Is anyone staying the course?

[RunningBum]

Quote:

Originally Posted by Rianne Is anyone completely out of International equities?

I am, mostly because the higher dividends were taking me to the edge of the ACA subsidy, and the uncertainty of how much foreign taxes get added made it tougher. Also I'm building up a large FTC carryover. I may buy back in someday, but probably not for a few years.

[Rianne]

Quote:

Originally Posted by unclemick Vanguard Total World Stock Index is the one I'm planning to dollar cost average excess (not spent) $ into over the next ten years. Heh heh heh - plan vs actual - we'll see. Expect a bumpy ride - more fun than football.

Hmm. 70% of my Roth is in VTIAX, down 12%. The dividends are re invested. I'm a waffler about this and appreciate all the comments.

[Lawrencewendall]

Quote:

Originally Posted by Rianne View Post Is anyone completely out of International equities?

I have some exposure (2%) through some of my funds but I personally believe that the US stock market is the only game in town. Look at other countries economies. We may be hurting right now but the rest of the world is hurting worse. My .02

[OldShooter]

Quote:

Originally Posted by Rianne Hmm. 70% of my Roth is in VTIAX, down 12%. The dividends are re invested. I'm a waffler about this and appreciate all the comments.

Well, the important question is the % of your equity exposure that is international, not what is in a particular account.

Vanguard has published several papers on the international question. I think this one is maybe the most recent: "Global equity investing:The benefits of diversification and sizing your allocation" https://www.vanguard.com/pdf/ISGGEB.pdf

Here is the nutshell version:

"This paper concludes that although no one answer fits all investors, global market capitalization weight serves as a helpful starting point in determining the appropriate allocation between domestic and international equities. In practice, many investors will consider an allocation to international equities well below global market-capitalization weight based on their sensitivity to a number of considerations, including volatility reduction, implementation costs, taxes, regulation, and their own preferences."

[Rianne]

Quote:

Originally Posted by OldShooter Well, the important question is the % of your equity exposure that is international, not what is in a particular account.

Total portfolio, 13%.

[OldShooter]

Quote:

Originally Posted by Rianne Total portfolio, 13%.

Well, 13% of equities is not an aggressive position to be sure. If it's 13% of a 60/40 portfolio then that would be 21% of equities, still not big.

I don't know nuthin' but if I were guessing I would say that there are reasons for internationals to outperform, first being the likely decline in the dollar's value and second being plain old regression to the mean. But those are five- or ten-year horizon things, not a few months' look.

[tdv2]

My current allocation to international equities is close to 35% of my total equity position. When I re-balanced in March I added a slight bit more to this category over domestic equities. I have no idea when international will outperform domestic again, all I know, is that I'll be there when it does happen.

[Rianne]

Quote:

Originally Posted by OldShooter Well, 13% of equities is not an aggressive position to be sure. If it's 13% of a 60/40 portfolio then that would be 21% of equities, still not big. I don't know nuthin' but if I were guessing I would say that there are reasons for internationals to outperform, first being the likely decline in the dollar's value and second being plain old regression to the mean. But those are five- or ten-year horizon things, not a few months' look.

More like 60/37/3 with a five year horizon. I am encouraged by the market this morning. All the opening up videos on the news must have given the market a boost of confidence.

[OldShooter]

Quote:

Originally Posted by Rianne ... I am encouraged by the market this morning. ...

With respect, you shouldn't be. This is just noise. If you want some signal, look only at total return market performance graphs that are three years and longer. For example, the 5 year nominal return of the Dow is about 34% or 6% CAGR. Add in the dividends and i am a happy guy. You should be too. Or maybe a happy girl!

Looking once a year is plenty often enough. We pipsqueek investors are wood chips going over Niagara Falls. The ride is exciting but inconclusive, giving no clue to where we will be in a year or two.

[nvestysly]

DW and I fall into the staying the course category. We did purchase a few shares here and there since things were on sale recently but nothing that moved the needle much. Similarly, we're not selling much because prices are depressed. We check our strategy from time to time (several times a year) and I update a spreadsheet with our dividends, etc. several times a year. Not much change in holdings since we retired almost 9 years ago.

[ER Eddie]

Stay the course. Thousand points of light.

Sell my stocks?

[Lawrencewendall]

Just a side note but DW is doing her part in supporting the economy by online shopping. No dry powder here.

[smoghat]

I swear I posted here, but it’s gone (?) or maybe I didn’t. We are still 85% in US equities, 10% in bonds and cash, 5% in time-based 529 plans. Down 10% on the year at this point. No big deal given what it is. In fairness, of my equities, 20% or so are consumer staples and those are performing as expected, in other words, down less than the rest of the market.

In the end, I haven’t lost a penny since I FIRE’d in 2016. Moreover, since then, I’ve lived like a king. I’d still be way ahead of the game if I wasn’t such a glutton over the last four years.

[targatom2019]

Quote:

Originally Posted by vipertom1970 I was 60/40 for 7 months before the crash and was negative 800k from peak but went 96/4 and threw every shinny penny into the market when the Dow was dropping between 20k-18k and now back break even for the year. Edited: between 23k-18K.

WOW, I am up YTD and only -1% from all time high from Feb 2020 before the crash.

[LOL!]

And with the run-up in the past few days, the portfolio is overweighted in equities and has hit a trigger to rebalance. Stay the course means sells some equities and buy some fixed income.

[street]

Good to see so many carrying on as usual in these times. I personally would not turn and go a different direction in this time we live.

[BeachOrCity]

I choose not to stay the course. Why?
The forward earnings estimates upon which today's pricing is based are not even close to being realistic:
Earnings: S&P 500 Index P/E
Last twelve months 24.56
Year ago 22.07
Next 12 months 22.69

So the professionals think the next 12 months earnings will only be 7.5% lower than the past 12 months? I just don't buy it. Analysts are allowed to forecast anything they want, even if it is in their own selfish interests. CEO's and CFO's are not, which is why they have withdrawn guidance, they are liable if they mislead.

realistically the next 12 months earnings will be much lower at a minimum just from what will happen during 2Q. Let alone a reduced hangover in 3Q / 4Q and possibly beyond.

I am not one to do much technical analysis, but I don't think any bear market ever found a bottom in 30 days.

Given the gains off the lows, I get how many may think this bear is over (and technically it may be depending on your definition); but I see it differently. I think investors will see people and companies as they emerge from lockdown still do and spend much less until we have herd immunity or vaccine / cure. There will be much less spending by everybody and (most not all) companies: travel will be continue to be muted, entertainment will be at a stand still, restaurants will be way way down, etc. None of this will change until the virus is no longer a major concern. It will change of course, but based on what is known today this is going to take a long time with much economic carnage while it plays out.

I think it is human nature to resist accepting the likelihood that things won't return to "normal" soon. Eventually people will accept the new normal, but not until the economy has been 'reopened" for some time and people realize 1st hand that things aren't the same, and the job losses and spending only partially come back.

The major caveat (hope) in this is a vaccine or cure. If that does happen (soon), and it is widely available; things could come roaring back.

[Markola]

+1. My views exactly.

[Rianne]

I will never ever understand the stock market. I only know I'm in it to stay. I just sold my VTIAX in my Roth for a different equity fund in VG. Took ~ 6% loss since the market skyrocketed a few days ago, so my loss was not as bad (was -12.5%).

[VFK57]

In order to save the Market and make money of it our Government creates money(QE) and buys stocks while they are on lower side, similarly like in 2008 they bought real estate assets nobody wanted at the time. In a year or two the pandemic might be over and Market will go back to normal while Government could sell those equities with the profit. Just my thought as I do not have other explanation why Market is going up some days.