When to decide to just quit investing?

Kimo said:
I am really starting to think along these lines. Maybe 80/20 with the 80 consisting of bonds and cd's.
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By traditional convention, you would say "20/80." Equities/Fixed is the traditional order of expressing AA without having to follow with an explanation of the order you are using.

And....... using that convention keeps geezers like me from getting confused when I read your interesting posts!
 
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sengsational said:
One book I read had this "eliminate all risk" strategy... I think it was this book:

https://www.amazon.com/Spend-Til-End-Raising-Standard/dp/1416548912/
Kimo said:
Looks interesting. Weird pricing on Amazon, 3.56 and it is new for Hardcover and 9.99 for Kindle. For 3.56 I can take a gander, thanks.
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I have the book and Kotlikoff's software ESPlanner. If you're looking to go all cash or simplify investing/managing your portfolio - Spend 'til The End is neither, at all...
 
A personal decision. To yourself be true. Or a variation on the popular song song, "Gotta know when to hold'em, know when to fold'em know when to just quit."

I suppose, quitting investing while many peers are still investing is similar to retiring early. Not for everyone, but may work out really really well for you.
 
Danmar said:
Where did I say you said there was a "correct answer". Come on, I'm just trying to add to the discussion by presenting an alternative view. Not win a debate.
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When you quoted me and led with "Agree with just about everything you said, but still think there is no correct answer." :confused: "Come on," if you wanted to present an alternative view, just do it - instead of labeling my view as something it definitely wasn't.

http://www.early-retirement.org/for...-just-quit-investing-87166-2.html#post1893219
 
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It's funny, once you have a lot of money, there are two mindsets that I think you can have--

1. I don't need to take any risk anymore, so I can go to all bonds/cash

2. The fluctuations of the market can't hurt me anymore, so I can go 100% stocks.

Ultimately, I am closer to the second mindset than the first, but I think each is valid. However, I also tend to temper my asset allocation based on the valuations of what I invest in ( dirty market-timer that I am). I would not be comfortable at 100% stocks at current levels no matter how much money I had. I'm at about 75/25, which is the lowest I've been since 1999/2000.
 
No. We want to at least keep up with inflation on an after tax basis.

We have adjusted our portfolio. Over the past five years of early retirement it has been over weight in equities. We are scaling that back a little and doing the rest in short term bonds. It is a managed portfolio.

We have taken advantage of sequence of returns but do not want to push the envelope. Most of our living expenses are covered by pensions, etc.
 
Kimo said:
Thanks easysurfer
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You're welcome Kimo.

I still invest as I'm not in the position to just quit and walk away. But on the part of being true to yourself, you don't want to end up living someone else's life just to fit in to their idea of what should you be doing.

I don't see a problem with just quitting at all. If you can for sure pull it off.
 
easysurfer, If I sold all my holdings except for my IRA I could use my current cd's, my annuity I already own and buy more cd's from the proceeds of the investments and start SS (66) I would be making more proceeds than I do now and I don't spend what I receive now. I would still have about 290,000 in my IRA. The above plan would generate about 80K to 85K yearly and we average 40K to 50K yearly spending the last 5 years of retirement. We also never look at something and say can we afford it, we just live our lives like we were wor**ng and don't look back. I will say we are not lavish people as even when we were making 6 digit incomes we still lived like we do today just by choice.
 
If I was in the situation of having plenty more cash than I'll ever spend in my lifetime, don't know what I'd do.

Just read there was only 1 player in the recent power ball and won almost $450 Million (before taxes). Before he or she falls in the lotto winner curse :(, I wonder if the the winner's thought is just put the winning in the bank or more money to invest?
 
Kimo said:
I know if it was me it all go in the bank with that much!
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I think another way to look how you are thinking about sitting on your cash or keep investing, is if the market goes up, would you think "Man, wish I was in the market to get those gains" or "Doesn't matter to me, I've made my decision and am living comfortably".

As, I said early, only you can decide what's best for you.
 
Kimo said:
Great question, and great answer (IMHO) I don't really pay much attention to it now.
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I use the 100 - age formula for my AA. So, plan on having at least some in equities, unless I live past 100. I think if so, then there'd be other things more pressing on my mind than how much invested I'm in.

The 100 - age formula keeps my emotions in check during the ups and downs so I don't need to decide.
 
Hamlet said:
It's funny, once you have a lot of money, there are two mindsets that I think you can have--

1. I don't need to take any risk anymore, so I can go to all bonds/cash

2. The fluctuations of the market can't hurt me anymore, so I can go 100% stocks.

Ultimately, I am closer to the second mindset than the first, but I think each is valid. However, I also tend to temper my asset allocation based on the valuations of what I invest in ( dirty market-timer that I am). I would not be comfortable at 100% stocks at current levels no matter how much money I had. I'm at about 75/25, which is the lowest I've been since 1999/2000.
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Your post reminds me why my AA is 50/50. I'm in between 1 and 2.
 
Hamlet said:
It's funny, once you have a lot of money, there are two mindsets that I think you can have--

1. I don't need to take any risk anymore, so I can go to all bonds/cash

2. The fluctuations of the market can't hurt me anymore, so I can go 100% stocks.

Ultimately, I am closer to the second mindset than the first, but I think each is valid.
Click to expand...

I'm in the 2) camp too. I approached retirement with over 100x my income requirement in savings.....because I get income from a rental property that covers 2/3rds of my budget. Then I used about 20% of those savings to buy into my employer's DB pension and that gives me another 2/3rds of my budget, so I have a surplus most months. I could put my capital in CDs and be perfectly ok, but as the ups and downs of the market don't affect my income I decided to take on more risk. So I've stopped rebalancing and I'll let my AA drift up towards 75/25. My fixed income now consists of the bond allocation in Wellesley, some TIAA-Traditional paying 4.85% and cash in a stable value fund that I use for emergencies and big ticket items.
 
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Those in #2, why not add some leverage as well? Borrow 30% and go 130% long.
 
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