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Old 02-06-2017, 10:57 AM   #41
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Since I am not yet retired but close, I am currently at 40/37/23 AA primarily to see how actual spending/expenses go during the beginning of retirement. I have enough in cash to cover planned withdrawals to supplement my pension until SS hits, as I don't want to be forced to sell equities in a down market. If it turns out our spending is less than expected, I'll look at moving back towards a higher AA.
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Old 02-06-2017, 05:22 PM   #42
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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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This is a good idea, because I've been afraid of timing the market.
What I meant to say is that I try to raise stock AA after the market has crashed, and to lower it after several years of a bull run and the P/E is high as it is now. If I were clairvoyant and could call the top and bottom exactly, I would bounce between 100% and 0% stock, and had more money than my frugal self knows how to spend.

As I do not really know, and only guess with some uncertainty about the market direction, I am never completely out or in. I have gone as low as 20% cash, and as high as 65% cash. The rest is in stocks, as I never had more than 5-7% in bonds.
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Old 02-08-2017, 05:29 AM   #43
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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
Yes, not as simple as I would like. I find reading about this model thought-provoking, but realize I don't have total access to the investments in their basket.

This article just popped up on my radar. It proposes the 3-fund Bogle model, for various reasons, over the endowment thing. It sure is simple.
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Old 02-08-2017, 06:00 AM   #44
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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
Slightly off subject, but the article mentions Realtyshares.com Does anyone have any insight into this group? Legit? Risky?
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Old 02-08-2017, 01:22 PM   #45
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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.
+1 Exactly!

Loved equities when w*rking! Somehow rode out the 2000's at 80% or more equities. My j*b was endangered in 2009 due to internal politics, but I toughed in out in equities, in part because I was afraid to sell low. Of course, it market has roared back since 2009 and I FIRE'd

Through 2014 and 2015 we trimmed back to 50% equities and held about 2 year's expenses in cash, for the first time ever. FI normally hate "lazy" money, but now I just want to sleep better. Got lucky selling stocks near the top of the market (at the time).

As for spending, we're running around 4% WR, planning to pull down to 3% in several years. We've been cutting expenses on stuff that doesn't add value (cable tv, overpriced "expense account" restaurants, expensive toys-we have enough of those). Just seems like a natural thing to do, and no regrets. Perhaps we would spend more on vacations, but we can never agree on where to spend. Our lifestyle is more modest than when w*rking, but we're more happy with it! We've been FIRE'd only 2 years, so perhaps we're still settling in and just de-stressing from decades of w*rk.
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Old 02-08-2017, 03:10 PM   #46
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It's 1989 and you are retired with a majority of your money in the market bam the financial crisis hits your 401k becomes a 201k. Most will panic, sell, swear off equities and jump into fixed income. Some will continue to get their somewhat reduced dividends and ride out the storm. In time the highly diversified equity holder portfolio grows and grows...

We are living longer, fixed returns are nearly negative and there is someone screaming about crash proof retirements every Saturday. For me an equity rich allocation makes sense.
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Old 02-08-2017, 05:25 PM   #47
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Yes, not as simple as I would like. I find reading about this model thought-provoking, but realize I don't have total access to the investments in their basket.

This article just popped up on my radar. It proposes the 3-fund Bogle model, for various reasons, over the endowment thing. It sure is simple.
Forgot the link! My apologies.

http://www.marketwatch.com/story/a-l...del-2017-02-06
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Old 02-08-2017, 05:45 PM   #48
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No. Volatility is the bigger bet you place for the expectation of higher returns.

"Over time"? What time? How much time?
Your post is confusing to me.

What do you mean by "no"?

Equities generate a substantially higher return than bonds and cash.
Since 1926 stocks annual return is ~10% and that INCLUDES all bear markets. Corporate Bonds are like 6% and treasuries a little over 5%.
It's not a smooth ride though, hence my statement that the volatility is the part of that process. 10 and 20 year rolling returns mostly ( if not always) provide greater returns for stocks over any other asset class as well.
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