Bikerdude said:
What was your asset allocation then and now and have you changed your SWR?
Boy, thanks for helping us relive those days. Don't miss 'em a bit.
I retired a bit later than your deadline-- June 2002. One of the market lows was reached a month later, another in October, and then there was some more market anxiety in early 2003. However none of them were as bad as Sep 2001 so we were worrying less.
Our ER portfolio is up 43% since June 2002. A few percent of that over the last five years is due to contributions from spouse's Reserve drill pay.
Our asset allocation was:
37% Tweedy, Browne Global Value
15% Berkshire Hathaway
12% S&P500 ETF (SPY)
6% NASDAQ QQQs
4% Disney, Lowes, & Kraft
1% TSP "S" fund
25% Cash (stopped out of a lot of QQQs, banking my pay for the last six months)
TBGVX was the only asset "holding" its value back then at $18.91/share, dipping as low as $13.48 in Mar 03. I remember that we'd spent almost two years jumping in & out of the NASDAQ QQQs back then, starting around $60/share, and couldn't believe how cheap they were in June 2002 at $30. In Oct 02 I had an overwhelming "Aw, c'mon" reaction and started buying around $22. But it still took us over a year (and reading a lot of Bernstein) to get completely back into the market.
Today:
9% TBGVX (started selling around $30/share, up to $33.96 last week)
21% Powershares International Dividend ETF (PID)
30% Berkshire Hathaway
15% S&P600 small-cap value ETF (IJS) & TSP "S" fund
9% DOW Dividend ETF (DVY)
10% Eagle Shipping, Diana Shipping, Tate & Lyle, Superior Industrial, Intel (EGLE, DSX, TATYY, SUP, INTC).
6% Cash.
Tomorrow: approximately equal amounts of PID, Berkshire, IJS, & DVY with about 5-10% cash. Of course testosterone-poisoned stock-picking is interfering with that goal. Hypothetically in 2008 we could harvest a lot of the individual stocks without worrying about cap gains, or we could donate appreciated shares to charity.
Our 2003 SWR (first full year of retirement) was under 3% but spouse worked about 50 days that year. She's worked a lot less since then so our SWR has risen a bit.
We're about out of the SWR debate for the next year. Our rental property, operated at a wash when parents-in-law were living in it, has started throwing off a good bit of income this month with the new tenants. By next year we'll have earned back the rehab and the rent will be covering a good chunk of our expenses. It was a surprise-- I didn't think we'd get that property back under our control for at least the next 20 years. We still need to look at the numbers and decide if the rental income is beating a long-term CD rate but it appears that either one will support the rest of the ER portfolio indefinitely.