 

[Bikerdude]

I'll re-balance at S&P 1000. As part of that process I'll take 100K and put it into a CD ladder.

I'm going to do the same but at S&P 999. It will be a reduction in equities from 09/07. However, I will sleep better with the additional 100K ladder.

 

[audreyh1]

As of this Friday, our net worth broke even with when we retired in August 1999. I guess anything above this is gravy? It's not like we didn't spend a bunch of money in the last 10 years.

Audrey

 

[kcowan]

Us too. We are ahead of our portfolio in Aug 2002 when we ER'd and we have drawn down $300k during that period. All that other stuff was just numbers on paper...akin to "Oooh my house is worth $2 million, but I can't spend it..."

 

[unclemick]

A tad north of 4% SEC yield wise( handgrenade close to the mythical/magic? 4% SWR number).

The Norwegian widow smiles - and no I'm not gonna say pssst - you know in this post.

Snowing north of Kansas City.

heh heh heh - I'll spend more come summer. .

 

[Lsbcal]

For those of you who are ahead of your original retirement portfolio, did you inflation adjust the numbers?

After inflation adjusting my Apr 2003 retirement, we are -14% below the starting portfolio. At the end of 2007 we were +19% ahead. If that number gets as positive as 2007 again, it will be a big signal to me to get more conservative.

 

[unclemick]

For those of you who are ahead of your original retirement portfolio, did you inflation adjust the numbers?

After inflation adjusting my Apr 2003 retirement, we are -14% below the starting portfolio. At the end of 2007 we were +19% ahead. If that number gets as positive as 2007 again, it will be a big signal to me to get more conservative.

Since Jan 1, 1993 the answer is no. Adjusted spending(sometimes aggresively) based on portfolio value and other factors - sold some RE, some temp work, small non cola pension 1998, early SS 2005 and spent more post Katrina(2006) to resettle.

My goal posts nowadays are 5% variable to SEC yield of portfolio ballpark 3-5% range of total portfolio value.

Right now with Mr Market being a meany - running a tad over 4% SEC yield on portfolio.

And I'm under spending cause the weather sucks - and the trip list for summer hasn't been finalized yet.

heh heh heh - I wasn't called a 'cheap bastard' in the early days of ER for nothing. 16 years into retirement - I'm a little more relaxed, confident and less er ah 'frugal?'

 

[tryan]

I am "all in" ... the low needs to be tested (that will be hard to watch). But as I said I am "all in".

 

[Dennis]

Only until get back to Even, then Rebalance and Go from a 60/40 mix to a 20/80 mix
But, If we have another " Carter Yrs of Very High -30 Yr Long Term Treasuries"?
I will sell everything and buy them at my nearest Fed. Res. Bank..
Might even Max out my Credit cards and Get a Mort. on my paid For Home if I can.

As you can guess, Retired and Hoping for Hyper Inflation..Berneke will go after it Like a Duck On a June Bug..

Imagine 10-12% 30 yr LT Treas.....mmmmmmmm Droollling..
It would sure help Seniors and Rebuild The Fla. Real Estate Condo Business!

 

[Grep]

As you can guess, Retired and Hoping for Hyper Inflation..

This is a baffling wish that I think retirees would severely regret experiencing. But with a little bit of luck, it hopefully won't come to pass.