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Take even more off the table???
Old 11-06-2019, 09:07 AM   #1
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Take even more off the table???

THis post correlates with another one recently written here "Dirty MArket Timer." I am at 46/39/15 ..equities/ bonds/ cash (MMF). I have been rebalancing all along and want to trim another $100,000 from a small cap fund I have that has been doing very well ( currently at all time highs...but isn't everything!!!). This would only trim my equities down to 44%; so no big deal and give me a cash cushion of $500,000. I know it is a lot of cash....but I could then ride out any market down turn for years and have even more "fun money" to spend.

So.....pull the trigger....or leave well enough alone. It really would not bother me if the market gains another 3-5% over the next 6 months. I would feel better KNOWING I locked in $100,000 worth of gains now rather than roll the dice and try for more. Comments? I am sure I am not alone here. Yes....I am also a "dirty market timer."
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Old 11-06-2019, 09:08 AM   #2
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Old 11-06-2019, 09:26 AM   #3
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I was tempted to do a similar thing a few days ago. Then I told myself that I have enough, why bother. Back to think about how to spend money to make my life happier.
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Old 11-06-2019, 09:42 AM   #4
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I guess more to invest if there is a big downturn. We held back with cash years ago, $250k+, then leaped in, Dow at @ 15,000. If I recall, did it somewhat gradually, might have started at @ 13,000. Might be a good strategy.
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Old 11-06-2019, 09:46 AM   #5
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If it makes you feel better, than do it. My answer to the question is to have my AA and then rebalance to keep it within that AA.
As for your dirty market timer, I still think the market has room to go up before it goes down. I'm waiting for approx 1 year form now with hopes for a trade deal, and the election year will keep markets up. After that
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Old 11-06-2019, 09:46 AM   #6
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Your mix is too conservative for me but do what helps you sleep. I changed my AA just a year ago and that will stick for the next few years
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Old 11-06-2019, 11:13 AM   #7
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Here is some light reading on the subject of market timing: https://www.bogleheads.org/wiki/Tayl..._timing_quotes
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Old 11-06-2019, 11:15 AM   #8
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We're getting to the time of year I rebalance anyway, and so far it looks like it will be needed - causing a bit of a tax bite, but oh, well. Better that....

In addition, we are planning on something a bit novel to us. Due to some family circumstances this year, we’ve decided to gift a much larger amount than usual to heirs this year. Perhaps this is something we will evaluate, say, every 10 years to see if we can do it. The fact that our retirement accounts are currently at record highs certainly feels like an auspicious time to do so. As a consequence we will be taking a larger withdrawal than usual. Some of the gifting will draw from short-term funds (~cash cushion) which have accumulated over the years and are also higher.

Our plans have always been to gift as possible while living. The trick, of course, is to decide what is a reasonable trade off.
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Old 11-06-2019, 11:24 AM   #9
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I have been slowly been moving into cash as the market has gone up. I am currently on a course of selling $20K of FXAIX every 20 points that S&P rises; next selling point when S&P gets to 3090. If market makes it to 3150 I will have enough in cash to cover all expenses through 2021. This pattern has helped me lower stock allocation from 60 to 55; my new preferred stock allocation. My goal now is to get to 55/35/10 as a long term allocation.

If market continues to rise past 3150, I will sell $20K every thirty points of rise in S&P. If market takes a turn for the worse I may sell some bond funds sometime in 2021. Either way, I am not worried.

Marc
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Old 11-06-2019, 12:46 PM   #10
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I have enough in I bond and money market to last 14 years, at the current spending rate.

And that is without SS, nor dividend and interest income coming in.

I like stocks, and will not go lower than 50%. Currently at 60% equity.
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