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Old 02-05-2017, 11:27 AM   #21
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OTOH, I'm aware of some (very large) old family trust funds that are so well funded that a 2%-3% return is quite satisfactory against their draw requirements.

100 years of investing coupled to a dwindling set of distributions makes it easy to just ride the low return train.
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Old 02-05-2017, 11:31 AM   #22
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We have a high percentage (100%) in stocks but also have a very large pension which covers most of our basic needs. I have a very high risk tolerance with a fairly large portfolio. I have concluded that I am high in equities mostly for the benefit of my daughter and any grandkids as well as protecting against inflation since the pension is not Cola'ed. Been retired 10 years and this has worked out very well so far.
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Old 02-05-2017, 12:36 PM   #23
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I think it all depends on your long term time frame and cash flow needs, but one of the biggest mistake people make in retirement and just in general is not having enough exposure to stocks! Yes, there is more volatility , but the volatility is the price one pays for substantially higher investment returns over time. I have friends that have committed financial suicide trying to "time the market" or claim "now things are different with Trump", etc, etc
I disagree. You only retire once. It's great to aim for higher returns in your early years but retirement is about drawing income and enjoying what you've worked hard to save.

Now his situation is different since he doesn't need the money, he can decide to take more risks.
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Old 02-05-2017, 02:16 PM   #24
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I am a market timer who practices "Tactical Asset Allocation". I try to fight fear to go to higher stock AA after the market tumbles, and to fight greed with a lower stock AA when the market gets to high evaluation. As I cannot be 100% sure, I never go 100% stock, nor under 50%. I am currently at 60%.
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Old 02-05-2017, 03:03 PM   #25
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I've always been a believer in equities, and while working held virtually no bonds.

Since retiring 4 years ago, I've held a larger bond/cash position, knowing I'm not maximizing returns.

I decided to dial risk down, preferring comfort in riding out a major downturn with less loss, to the minimal extra pleasure/lifestyle enhancements/legacy building I'd derive from incremental gains.

I mean, even if I'd been all equities the last four years it's not like I'd have my own private jet. A new car, an extra vacation, some xtra $ for my kid, ok. But I'm pretty much stuck/satisfied with the lifestyle I've earned thru my work years no matter what returns my portfolio achieves now.
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Old 02-05-2017, 03:12 PM   #26
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Thanks again for the insight and your thoughts on what you would do. Even if I left it for the next 25 years at high risk doesn't mean I will have more. I do hope my way of thinking does work because I would like this money to grow for a cause and purpose.
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Old 02-05-2017, 03:27 PM   #27
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That's my take. If you truly "don't need it" you can put it all on black at the roulette wheel and it doesn't matter.
In my experience, the only way to win at Roulette is to put it all on #37. YMMV
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Old 02-05-2017, 03:33 PM   #28
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Would you feel comfortable leaving ratio at 80/20 in your late years of life if you really don't need it to live on?
Yes or even 100% with my surplus. I don't invest in stocks with my base (bucket 1), only my surplus (bucket 2).
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Old 02-05-2017, 04:30 PM   #29
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I have 2 different AAs, one for my IRA and the other for my taxable account. In the IRA, which I won't have unfettered access to for another 6 years, I have a greater % in stocks than in my taxable account which I use today to cover my expenses. I also rebalance more in the IRA although I have been gradually reducing its stock % as I age. I am at 53/47 in favor of bonds after a few years at 50/50. The taxable account I did some recent rebalancing to capture some of the market's gains and to generate a little more income. It is at 62/38 in favor of bonds now.
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Old 02-05-2017, 04:31 PM   #30
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Thanks again for the insight and your thoughts on what you would do. Even if I left it for the next 25 years at high risk doesn't mean I will have more. I do hope my way of thinking does work because I would like this money to grow for a cause and purpose.
I've found reading about how endowments invest to be thought provoking. This article describes Yale, and the discussion below is also fine.

http://www.financialsamurai.com/a-lo...ty-endowments/
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Old 02-05-2017, 07:06 PM   #31
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target2019 >>> that is a very good read. I saved it to study it some more for there is a lot of information there take in. Thank you
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Old 02-05-2017, 07:37 PM   #32
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With the special circumstance of having a son who is a disabled veteran, I've decided that a 50/50 allocation will probably serve best. I don't need to try to swing for the fences but it is a concern to leave a legacy.
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Old 02-05-2017, 11:39 PM   #33
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Originally Posted by Danmar View Post
We have a high percentage (100%) in stocks but also have a very large pension which covers most of our basic needs. I have a very high risk tolerance with a fairly large portfolio. I have concluded that I am high in equities mostly for the benefit of my daughter and any grandkids as well as protecting against inflation since the pension is not Cola'ed. Been retired 10 years and this has worked out very well so far.
+1
We are high as well probably about 90%, although no big pension, we have a large cash cushion.
This was not really planned. At at this time, I don't see bond funds doing well over the next 10 years but am trying to get more bond exposure without interest rate risk.

If one has a large enough stash, then riding the 100% stock volatility is fine as long as dividends generate enough to scrape by on during lean years.
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Old 02-05-2017, 11:41 PM   #34
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I am a market timer who practices "Tactical Asset Allocation". I try to fight fear to go to higher stock AA after the market tumbles, and to fight greed with a lower stock AA when the market gets to high evaluation. As I cannot be 100% sure, I never go 100% stock, nor under 50%. I am currently at 60%.
This is a good idea, because I've been afraid of timing the market.
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Old 02-06-2017, 12:31 AM   #35
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This is a good idea, because I've been afraid of timing the market.
I gather OP doesn't need the money referenced for his/her own retirement.
1) On one hand, then investing in equities doesn't seem much of an issue.
2) On the other (economist's hand), when her/his legacies will draw, how frequently, and at what rate is very much a determining factor. The longer the time frame and the less of a % draw, the higher the % allocation to equities.
The shorter the time frame and the higher the % draw is likely, then the equity allocation needs to be reconsidered.

There are multiple legacies mentioned here, so I'm over-simplifying. Prioritizing who you want to help and how would perhaps help simplify the problem--somewhat.
I'm afraid I haven't helped.
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Old 02-06-2017, 07:39 AM   #36
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Thanks again for the insight and your thoughts on what you would do. Even if I left it for the next 25 years at high risk doesn't mean I will have more. I do hope my way of thinking does work because I would like this money to grow for a cause and purpose.
is the purpose of the money to leave a legacy ?
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Old 02-06-2017, 08:10 AM   #37
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is the purpose of the money to leave a legacy ?
Yes >>> how would you continue?
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Old 02-06-2017, 09:26 AM   #38
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+1


If one has a large enough stash, then riding the 100% stock volatility is fine as long as dividends generate enough to scrape by on during lean years.
Agree. This is basically what we have done since retiring 10 years ago. Just spending divs. Will gradually liquidate small amounts of equities starting this year.
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Old 02-06-2017, 10:19 AM   #39
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...Would you feel comfortable leaving ratio at 80/20 in your late years of life if you really don't need it to live on?
Absolutely. If I don't need it to live on then it would be for our kids and an 80/20 portfolio would be fine for a 28 year old and a 33 year old... even if we didn't have heirs and it was for charity I would be comfortable with 8/20 because in the long run the charities would get more and be able to do more good.
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Old 02-06-2017, 10:54 AM   #40
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Yes, there is more volatility , but the volatility is the price one pays for substantially higher investment returns over time.
No. Volatility is the bigger bet you place for the expectation of higher returns.

"Over time"? What time? How much time?
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