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Old 03-20-2020, 12:04 PM   #21
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I am now 20% cash and 80% bonds and CDs.
Were you always Zero stock (not counting preferred)?
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Old 03-20-2020, 12:26 PM   #22
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Were you always Zero stock (not counting preferred)?
I have been in fixed income since 1989. Prior to that I was in equities and got burned too many times by full service brokers in the early to mid 80's. I took matters into my own hands and made an effort to understand business, economics, and financial accounting. Other than some day trades, I really am not too interested in equities other than researching them to see what they offer in terms of bonds.
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Old 03-20-2020, 02:23 PM   #23
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Even my wife is now interested in buying bargain stocks now She is thinking Southwest, P & G, and I am thinking Disney. I think there is more bottom to the market, but who knows. If states start shutting down for 2 months, like California, this is going to be really ugly for a long time.
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Old 03-20-2020, 02:27 PM   #24
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Even my wife is now interested in buying bargain stocks now She is thinking Southwest, P & G, and I am thinking Disney. I think there is more bottom to the market, but who knows. If states start shutting down for 2 months, like California, this is going to be really ugly for a long time.

Just think of the pent up demand! People will be swarming to anything that gets them out of the house!
And Iím going to keep telling myself that!
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Old 03-20-2020, 02:43 PM   #25
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But I am thinking P & G will crash, because everyone already bought a lifetime's worth of toilet paper
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Buying
Old 03-20-2020, 03:36 PM   #26
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Buying

Wednesday, I used 8% of cash to buy Fidelity S&P Index and Vanguard Total Market.

Tuesday and Thursday in the taxable account I sold some Closed End Bond funds that I bought in Jan in order to tax-loss harvest and picked up roughly equivalent positions in similar funds.

Today, I started small positions in Prudential and PPL, which look very cheap.

I decided to start putting cash to work when the drop was 25-30%, then every drop of about 5%, put another 3-5% to work. Hopefully we hit bottom before I run out of cash. I'm keeping at least 20-25% of my cash position (it was 30%) for the next two year's withdrawals. I took 2019 gains in Jan and Feb, so the cash position was unusually high and my stock allocation was close to 40%, which is too low.
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Old 03-20-2020, 03:45 PM   #27
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I started rebalancing this week but am I taking it slow as I suspect further declines are likely. 1% on Tuesday, another .5% today.
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Old 03-20-2020, 04:55 PM   #28
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Our Target Date Funds rebalance nightly and our Vanguard advisor rebalances quarterly if bands are exceeded so zzzzzzzZZZZzzzzz. Boring is best.
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Old 03-20-2020, 10:07 PM   #29
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Unless you're an active trader and buying and selling stocks to make short term profits, I just don't understand the wisdom of buying at this moment for the long term. Unless you have a crystal ball or you're attempting to time a bottom, wouldn't it be more wise to wait to see how this coronavirus thing plays out? My gut feel is that even with the government bailouts, we're headed for a big recession or worse, depression. I'm not criticizing your decisions to buy just trying to understand your logic.
Be greedy when others are fearful. The market is discounting a recession. I have been buying (in small positions) because I do not know where the bottom is.
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Old 03-21-2020, 12:56 AM   #30
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Unless you're an active trader and buying and selling stocks to make short term profits, I just don't understand the wisdom of buying at this moment for the long term. Unless you have a crystal ball or you're attempting to time a bottom, wouldn't it be more wise to wait to see how this coronavirus thing plays out? My gut feel is that even with the government bailouts, we're headed for a big recession or worse, depression. ...
+1 I've pared down my equity position over the last week or so. I think it is really hard to assess how deep and wide this recession is going to be and the market is just guessing, so I'll trade some conservatism for some upside. I just have a gut feel that this recession is going to be a nasty one and there is so much uncertainty it is difficult to assess the impact on business and the economy. What the Fed has done with interest rates to artifically prop up the stock market is also a concern as is the high proportion of market activity that is just traders doing their thing.

On the upside, our retirement portfolio is about the same in total as when we retired 8 years ago after funding 8 years of living expenses plus buying a winter condo (10% of retirement date balance) and replacing our one-car garage with a two-car garage with a bonus loft (2.5% of retirement date balance)... so we are still well positioned... about 14% ahead of where I projected we would be at this time when we retired.

I'm thinking of this as a "time-out" to reassess our risk appetite and AA going forward and once that is decided, how to catch that falling knife without getting cut.

I'm also mulling over perhaps using a portion of portfolio income to buy LEAPs or at-the-money or slightly out-of-the-money SPX index calls to capture equity returns to mitigate inflation risk rather than direct equity investments.
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Old 03-21-2020, 01:18 AM   #31
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I’ve been tax loss harvesting some legacy active funds. I keep it allocation neutral which means I buying the corresponding index fund same day.

I didn’t think I’d get this kind of opportunity to do a clean-up, but had planned for it if the opportunity arose. It should mean lower taxes in the future.
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Old 03-21-2020, 04:20 AM   #32
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Iíve been tax loss harvesting some legacy active funds. I keep it allocation neutral which means I buying the corresponding index fund same day.

I didnít think Iíd get this kind of opportunity to do a clean-up, but had planned for it if the opportunity arose. It should mean lower taxes in the future.
You mean you are selling some of your actively managed mutual funds to take these capital losses and putting the money into index funds? That is a great idea. Just want to make sure I understand. Even at the market peak, my cost basis would not have generated as much capital gains as I thought, since I pay taxes on the distributions each year.
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Old 03-21-2020, 05:22 AM   #33
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VTSAX. I’ve invested about 25% of my dry powder this week. I expect we’ll see the market bottom in weeks, not months. We might even already be there.

I must say, it’s easy to be sanguine about this catastrophe. Traffic is blissfully down, and the few people I do meet are all civil and polite. No looting or panics in my neck of the woods. DW did get terminated from her temp job yesterday, but I was expecting that.
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Old 03-21-2020, 07:00 AM   #34
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Lots of activity in my portfolio lately.

Buying VTSAX in taxable mainly on days S&P is down at least by 100 points & also some Total International Stock Index. There have been lots of those down days recently.

I am cognizant that Market will go down more in the coming days

I regretted not buying in 2008-2010 Market downturn & saw the Bull Market since. I have more time being (Seasoned??) in the Market since, although I know that may not be repeated.

I am 63, was 56/46 before the downturn & am now around 48/52 & my goal is generally to be around 50/50. I will be in the Market for another 15 yrs or more, so I think (although can be flat out wrong) I have a reasonable chance to see it recover & go to new heights. USA probably will not be another Japan

I have put in some from our savings but more from Tax Exempt Intermediate Bond(in taxable) & did the Roth Conversion from VBTLX to VTSAX. So more of re balancing from Bonds into VTSAX & some new money into VTSAX.

Funds for our living expenses for next 10 yr or so will be coming from Bonds & Cash. Well, this can be called Market Timing, but am not selling Stock Funds anytime soon.
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Old 03-21-2020, 07:00 AM   #35
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Be greedy when others are fearful. The market is discounting a recession. I have been buying (in small positions) because I do not know where the bottom is.
This
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Old 03-21-2020, 07:03 AM   #36
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We are outside of our rebalancing bands, but are still waiting for things to stabilize a bit before buying equities.

I'd be amazed if we see a V shaped recovery. I think we're either going further down or sideways for a while.
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Old 03-21-2020, 07:38 AM   #37
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The wild card is if governors issue orders for non essential workers to shelter in place. That will bring almost everything to a halt. That may be our moment of capitulation.
I have tax loss harvested out of everything I can and that was a couple weeks ago. Might have been my best move. I have been picking up AAA select muni’s at yields I haven’t seen in years.
There is plenty of time to buy equities. This will be the worst market of our lives. I am in no rush.
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Old 03-21-2020, 04:38 PM   #38
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Iíve been tax loss harvesting some legacy active funds. I keep it allocation neutral which means I buying the corresponding index fund same day.

I didnít think Iíd get this kind of opportunity to do a clean-up, but had planned for it if the opportunity arose. It should mean lower taxes in the future.
AAA+++
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Old 03-22-2020, 08:58 AM   #39
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The wild card is if governors issue orders for non essential workers to shelter in place. That will bring almost everything to a halt. That may be our moment of capitulation.
I have tax loss harvested out of everything I can and that was a couple weeks ago. Might have been my best move. I have been picking up AAA select muniís at yields I havenít seen in years.
There is plenty of time to buy equities. This will be the worst market of our lives. I am in no rush.


I think itís already happened in most places but the definition of essential worker could become more restrictive and it seems enforcement is a problem. I agree....plenty of time to buy equities. Iím considering a muni bond purchase and have no idea how market will play out for these. Bonds that typically have zero availability are at par vs +12 a week ago.
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Old 03-22-2020, 09:14 AM   #40
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I think itís already happened in most places but the definition of essential worker could become more restrictive and it seems enforcement is a problem. I agree....plenty of time to buy equities. Iím considering a muni bond purchase and have no idea how market will play out for these. Bonds that typically have zero availability are at par vs +12 a week ago.
Yes. I am not sure how the enforcement will be done. Arrest and lock up with all of the other violators in a 10x10?
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