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What you do in good times to prep for the bad?
06-05-2017, 03:40 PM
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#1
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2006
Location: west coast, hi there!
Posts: 8,809
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What you do in good times to prep for the bad?
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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06-05-2017, 03:47 PM
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#2
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2016
Posts: 8,968
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Nothing.
I let my FA worry about that stuff.
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06-05-2017, 03:52 PM
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#3
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Dec 2015
Location: Michigan
Posts: 5,003
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I have just RE'd this year and am slowly reducing my equity AA as the market rises. At 61% going to 60 shortly.
__________________
"The mountains are calling, and I must go." John Muir
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06-05-2017, 03:58 PM
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#4
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2006
Location: west coast, hi there!
Posts: 8,809
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Quote:
Originally Posted by DrRoy
I have just RE'd this year and am slowly reducing my equity AA as the market rises. At 61% going to 60 shortly.
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Ours is at 60% too. If it gets above 61% I push it back down to 60%.
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06-05-2017, 03:59 PM
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#5
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2006
Location: west coast, hi there!
Posts: 8,809
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Quote:
Originally Posted by RobbieB
Nothing.
I let my FA worry about that stuff.
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Nice. What is your FA doing to your account if anything as the good times roll on?
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06-05-2017, 04:04 PM
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#6
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2016
Posts: 8,968
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He's buying and selling all sorts of stuff. I get trade confirmations more often than statements. I was a little nervous at first with all the activity but I don't pay trade fees and I'm making lotsa dough.
Going to meet with "the team" week after next and review the plan.
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06-05-2017, 04:13 PM
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#7
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2002
Location: Texas: No Country for Old Men
Posts: 50,022
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Quote:
Originally Posted by RobbieB
He's buying and selling all sorts of stuff. I get trade confirmations more often than statements. I was a little nervous at first with all the activity but I don't pay trade fees and I'm making lotsa dough.
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That's exactly what BLM's clients said...
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Numbers is hard
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06-05-2017, 04:19 PM
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#8
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Thinks s/he gets paid by the post
Join Date: Mar 2013
Location: Southern California
Posts: 3,999
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Quote:
Originally Posted by RobbieB
He's buying and selling all sorts of stuff. I get trade confirmations more often than statements. I was a little nervous at first with all the activity but I don't pay trade fees and I'm making lotsa dough.
Going to meet with "the team" week after next and review the plan.
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Hmmm...
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06-05-2017, 04:20 PM
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#9
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2016
Posts: 8,968
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The Bureau of Land Management is in financial services now?
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06-05-2017, 04:34 PM
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#10
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Thinks s/he gets paid by the post
Join Date: Aug 2013
Posts: 1,660
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Nope. I think the referenced blm is in prison.
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06-05-2017, 04:38 PM
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#11
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Full time employment: Posting here.
Join Date: Aug 2013
Location: https://www.google.com
Posts: 750
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Quote:
Originally Posted by Lsbcal
What tactical moves are others doing as their money grows in these good times?
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Staying the course with AA, but I've been putting some gains into physical real estate. Not paper assets, but physical property. Closing on a piece of land next week in one of the ski resort areas near us.
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06-05-2017, 04:41 PM
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#12
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2016
Posts: 8,968
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Oh Bernie -
Nah, I'm with BofA / Merrill Lynch and I'm up 6% (including fees) YTD. So yeah, I'm making a lotta dough just like everyone in the market. No *****-pocus, no funny business, just a managed account.
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06-05-2017, 04:43 PM
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#13
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Thinks s/he gets paid by the post
Join Date: Mar 2013
Location: Southern California
Posts: 3,999
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Quote:
Originally Posted by RobbieB
Oh Bernie -
Nah, I'm with BofA / Merrill Lynch and I'm up 6% (including fees) YTD. So yeah, I'm making a lotta dough just like everyone in the market. No *****-pocus, no funny business, just a managed account.
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OK, but the S&P 500 is up 8.81% YTD, so why are you only up 6%? You're underperforming the index by almost 3%!
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06-05-2017, 04:48 PM
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#14
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2016
Posts: 8,968
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Maybe I am up 8%, May statement hasn't arrived yet. I don't go online and look everyday. I don't even go online and look at all. Once a month in the mailbox is good enough.
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06-05-2017, 04:50 PM
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#15
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Thinks s/he gets paid by the post
Join Date: Sep 2006
Posts: 1,743
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Sticking to an AA of approx 50/42/8 established 5 years ago with 3 years of spending in cash and short term bonds.
In case of an extended market downturn we will consider collecting SS earlier than originally planned to reduce the WR.
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What you do in good times to prep for the bad?
06-05-2017, 04:50 PM
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#16
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Moderator Emeritus
Join Date: Jan 2007
Location: New Orleans
Posts: 47,501
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What you do in good times to prep for the bad?
Love this topic!
INVESTING:
I am sticking to the same investment AA as always (45:55, including index funds, TSP "G Fund", and VWIAX Wellesley). I have about 6 years in cash. This AA did well by me in 2008-2009 so I feel it has been well tested.
Right now I am pretty well set with income from pension, SS, and dividends, as things presently stand. I base my yearly WR on my investment portfolio total on 12/31 each year. So, it is variable and spending flexibility is tremendously important.
SPENDING:
I am working on my spending patterns, trying to position myself so that my monthly required spending is lower, allowing enough flexibility for overall spending to be drastically cut back ASAP if need be.
For example:
$110/month savings from cancelling my cable TV and only using OTA reception
..$39/month savings from cancelling my land line
..$31/month savings from switching from Verizon to Cricket
$105/month savings on generic prescriptions that recently became available, just good luck
$285/month total savings for the above (= $3420/year)
Right now I am spending this saved money on discretionary stuff, but I can cut that off instantly whenever necessary.
No loans of any kind to pay. Enough clothing to last me until doomsday if need be. A nice paid off house with low utility bills and upkeep expenses.
Also trying to get some major dental work done and out of the way. Making sure my house and car are in good repair.
I guess that about covers it.
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities. - - H. Melville, 1851.
Happily retired since 2009, at age 61. Best years of my life by far!
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06-05-2017, 05:01 PM
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#17
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Thinks s/he gets paid by the post
Join Date: Nov 2009
Location: SF East Bay
Posts: 4,342
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My target AA is 60/40 and, so far, I have managed to keep it within bounds with a couple of my regular stock sales that were executed in order to generate income. Have not had to purposely rebalance so far. My equity portion is currently at about 67%. If the market starts to go down soon, I may not have to rebalance. However if it goes above 70%, in theory, I should probably rebalance. In practice, I will probably hang on "just a bit longer" to see what happens.
I think I'm reasonably comfortable with volatility, so if the equities portion gets a little too high just as the market is taking a dive, I think I can live with that.
In other words, I'm starting to come to terms with the possible fact that my rebalancing strategy might well be very casual.
__________________
Contentedly ER, with 3 furry friends (now, sadly, 1).
Planning my escape to the wide open spaces in my campervan (with my remaining kitty, of course!)
On a mission to become the world's second most boring man.
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06-05-2017, 05:12 PM
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#18
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2016
Posts: 8,968
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Another reason I don't worry is I have a very low fixed overhead. All my "core" expenses;
Health insurance
Property taxes
Utilities
Motor vehicle license and insurance
HO insurance, earthquake and umbrella
Internet, cell and top tier TV
are all covered by my SS survivor income which is much less than what I'll get when I file. All I have to support is food, drink and fun -
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06-05-2017, 05:21 PM
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#19
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Feb 2013
Posts: 9,358
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Quote:
Originally Posted by W2R
Love this topic!......
SPENDING:
I am working on my spending patterns, trying to position myself so that my monthly required spending is lower, allowing enough flexibility for overall spending to be drastically cut back ASAP if need be.
For example:
$110/month savings from cancelling my cable TV and only using OTA reception
..$39/month savings from cancelling my land line
..$31/month savings from switching from Verizon to Cricket
$105/month savings on generic prescriptions that recently became available, just good luck
$285/month total savings for the above (= $3420/year)
Right now I am spending this saved money on discretionary stuff, but I can cut that off instantly whenever necessary.
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My favorite topic, too. We've been going through the bills the same way and there seems to be no end to ways to lower expenses fairly painlessly. I think because we weren't too careful before we still have many opportunities for expense optimization. We just keep tackling a few expenses every month and over time it has really helped lower our annual withdrawal rate.
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Even clouds seem bright and breezy, 'Cause the livin' is free and easy, See the rat race in a new way, Like you're wakin' up to a new day (Dr. Tarr and Professor Fether lyrics, Alan Parsons Project, based on an EA Poe story)
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06-05-2017, 05:39 PM
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#20
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Dryer sheet aficionado
Join Date: Oct 2015
Posts: 40
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Quote:
Originally Posted by Ready
OK, but the S&P 500 is up 8.81% YTD, so why are you only up 6%? You're underperforming the index by almost 3%!
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That would be assuming 100% investment in the S&P 500 - correct?
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