Market Timers: This is your BUY signal

[Shabber2]

I hate myself for being nervous and pulling out my equities and going 90% bonds, but I am thinking this is timne to jump back in 60/40. Seems like we may see dow 10k, but that should be the extent of the damage.

Anyone else dancing with the devil?

 

[CuppaJoe]

I hate myself for being nervous and pulling out my equities and going 90% bonds, but I am thinking this is timne to jump back in 60/40. Seems like we may see dow 10k, but that should be the extent of the damage.

Anyone else dancing with the devil?

Did you sell your equities above cost? You say 90% bonds--what kind of bonds? Where is the other 10%, equities? Just curious.

 

[Shabber2]

Sold majority at profits and they were mostly individual stocks from before I knew about asset allocation and diversification (MSFT, INTC, etc). My bond mix is:
Vanguard Interm-Term Treasury VFITX 50%
Vanguard Short-Term Treasury VFISX 30%
Vanguard Inflation-Protected VIPSX 20%

And me going back to equities will be:
Int'l Small Cap VINEX
Int'l Large Cap VDMIX
Int'l Large Value VTRIX
Int'l Small Value TIVFX
US Large Value VIVAX
US Micro Cap NAESX
US Small Value VISVX
S&P 500 VFINX
Emerging Markets VEIEX
Precious Metals USAGX

So "going back in", I will be 40% equities mix and 60% bonds mix overall. Basically because I am pretty risk averse and will give up some upside to sleep at night.

 

[crazy connie]

Maybe wait a few more days Shabber. The Asian markets that were closed Monday for a holiday are now tanking and down around 5%. Another shoe may drop on AIG and that could drive the markets down another 3 to 5%. Just my opinion and worth about as much as a good cup of coffee at the kitchen table.

 

[Helena]

I retired last year... am debt free and out of the market for good.


Sweet dreams.

 

[al_bundy]

why do you think Dow 10000 is the lowest it will go? what about the other indexes? last bear the SP and Naz lost 50% and 80% of their values

 

[Tempesta]

I bought some yesterday

 

[rs0460a]

I retired last year... am debt free and out of the market for good.


Sweet dreams.

I'm with you. I also retired early last year and I'm not a market timer. With a healthy "cash bucket" for expenses that will cover the next 2-3 years, along with the fact that I'll be eligible for SS in 15 months (even though I'll delay it till age 70), along with having no debt put's me (and you, I believe ) in a "sweet spot".

No worrying about my 401k balance, losing my job, nor even having to have a full gas tank in my car is of concern these days.

Life is good...

- Ron

 

[CompoundInterestFan]

No worrying about my 401k balance, losing my job, nor even having to have a full gas tank in my car is of concern these days.

Don't y'all who are retired and out of the market still have to worry about inflation?

 

[Helena]

Don't y'all who are retired and out of the market still have to worry about inflation?

With no debt [my house is also paid off] a pension, and my
other investments, I add $$ to my nest egg every month.

I'm too young for SS or tapping into my IRAs... so that will be
icing on the cake.

I can't stress enough how important getting out of debt is
to retirement... servicing debt is the biggest waste of time
and money on the planet.

 

[Sarah in SC]

Must be nice to have that pension...that is (I guess) invested in the market by your former employer. Since I've got to retire on what I save, I'll be sticking it out with Mr. Market.

I do agree on debt service, I've been completely out of debt for some time, including the house. Not all that rare on this board, fortunately.

 

[2B]

I was going to start a new thread to whine about the stock market but someone did it for me.

I'm down, as of last night, about 11% YTD. So far, this amounts to about 3 years of "high budget" living expenses. Ouch!

I've certainly gone through worse but I can't say I like it. I'm 60/40 equities/fixed so that means that stocks are down about 18%.

When this baby turns, it will move fast. Everyone will be saying its a suckers rally. By the time it's obvious it will be too late for most of the move. I'm keeping the faith. This too will pass.

As for the original topic, I suggest going back in this afternoon at your target asset allocation. Misery loves company.

 

[OAG]

I too suspect there are more than a few "cash only" folks on this board now.

Inflation IMO is a unnecessary worry. I "retired" in 1979 and have been, almost 100%, fixed income (mostly FDIC CD's) for almost 30 years. In the last 22 years my savings has increased 5 fold. Yes I have been adding to the total all along (IRA CD's, ROTH IRA CD's and regular CD's). No debts whatsoever and yes I have a "pension" and SS (again in two years at age 70). At that point my "income" will have increased 5 fold also from 1979 and now I do not have 4 kids at home (just DW and I).

 

[rs0460a]

Don't y'all who are retired and out of the market still have to worry about inflation?

Nope. I adjusted my 2009 withdrawl with a 6% inflation factor. That only added a few $ to my annual withdrawl.

Remember, I don't need to keep up with the "traditional" inflation factors (as you, and I have done in the "early years".)

Fuel (car gas) is up, but instead of driving 10k/yr when I had a job, I drive around 3-4k year in retirement. Most of that is volunteer (meals on wheels) work, so I get a small deduction off my 1040.

I don't buy "lunch" (my former workplace had a cafeteria). I can eat at home much cheaper.

Even my medical deductable (as a retiree) has been lowered from $20 to $15 per office visit.

And being of "advanced age" I'm through with the college costs for my childern (only one - went to a state university and graduated with a BS in CS "way back" in '94).

All those instances, along with reduction in taxes (my retirement portfolio withdrawls are not taxed in my state) result in a equal/better income than when I had a j*b.

Yes - life is good ...

- Ron

 

[REWahoo]

Ron, what you are saying is that your expenses in your later years of retirement have declined from where they were when you first pulled the plug, right?

 

[rs0460a]

Ron, what you are saying is that your expenses in your later years of retirement have declined from where they were when you first pulled the plug, right?

Correct. But of course, as many retirees have discussed in the past, this is common.

I/DW planned our retirement income based upon at least 100% of our net income (when we both wor*ed). We're a bit "unusual" since we do travel a lot (foreign 1-2x a year, along with at least one trip in the US) and this accounts for 20-25% of our prior/current expenses.

We've traveled globally extensively over the last 12+years, so unlike others who plan to travel in retirement (and have to increase their income), we've always had this "extra" in our current expenses. As we get older, our travel will continue, but our method of travel will change (private tour vs. travel on our own) so our retirement financial plan (through age 95) is kept at 100% (adjusted for inflation).

Again, since our state wanted "their money up front", we do not pay any state/local income tax on our retirement portfolio withdrawls (and SPIA annuity ) income. An advantage to this is that we don't pay on the gains which we've accumulated over the last 25+ years. That's something others still have to account for, and gives us a slight advantage.

- Ron

 

[al_bundy]

what did you have to do? pay a lot of the state taxes upfront or your state doesn't tax retirement withdrawls at all?

 

[rs0460a]

what did you have to do? pay a lot of the state taxes upfront or your state doesn't tax retirement withdrawls at all?

Unlike most states (all but four in the US), PA taxes you (along with local income tax) at the time you "get your paycheck". I guess they would rather have the money "in hand" to spend ASAP.

The only "income tax" I pay is on a federal level only. That means I don't pay for SPIA, IRA (both rollover and traditional IRA's) withdrawls, along with SS income.

It's the story of "pay me now or pay me later" (I paid before - I get the benefit now ).

- Ron

 

[al_bundy]

either way i wouldn't trust a state government

a lot of them are having money problems and they may see the boomers and their savings as another pot of money to tax

 

[rs0460a]

either way i wouldn't trust a state government

a lot of them are having money problems and they may see the boomers and their savings as another pot of money to tax

Gee - you sound like the folks that say "oh my - they may tax Roth IRA's".

OK - so if they do, so what? I would be paying tax on the gains (however substantial after so many years). I've already paid tax on the initial amount.

If you are under the age of (say 45-50?) you may have reason for concern. At my age, (e.g. older than dirt) I have a bit of confidence that I (and my DW) will pass before any changes in any taxes or SS.

At my age (over the hump ) I've seen a lot of changes. Will they come? Sure. Will they affect me (probably not).

I don't worry about such "trivial income matters" these days. Preparing for retirement (both on a mental and a financial sense) over the last 25-30 years removes such concerns.

Anyway, by my signature, you will see that I've been through worse. Life is good ...

- Ron

 

[youbet]

Inflation IMO is a unnecessary worry........ and yes I have a "pension" and SS

So..... if inflation is no issue, are you willing to give up the COLA feature of your pension?

 

[haha]

I too suspect there are more than a few "cash only" folks on this board now.

Inflation IMO is a unnecessary worry. I "retired" in 1979 and have been, almost 100%, fixed income (mostly FDIC CD's) for almost 30 years. In the last 22 years my savings has increased 5 fold. Yes I have been adding to the total all along (IRA CD's, ROTH IRA CD's and regular CD's). No debts whatsoever and yes I have a "pension" and SS (again in two years at age 70). At that point my "income" will have increased 5 fold also from 1979 and now I do not have 4 kids at home (just DW and I).

There is more to this story, why not share it?

HA

 

[ziggy29]

I was going to start a new thread to whine about the stock market but someone did it for me.

I'm down, as of last night, about 11% YTD. So far, this amounts to about 3 years of "high budget" living expenses. Ouch!

Down 14% here YTD and down about 19% from the day I talked myself out of selling everything (on Halloween last year). I've seen nearly $100K on paper wiped out. And since I will have very little in the way of a pension coming, this is almost all I have to count on. Unfortunately, as a result I don't have the luxury to not be invested if I want to avoid getting killed by inflation.

 

[ziggy29]

I too suspect there are more than a few "cash only" folks on this board now.

Inflation IMO is a unnecessary worry .... and yes I have a "pension" and SS (again in two years at age 70). .

For those of us who do not have SS and a pension -- and who either will not or have reason to question what they are supposed to receive years from now -- this seems a little Pollyannaish.

It's awfully easy to feel smug and secure when you do have COLA'd retirement income that meets your needs and doesn't require being invested with your own money -- or that your own retirement savings don't need to be as high because so much of your income needs are met elsewhere. Feel glad that you were born at the right time.

I don't want this to sound like sour grapes but the bottom line is that right now I think it's hard for people with secure retirement income from pensions and SS -- especially when the pension is COLA'd -- to really relate to the anxiety out there, and that their situation is not the norm for an increasing percentage of people, especially those who are younger.

 

[DallasFH]

Shabber2, I have an odd question.

What if Vanguard go bankrupt?

What would happen to our money?

Sold majority at profits and they were mostly individual stocks from before I knew about asset allocation and diversification (MSFT, INTC, etc). My bond mix is:
Vanguard Interm-Term Treasury VFITX 50%
Vanguard Short-Term Treasury VFISX 30%
Vanguard Inflation-Protected VIPSX 20%

And me going back to equities will be:
Int'l Small Cap VINEX
Int'l Large Cap VDMIX
Int'l Large Value VTRIX
Int'l Small Value TIVFX
US Large Value VIVAX
US Micro Cap NAESX
US Small Value VISVX
S&P 500 VFINX
Emerging Markets VEIEX
Precious Metals USAGX

So "going back in", I will be 40% equities mix and 60% bonds mix overall. Basically because I am pretty risk averse and will give up some upside to sleep at night.