I finally worked up the courage to look at our accounts yesterday after the market close. Down ~5% since 7/31
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We're both early semi-retirees (50 & 43). Asset allocation is very much along the lines of ESRBob's RIP portfolio: 40% equities (DFA funds, with typical value and international exposure), 13% (20% before this market turn) combined Vanguard REIT Index, DJP (commodities), Canadian Oil and Gas Royalty trusts, 52% bonds and cash (short-ish maturities, good chunk of non-US$ exposure)
All the reading I've done says we need at least this much allocation to equities to continue to take out ~4% annually given our relatively young ages. If we had the assets we'd doubtless be 75% fixed income, but 4% a year from that would prob. have us eating Alpo long before SS kicks in.
The currrent downturn has us spooked, perhaps largely because the advisor we access the DFA funds through has been talking Armageddon doom-and gloom for a year now and predicting exactly the sort of liquidity meltdown we've been seeing as the opening act. Seeing all these supposedly uncorrelated asset classes tank at once adds to the queasiness.
Have been rereading Errold Moody's "No Nonsense Finance" where he talks about DCAD ("Dollar Cost Averaging Down") - basically a stop-loss strategy where you have set bail out points for equities should their tanking continue on long past a "correction."
I realize I'm wading into old controversy here, but with even John Bogle bailing on "buy and hold" during the dot.com bust there's plenty of precedent. To put it another way, these may not be the unprecedented market conditions that would cause one to deviate from buy & hold, but they're making me think I ought to have a clearer plan in place for when correction turns into catastrophe. Anyone have any recommendations on books or other resources that address this?
AND, lest I forget (again) - thank you very much to all who post here. I've learned so much from this board and value it very highly.
.We're both early semi-retirees (50 & 43). Asset allocation is very much along the lines of ESRBob's RIP portfolio: 40% equities (DFA funds, with typical value and international exposure), 13% (20% before this market turn
) combined Vanguard REIT Index, DJP (commodities), Canadian Oil and Gas Royalty trusts, 52% bonds and cash (short-ish maturities, good chunk of non-US$ exposure)All the reading I've done says we need at least this much allocation to equities to continue to take out ~4% annually given our relatively young ages. If we had the assets we'd doubtless be 75% fixed income, but 4% a year from that would prob. have us eating Alpo long before SS kicks in.
The currrent downturn has us spooked, perhaps largely because the advisor we access the DFA funds through has been talking Armageddon doom-and gloom for a year now and predicting exactly the sort of liquidity meltdown we've been seeing as the opening act. Seeing all these supposedly uncorrelated asset classes tank at once adds to the queasiness.
Have been rereading Errold Moody's "No Nonsense Finance" where he talks about DCAD ("Dollar Cost Averaging Down") - basically a stop-loss strategy where you have set bail out points for equities should their tanking continue on long past a "correction."
I realize I'm wading into old controversy here, but with even John Bogle bailing on "buy and hold" during the dot.com bust there's plenty of precedent. To put it another way, these may not be the unprecedented market conditions that would cause one to deviate from buy & hold, but they're making me think I ought to have a clearer plan in place for when correction turns into catastrophe. Anyone have any recommendations on books or other resources that address this?
AND, lest I forget (again) - thank you very much to all who post here. I've learned so much from this board and value it very highly.
