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Old 06-06-2017, 01:51 PM   #61
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Tedtalks and related books on the science of happiness has also been a real money saver for me. I still feel like I'm trying to get over a lifetime of conditioning by advertising on how to increase happiness when the science of happiness can have very different recommendations, and ones that are often inexpensive. On brain wave studies, the happiest man in the world discovered so far is actually a Buddhist monk.
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Old 06-06-2017, 05:34 PM   #62
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I only adjust my AA in November. I only update my long range financial plan in February.

What me worry?
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Old 06-06-2017, 05:53 PM   #63
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Using VPW I looked at a few post WW2 declines. Here are some for a 60/40 AA and 4% withdrawal:

1969-1970 (1 year)..... -15%
1973-1975 (2 years).... -40%
2000-2003 (3 years).... -30%
2008-2009 (1 year)...... -25%

All were official recessions.

Reducing spending a bit would not really smooth these out. Might make you feel like you are doing something though. Best to have plenty of money to weather the storm or maybe reduce AA ahead of time if one doesn't have enough money going into these declines.

My simulations seem to indicate we have enough but the portfolio could decline by 50% or even a bit more should we get a future sequence that had multiple recessions close together.

Or we could just get a "normal" sequence of returns going forward. That would be nice.
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Old 06-06-2017, 10:06 PM   #64
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I'm not doing anything different right now. I will just keep building up my portfolio, focusing on income.

Once we get a crash though I will be watching the central banks. The first time they start doing QE again I will be buying 3x levered or higher ETFs.

I wish I had caught on earlier that QE means there will be no volatility and stocks can only go up. The smart thing to do is borrow as much money as possible and buy whatever is "cool". Earnings no longer matter.
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Old 06-06-2017, 11:05 PM   #65
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I am harvesting gains above the 60% stock allocation to cash and short-term funds, in similar fashion to your B below. I allow a 60-66% band, usually rebalancing at the trigger points, so I'm hugging the minimum allocation, for similar reasons.
This allows stock funds to "run" but I'm keeping the allocation "tight"--I've sold/rebalanced twice in the last year, which is unusual. Cash is higher, only because bond yields have moved significantly downward; I'll move some cash to bond funds if/when yields move upward.


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What tactical moves are others doing as their money grows in these good times?

As an example, here is what I've done:
A) Continued to stick with my current AA
B) In the fixed income part I moved some intermediate bond money to a short term investment grade bond fund. This should see us through the worst of the bad sequence years (like those starting in 1966, 1929, and 1906).

Regard (B), this is enough to cover:
(1) a Reserve account to boost normal portfolio spending should we have a very bad sequence of returns going forward
(2) the next 12 months of spending

So I think I've insured that even in a very bad sequence of return years we should be able to spend at levels that will please even DW. Now I can relax ... I think .
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Old 06-06-2017, 11:13 PM   #66
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I started using one of the Vanguard Balanced portfolios that was close to a 60-40 allocation as my benchmark, a couple years after I started reducing stock allocation, which had been > 90%. I realized the S&P wasn't a good benchmark for a more balanced portfolio allocation. Given my foreign allocation and a couple other portfolio allocation, there was a divergence, both up and down, but it was a better benchmark.


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So true. I never understood why the S&P500 had to be the benchmark for comparison. Always and everywhere there are other ways to invest and other things to invest in that could have made more money. If you have a balanced portfolio you will beat the S&P on the way. And be holding the bag for missed profits on the way up. And using a 100% S&P AA is fine too. I guess....? My personal benchmark is "Do I have enough money?"

Personally I couldn't do what robbie is doing. ie Take a lifetime of money and give it to somebody else and, "See ya later" But if he can, hey, it's his bread and I'm sure he's meeting his benchmark 'cause he has enough money.

As far as what I do in good times to prepare for the bad times: I try not to spend too much
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prep for the bad
Old 06-06-2017, 11:37 PM   #67
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prep for the bad

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Originally Posted by daylatedollarshort View Post
...but I have stockpiles of staples...
I googled "metal staples" and this is what came up. I guess if a person has to stockpile something to prep for the bad, this just might make the bad extremely pleasant.
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Old 06-07-2017, 01:17 AM   #68
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What I do in good times to prepare for future bad times?

I try not to let my spending go up to use up all that excess return. I try to remind myself that all good times must end at some point.

As a practical example, I do not stay too long in expensive Switzerland in this trip and prefer more time in France. Compared to the former, France is so cheap. Heh heh heh...

But as time goes on, I also realize that I am getting closer each day to that proverbial hole in the ground. Can't let financial worries detract from my remaining time too much. I still have that 25' motorhome to serve as the housing of last resort. No fear of living under a bridge for me. Heh heh heh...
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Old 06-07-2017, 05:34 AM   #69
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I've been stockpiling single malt scotches.
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Old 06-07-2017, 05:45 AM   #70
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Have been reducing risk exposure to stocks from 90/10 over the past year to 60/35/5 as we get ready to retire this month. With 2.5% WR we have 2 years living expenses in CASH. Also creating a Bond ladder with bond part of the portfolio to cover our living expenses thru age 70. Will not need to draw from equities in the event market dives and stays down for several years.

Cheers,
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Old 06-07-2017, 05:55 AM   #71
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I've been stockpiling single malt scotches.
Part of my being frugal is doing mail order from Masterofmalt.com. Quite a bit
cheaper to buy scotch from Scotland even though the shipping is killer. The
selection is better than any place I've shopped at a brick-n-mortar as well.

I like to keep at least 18 months ~ 2 years of scotch and bourbon stocked in
case there is a downturn in the market, hehe.
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Old 06-07-2017, 06:32 AM   #72
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About the only adjustments I have made in the last year is to diversify away from some of the riskiest parts of my portfolio and add more to the stable bond fund and dividend fund. When we get a downturn, it will come as a thief in the night. It usually does. I am a little light on equities at 30%. Maybe that is not such a bad thing since the market seems expensive.
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Old 06-07-2017, 07:26 AM   #73
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Part of my being frugal is doing mail order from Masterofmalt.com. Quite a bit
cheaper to buy scotch from Scotland even though the shipping is killer. The
selection is better than any place I've shopped at a brick-n-mortar as well.

I like to keep at least 18 months ~ 2 years of scotch and bourbon stocked in
case there is a downturn in the market, hehe.

Brilliant! That's what I like about this forum. No matter how clever I think I am, there is someone out there to help me do it just a tad better.
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Old 06-07-2017, 07:32 AM   #74
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Rebalance to stick to the boring safe AA, even though it is very tempting not to.
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Old 06-07-2017, 08:12 AM   #75
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Part of my being frugal is doing mail order from Masterofmalt.com. Quite a bit
cheaper to buy scotch from Scotland even though the shipping is killer. The
selection is better than any place I've shopped at a brick-n-mortar as well.
Thanks- my favorite whisky dealer in Edinburgh (Cadenhead's, also in business as The Tasting Room in London) didn't ship to the US, leaving me to hope it made it safely home in the checked bags (it always did) or ship it myself but fib about the contents. MasterofMalt must have to jump through hoops to comply with applicable regs and that drives the shipping cost up. When I'm feeling extravagant I may order a few bottles!
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Old 06-07-2017, 08:20 AM   #76
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Don't worry about me I'm used to it. Ever since I've been here "helpful" people have been trying their very best to "correct" my errant investment practices.

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You seem to have a pretty great lifestyle so something must be working well. May be a different path than some others would choose but hey - bidets and filets - sounds like you're enjoying your life and your asset performance is meeting your needs. Well done!
Agree. It works for Robbie and he's happy so I don't see the problem. For me.....I'm just staying conservative. More so than most here. SS + investment income exceeds what I spend, so in effect..... I'm saving for those rainy days ahead. Very little activity in my brokerage acct.
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Old 06-07-2017, 08:23 AM   #77
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Nope. I think the referenced blm is in prison.
Is he like Voldermort? "He who must not be named"
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Old 06-07-2017, 08:29 AM   #78
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Pretty much,nothing. I'm paying off a little debt from living high on the hog (for me) the first half of the year. Older son got married, niece having her first kid and another niece graduating h.s. and honorable son #2 needed a new car, went on a mini family reunion.

So all in all, I'm not changing much of anything.
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Old 06-07-2017, 08:41 AM   #79
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I am not doing anything at this point. Prior to retirement, reduced AA from about 90/10 to between 60/40 and 50/50, where I am comfortable. Still LBYM lifestyle and could cut back travel and gifting to kids if needed.
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Old 06-07-2017, 09:00 AM   #80
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Quote:
Originally Posted by Lsbcal View Post
Using VPW I looked at a few post WW2 declines. Here are some for a 60/40 AA and 4% withdrawal:

1969-1970 (1 year)..... -15%
1973-1975 (2 years).... -40%
2000-2003 (3 years).... -30%
2008-2009 (1 year)...... -25%

All were official recessions.

Reducing spending a bit would not really smooth these out. Might make you feel like you are doing something though. Best to have plenty of money to weather the storm or maybe reduce AA ahead of time if one doesn't have enough money going into these declines.
I would agree if the only income source is from one's investments.

However if the spending reduction means that one is not spending any more than pension+SS, for example, or perhaps pension+SS+dividends, then that spending reduction does a whole lot more than it otherwise might.
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