Retirees and stocks: Sell now or hold on?

[Animorph]

With help like this, who needs enemies (from my Yahoo home page)?

"
If you haven’t asked this question, you will. Is it time to take your chips off the table? With the major stock market indexes close to all-time highs, now seems as good a time as any to walk away from the table, especially if you are back to where you were in 2008.

The answer truly depends on your personal circumstances, but also on who you ask. To be fair, it’s not quite like the old joke about asking five economists for an opinion and getting six answers, but it’s pretty darn close. In fact, the experts we spoke with offered up recommendations ranging from sell everything to do nothing. Here’s a recap of their advice.
"

Retirees and stocks: Sell now or hold on? - Robert Powell's Retirement Portfolio - MarketWatch

Reminds me of why I went DIY. The main things I remember hearing when I started were:

"This guy made the mistake of hanging on to his winners too long."
and
"This guy made the mistake of not hanging on to his winners long enough."

And the same thing for hanging on to losers. Clearly this is no advice at all.

And here we thought it was so simple!

[H2ODude]

I think what they're saying is ... time the market...to a degree. Which is what we're all told never works. I'm sure someone will quickly post about how their method does in fact work. Anyway. I'll just hold on and watch the asset allocation.

[W2R]

Well, if we don't trade a bunch and market time, how is anybody going to earn a living off the fees we would be paying them?

How selfish of us retirees to just sit and do nothing until it is time to rebalance. (NOT!)

[travelover]

Churn, baby, churn!

[Culture]

I am going to sell my equities and put everything into:

1) Bubble gold at $1667/ounce?
2) Short term bonds at 0.1% interest (well below inflation)?
3) Long term bonds (you will really enjoy when interest rates return to normal or higher)?
4) Beaver cheese futures?

[ejman]

Quote:

Originally Posted by Culture I am going to sell my equities and put everything into: 1) Bubble gold at $1667/ounce? 2) Short term bonds at 0.1% interest (well below inflation)? 3) Long term bonds (you will really enjoy when interest rates return to normal or higher)? 4) Beaver cheese futures?

To create a well diversified portfolio make sure you allocate 25% to each category.

[mickeyd]

Quote:

major stock market indexes close to all-time highs, now seems as good a time as any to walk away

but only if you are 100% capable of predicting the future and you can accurately predict that the market will fall.

[foxfirev5]

I have noticed an increase in commentary from Bill Bernstein regarding continuing to stay heavily invested once you've won the game. I fully realize that most of us still need to stay invested in equities to a certain degree for future growth. However back in early '09 I recall telling myself that if stocks ever got back to where they were I would pull quite a bit off the table. However I have stuck to my 45/40/15 AA through thick and thin. I believe the relatively conservative nature of this portfolio has enabled me to weather the storms that have cropped up.
In running Firecalc and other programs I am finding that I may not really need 45% in equities. My success rate does not drop below 100% until I get down below 25% equities. However like many others, where do you put the money from the sale of equities? I already have well over 5 years expenses in cash and I honestly see very little upside to bond funds at this point.
So, like the last 50 times I've run this scenario I'm going to stay the course with my current AA.

[audreyh1]

As is typical, the headlines or subtitles don't quite match the content. For example, the section with Steven Chen is subtitled "Sell, sell, sell" when Chen's main recommendation is to rebalance annually.

[traineeinvestor]

Quote:

Originally Posted by audreyh1 As is typical, the headlines or subtitles don't quite match the content. For example, the section with Steven Chen is subtitled "Sell, sell, sell" when Chen's main recommendation is to rebalance annually.

+1

But who reads beyond the headlines these days?

[audreyh1]

Quote:

Originally Posted by traineeinvestor +1 But who reads beyond the headlines these days?

It seems to have become a pet peeve of mine these days - the runaway discussion based on a headline when actually reading the article shows the headline was misleading.

Usually a different person writes the headline, and when they don't match it's obvious spin and/or sensationalism.

It's so darn prevalent these days that I should just let it go, but the basic dishonesty just rubs me the wrong way, so it's really hard to let it go.

[Lazarus]

Quote:

Originally Posted by audreyh1 It seems to have become a pet peeve of mine these days - the runaway discussion based on a headline when actually reading the article shows the headline was misleading. Usually a different person writes the headline, and when they don't match it's obvious spin and/or sensationalism. It's so darn prevalent these days that I should just let it go, but the basic dishonesty just rubs me the wrong way, so it's really hard to let it go.

I really hate it when they change the headline on an existing article to get you to look at at again.

[pb4uski]

Quote:

Originally Posted by audreyh1 As is typical, the headlines or subtitles don't quite match the content. ....

Quote:

Originally Posted by audreyh1 ...Usually a different person writes the headline, and when they don't match it's obvious spin and/or sensationalism. ...

Yes, like "Let Detroit Go Bankrupt"

[Ed_The_Gypsy]

It must be time to panic again. The end of the world is coming--repent! Sell everything! Burn money! (Yours.) Things are going too well--be afraid!

[Bikerdude]

Well, I feel the Fed is twisting my arm to remain in equities. If I could get 4 or 5% in CD's I would lighten up a bit. Until then I'm stuck.

[clifp]

Quote:

Originally Posted by Bikerdude Well, I feel the Fed is twisting my arm to remain in equities. If I could get 4 or 5% in CD's I would lighten up a bit. Until then I'm stuck.

Same here. In hindsight I sure wish I had got more Penfed 10 year CDs.
But I have some 3% CD coming due next month and I have no idea what do with money. The one thing I do know is that in my wildest imagination I never would have imagined that I couldn't even get 1.9% for another 5 year CD when these came up for renewal .

I don't fight the fed which is why I remain in stocks.