Poll: Stay the course or Sell it All. May 2020

[WyomingLife]

Well said Sir !!!!

+1

Here's a related post today from the Mad Fientist: https://www.madfientist.com/my-portfolio/?ck_subscriber_id=840561184

 

[WyomingLife]

I'm also a guy who thinks most moments in life can be captured via a Clint Eastwood movie.

So here is my snippet for today (apologies to JL Collins, because I can't do the video editing like he can):

Original: "So you see in this world, there's two kind of people, my friend. Those with loaded guns, and those who dig."

My paraphrase (with apologies to Clint Eastwood and United Artists): "So you see in this world, there's two kind of people, my friend. Those [who stay invested], and those who dig."

 

[gayl]

When I reallocated my IRA to 'conventional wisdom' of 70/30 my IRA was 20% higher than my brokerage account. It's now only 6k higher. So yeah .... reallocated IRA to match brokerage. Regrets. Lesson learned. Just need to figure out where to stick my IRA cold cash

OTOH I'm considering taking SSA next year so I'm good

 

[GoBears]

I am pretty much staying the course. Overall stock allocation target was 55%. In January, I was up to about 57% in stocks, not withstanding three earlier adjustments of selling stocks and buying bonds in my 401k. I put one-third of that money back into stocks near the bottom of the market and am loosely considering a 50/50 allocation going forward. Planning on retiring this year or more likely next without a pension so ding a bit more conservative is probably advisable given sequence of returns risk.

 

[Mark1]

I voted other. I did some balancing in March near the market low, and turned around and sold some the last two Mondays on upswings. I have been near 50/50, and my total percent buy/sell have been a few percent of my entire portfolio. Although, I'm near 45/55 currently, I might violate my rebalancing bands this afternoon and sell a few more percentage at the close today if the market holds up at closing.

I seem to have 2 conflicting rules in my portfolio managing strategy right now.

Rule 1) Stay the course and follow the spreadsheet and rebalancing bands.
Rule 2) Don't invest in things you don't understand.

Right now I don't understand how the Market can be at its current level with the current state of the economy. I know that the Market looks into the future, but I don't remember it ever looking that far into the future ()>

 

[razztazz]

I seem to have 2 conflicting rules in my portfolio managing strategy right now.

Rule 1) Stay the course and follow the spreadsheet and rebalancing bands.
Rule 2) Don't invest in things you don't understand.

Right now I don't understand how the Market can be at its current level with the current state of the economy. I know that the Market looks into the future, but I don't remember it ever looking that far into the future ()>

Situation Normal, Defcon 5 AA for me is 50/50. That allows 15 whole years in fixed income. Currently I'm all bonds/cash since 3 Feb. Yes, I don't understand why the patient is moving either.

Given current circumstances I find it hard to believe there won't be a sufficiently conducive time to get back into the stock market in the next 15 years. On top of that I will be 63 soon so I probably won't need 30 years worth of survivability.

 

[devans0]

I vote other.

I went to a new balance of equities a few years ago, 20/80. I was getting hammered by various tariff/trade wars on internationals, and that was also hitting my US equities. I don't consider that normal market risk, so with highs in the market, I reduced my AA.

The 20% in equities was kept for tax reasons and were being used for living expenses and paying my taxes for converting tIRA to Roths. The drop combined with our higher taxes may run us out of reg investment money before everything is converted, but we are still largely going to be able to avoid RMDs. We only need two or three years, and we can start Soc. Security without hitting RMDs.

I'm waiting to get back in the markets, and expect to be back into international funds before US funds. I follow my own read on economics and consistently manage to avoid the biggest drops. I don't even try to time the markets. I just balance to what I see as risk/reward management.

 

[Spanky]

Stay the course. No change in AA.

 

[teetee]

Asset Allocation = AA!!

Sorry I am not familiar with acronyms.

My AA (cash / stock index fund) was 1 / 99 before COVID and remained the same during the crisis. I found no reason for me to change, despite all the pessimistic outlook from the news.

 

[Golden sunsets]

I voted Other because, although I don't consider myself a market timer, I do think this time it's different and the slog back will be longer and more painful than anything since the Great Depression. So I haven't rebalanced. Also I did inherit a chunk of cash on 2-28, which sits as we speak in Ally No Penalty CD's at 1.75%, making my AA way more conservative. I am now waiting for my crystal ball to become clearer on a bottom. I do think this will be likely be a W and not a V recovery.

Well, looking back on my comments of just a couple of weeks ago, and now having recovered even more (now down about 3.9%YTD after factoring out a significant cash infusion) I don't know what to think. It certainly is acting like a V shaped recovery. Now at 44% equities. Maybe famous last words before another big dip. Time will tell.

 

[pb4uski]

I think reading between the lines that Powell is suggesting that this time may be different.

Alan Blinder: (10:55)
One of the ways to draw a line between lending and spending, as you just put it, is to make, let me say, only loans that will be paid back, you might say with a hundred percent certainty, if there was such a thing in the world. That’s generally been a dictum of the Fed. You’ve been directed during the pandemic, not you personally, the Fed has been directed to make loans in places where the Fed has not gone before, and maybe they’re not a hundred percent guaranteed to payback. Do you see that as this, I was talking a minute ago about mission creep or mission impossible or something like that, does that kind of thing worry you?

Jerome Powell: (11:50)
This is an emergency of a nature we haven’t really seen before. And at the beginning of this, my colleagues and I really saw that we needed to be using our tools to their fullest extent, that it would be very hard to explain to the public why we would hold back from doing that at a time when we saw a 50 year low in unemployment turn into an 80, 90 year high in unemployment in the space of 60 days. We saw the economies around the world shutting down. And we felt called to do what we could, and so we crossed a lot of red lines that had not been crossed before, and I’m very comfortable that this is that situation in which you do that, and then you figure it out afterward. So that’s how I would look at that.

 

[cyber888]

I trimmed stocks .. but went heavy on small caps when market went low. My 401k only down 1.8% from January when Dow was around 28,600. It probably will go down some during Q2 reports but will be tempered w forward looking statements, and there’s the November election. And if Trump will start to spin nice things with the China trade deal to prop up,the market before elections, this market may be able to maintain its current levels. My networth is at the highest level than at the start of the year since i actively traded my IRAs and paid about $20,000+ of mortgage debt and closed my car loan.

 

[Finance Dave]

I was only at 20% equities going in...bought more on the way down, then sold about 2 weeks ago such that I'm now back at 20% equities and we're only down about 1% as far as portfolio value...I'm pleased with that.

I don't try to predict the market, but I will "dynamically rebalance"...buying when there are drops and selling when it approaches highs. If we have a drop of 5% or more in the near future...I'll buy a little bit again.

 

[TechLead]

I am surprised experienced investors like this group had 25% bailing out on "Staying the course".

 

[Markola]

I am surprised experienced investors like this group had 25% bailing out on "Staying the course".

Me, too, though I myself cashed out some mutual funds we need for spending over the next two years after FIREing this month. I guess everyone makes decisions based on their own circumstances.

 

[big-papa]

Me, too, though I myself cashed out some mutual funds we need for spending over the next two years after FIREing this month. I guess everyone makes decisions based on their own circumstances.

Yep, some people clearly didn't stay the course. Ignore "pie" and what's left? Other? I did some tax loss harvesting and marked it as "other", but many people will also consider that "staying the course", which I consider equally valid.

 

[TechLead]

What I did in early March is raise our 401k contributions to 60% plus of our earnings.

By now filling both almost all the way to 63500. As usual all went to equities.

 

[Toocold]

I think people wanted to buy at 18k. Perhaps it will still come. Who knows.

 

[kcowan]

I am expecting a major correction when the full effect of the business closings and job losses show up in the numbers.

 

[Fermion]

I am expecting a major correction when the full effect of the business closings and job losses show up in the numbers.

So...never? Money will be printed, loans will be made and the world will move on.

 

[aja8888]

So...never? Money will be printed, loans will be made and the world will move on.

The world will move on and there will be a hell of a lot of empty buildings sitting around. They are starting to show up here and we are not in Seattle of SF.

 

[Fermion]

The world will move on and there will be a hell of a lot of empty buildings sitting around. They are starting to show up here and we are not in Seattle of SF.

There will still be demand for products, even if the demand is in different areas because of behavior change. If you are invested in the broad market, you should capture this increase in demand and profit along with the losses in the bad stuff (cruise lines, etc.)

By my estimates, there are still something like 6,999,300,000 consumers out there after the 700,000 COVID deaths. We have lost 1/100 of 1% of the world consumers to the virus so far.

 

[harley]

I dropped my equity holdings significantly awhile back. I have to admit it's been hard dealing with FOMO, but I've always believed in not investing in things you don't understand. And I don't understand the market anymore, with the Fed propping it up and debt heading into the stratosphere. I've got enough that I'm comfortable with the smaller equity portion, and am willing to wait it out until I don't feel like the game is rigged. People say don't fight the Fed, but IMO the Fed is in uncharted territory and is praying things will work out. If it does I will miss out on some growth, but as the "pay off the mortgage" people always say, this will allow me to sleep at night (with a nice nap in the afternoon).

 

[Oilcan]

I dropped my equity holdings significantly awhile back. I have to admit it's been hard dealing with FOMO, but I've always believed in not investing in things you don't understand. And I don't understand the market anymore, with the Fed propping it up and debt heading into the stratosphere. I've got enough that I'm comfortable with the smaller equity portion, and am willing to wait it out until I don't feel like the game is rigged. People say don't fight the Fed, but IMO the Fed is in uncharted territory and is praying things will work out. If it does I will miss out on some growth, but as the "pay off the mortgage" people always say, this will allow me to sleep at night (with a nice nap in the afternoon).

+1 to that! At age 74 that pretty much sums it up for me too!

 

[pb4uski]

There will still be demand for products, even if the demand is in different areas because of behavior change. If you are invested in the broad market, you should capture this increase in demand and profit along with the losses in the bad stuff (cruise lines, etc.)

By my estimates, there are still something like 6,999,300,000 consumers out there after the 700,000 COVID deaths. We have lost 1/100 of 1% of the world consumers to the virus so far.

Demand is one thing.... the next thing is for those 6,999,300,000 consumers having money to spend... that might be where your hypothesis unravels.