What portfolio mix do you have given current situation

[Russman]

Hi all,

Wanted to hear from others on this site, on what portfolio mix you are currently running with (ie Stock vs Bond vs Cash/money market).

I currently have a mix of 60% stock, 18% bonds and 22% cash.

Given the uncertainty in Syria, QE pullback, replacement of Bernanke,
historical pattern of September being a bad month...I'm feeling like there could be a correction this month. Therefore, i was thinking of selling off some equities and waiting for the correction...and then maybe buying again once things become more clear (if that's even possible), say..first part of next year. Maybe going to 50% cash for a few months.

I know you'll probably counsel me to not try to time the market and stick with the long term plan, but given the gains we've already seen since October of last year, would it not be prudent to pull back some equity for cash ?

I know you folks are pretty darn savvy, and I appreciate hearing from a mix of opinions.

Thanks.

 

[Fermion]

I switched to nearly all cash during the summer using deep in the money covered calls where I could do so without tax issues. This worked out pretty well, giving me about a 20% gain so far this year. I don't even have the cash in bonds, because there is no guarantee they will not drop 10% or more too. I should put them in something....maybe a 3 month CD for 0.2%

I figured be happy with a 20% gain for the year even if the rest of you end up making 30%. I will be happy for you too.

So...right now I am 80% cash 20% stocks.

 

[Animorph]

In general, no it's not a great idea. Make sure you have a plan for when to buy back, under any conditions. What happens if the market goes up 10%, do you buy back in or stay out? What if it goes down 10%, buy now or stay out? What if it goes down 10% and then back up 10%, buy now or stay out? What if it goes down 10%, you buy back in, and it goes down another 10%? Plenty of stuff to think about. And most of the time you have to listen to TV guys telling you to do the wrong thing. Have a plan, stick to it, and make sure you're happy with the results of what you did regardless of the outcome.

I was happy to raise significant cash before I retired. If the market continued up, I had cash for expenses. If it went down I had cash for expenses and, as it turned out, some left over to reinvest in the down market. A good outcome in either case.

 

[Fermion]

Weigh positives and negatives, evaluate the risk vs reward, then determine if it is a reasonable time to be in the stock market and bond market.

Stock market seems a little risky right now. Bond market has improved, but still not a great reward for the risk. If I am force into bonds, I would go pretty short duration.

 

[easysurfer]

I've got about 50% stocks, 35% bonds, 15% cash.

AA are chosen percentages and not based on current situations.

 

[pb4uski]

Other than opportunistic rebalancing when I am overweight on an asset class and think the market has gone too far to fast for a particular asset class, I don't market time at all, principally because the difficulty isn't so much when to get out but more when to get back in so to make out you need to make both of those decisions right.

My AA is 60% stock (42% domestic, 18% international), 34% bond (27% domestic, 7% international) and 6% cash (18-24 months of living expenses).

....I should put them in something....maybe a 3 month CD for 0.2% ...

How about an online savings account? They pay 0.8-1.0% if you shop around.

 

[FIREd]

Here my current asset allocation:

I am a bit heavy in US small caps and that is a concern. But I do not plan any drastic change in response to the current situation.

 

[Midpack]

Like many/most here, I'm not a market timer. There's always "BIG NEWS!!!" - it's noise 99% of the time. My AA is below...

 

[jebmke]

I'm right where I expect to be - 40/60.

 

[Ubuntu]

This is what I have been thinking about, since I am just finishing liquidating my portfolio that I had with Ameriprise before moving over to Vanguard. Oh well... "Wherever you go, there you are (i.e. no whining)

 

[trirod]

I'm at 79% stocks and 21% bonds, right in accordance with my long term plan. I don't try to time the market because I firmly believe that doing so will reduce my returns over the long term. Other people may have more success than me at that...

 

[jollystomper]

I'm currently 45% stocks, 28% bonds, 27% cash. Large amount of cash due to (a) the last large planned expenditures - new car and last kid's college education, and (b) a number of years of annual SWR that compliments my pension to meet our planned retirement income. Perhaps too conservative but it means I won't be forced to sell equities for a number of years to meet our planned SWR, and it lets me sleep at night.

 

[target2019]

Small/Midcap index funds had grown beyond our desired allocation. We moved 4% overall into a guaranteed interest fund and Wellesley.

In my 401k I stopped feeding my small/mid index fund, and future contributions for rest of year will go to developed markets.

 

[Donzo]

I recently checked on my true allocation. I went to 50/50 several months ago. I am currently 57% equity/38% bond/5% cash. I won't make any changes through 2013. I will increase my cash position at some point in 2014 from a mix of stock and bonds sales. I want to stay between 50/50 and 55/45 with about 2 years cash on the side.

 

[LOL!]

My current situation is that I am early semi-retired, so that means about 35% fixed income and the rest in equities or commercial real estate. I try to keep cash to a minimum, say 2 weeks of expenses.

 

[scrabbler1]

I am 64/36 (in favor of bonds) in my non-retirement accounts and 50/50 in my IRA, or 59/41 combined (in favor of bonds).

 

[ClockWatcher]

I currently have 30% domestic stocks, 30% international stocks, 20% domestic bonds, 5% international bonds, and 15% cash. While I'm not expecting a crash, I have trouble seeing how the market can go up much more from here. This asset allocation is on the conservative side for me.

 

[MooreBonds]

Age 36, hoping to retire in about 10 years.

Current allocation:
Fixed income - 14% (2/3 preferred stocks, 1/3 I-bonds)
Equities - 86% (big range of emerging markets, international and domestic, both ETFs/funds and individual securities, with significant parts in MLPs, Business Development Companies, and various other stocks).

I never try to hold onto cash - at least, during my accumulation phase. There's usually a list of several positions I want to initiate/add to at all times. And if disaster truly strikes, I can liquidate a few I-bonds for some emergency money.

Current overall portfolio yield - about 4.3%, which would allow me to retire right now and enjoy life very well, while having some decent capital growth to offset inflation (hopefully more than offset! ). Aiming to live off of about 2.75% WR once actually retired, which should be readily achievable with dividends.

 

[Russman]

Thanks all for your responses. As someone mentioned, the tricky part of pulling out of the market leaves you with a predicament of when to jump back in
(and possibly missing some big gains). I think staying with my original mix works best for my situation and comfort level (even tho I probably might be a bit heavy on cash - compared to most of the other responses). The thing I have to do is not worry to much about the day to day volatility - or overreact to a correction.
Likelihood of a correction is always out there, but the market does historically perform well over the long term.

 

[Lucantes]

15% in Cash.
43% in Stocks (individual growth/dividend stocks and Vanguard funds)
5% in Bonds (Vanguard Wellington fund).
11% in Real Estate (undeveloped waterfront property, not primary house).
26% in Lump Sum Pension (not sure what this is considered?).

I do not try to “time” anything as I do not believe I have that skill, knowledge, ability, precognition or superpower!

I keep putting money in every month and let it all average out.

 

[Midpack]

Thanks all for your responses. As someone mentioned, the tricky part of pulling out of the market leaves you with a predicament of when to jump back in
(and possibly missing some big gains). I think staying with my original mix works best for my situation and comfort level (even tho I probably might be a bit heavy on cash - compared to most of the other responses). The thing I have to do is not worry to much about the day to day volatility - or overreact to a correction.
Likelihood of a correction is always out there, but the market does historically perform well over the long term.

Rebalancing helps mitigate our collective inability to time the market...that's what it's for.

 

[seraphim]

Currently 61 stock, 11 bond, 29 cash (stable value accounts earning around 3%). The original plan was to, when I FIRE'd first of June, was to transfer that cash into bond funds for a 60s/40b AA, but given the current outlook for bonds, I figured those stable value accounts would function well as fixed income ( in lieu of bonds) in the 60/40 AA. Didn't want to put new money into bonds at this time. Just transferred $375k from those SV accounts into stock funds, to establish the AA I wanted. That's long-term money (20+ years). 60% stocks may seem a bit high for a retiree, but our pensions cover our expenses and - if we do draw from investments - it would be no more than 2% flat (no automatic COL increases).

 

[photoguy]

I know you'll probably counsel me to not try to time the market and stick with the long term plan, but given the gains we've already seen since October of last year, would it not be prudent to pull back some equity for cash ?

If you have to ask others if you should be a market timer, then you probably shouldn't.

 

[scrinch]

17% Cash
23% Bonds
37% Stocks
19% Real Estate
4% Metals

 

[jkern]

27% Stocks
21% Bonds
17% Cash
35% Investment Real Estate


Note: Real estate is high due to recent 60% appreciation