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Old 12-24-2023, 04:32 PM   #21
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Outside of the magnificent 7, the other 493 companies are not outrageously valued on average.
I'm old enough to remember "the nifty fifty". If memory serves that did not end well. Any similarities between the magnificent 7 and the nifty fifty are strictly coincidental I'm sure.
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Old 12-25-2023, 04:35 AM   #22
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The S&P just feels to frothy so I’m “Aggressively Rebalancing” and pulling all 2024 spending from equities this week.
I always pull the next year's spending in late Dec.
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Old 12-25-2023, 04:59 AM   #23
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I'm old enough to remember "the nifty fifty". If memory serves that did not end well. Any similarities between the magnificent 7 and the nifty fifty are strictly coincidental I'm sure.
They had PE of 42 with slow growing earning.

Even sky high flying NVDA has forward PE of 24-25 and high earnings growth. You may have missed the train.
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Old 12-25-2023, 03:27 PM   #24
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Still not aggressively rebalancing. Just moving proportions from retirement to taxable, since taxes are not a worry at all.

As for P/Es that are way too high: I steer clear of the big, monster, global stocks whose popularity has driven demand for shares too high, and the PE along with it. in other words: before you can even think about the prospect of buying, it's a "too crowded" trade. I search extensively for low P/E, low-ish stock price, good results on investments over at least several years. Stocks that are a step or two away from the bright lights and all the attention.

Rarely, I'll put money into a newer stock. Like Postal Real Estate. PSTL. A very small holding, still.
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Old 12-25-2023, 04:24 PM   #25
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Ya know, I see restaurants full, hotels full, lots of buying, new stuff everywhere ... it seems to me (famous last words) 2024 is going to be positive ... the only weird stuff is the presidential election.
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Old 12-25-2023, 04:31 PM   #26
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Yes, stocks are expensive right now. The SP500 PE ratio is 26.27 right now, while the historical mean is 16.04 according to https://www.multpl.com/s-p-500-pe-ratio

“Reversion to the mean is the iron rule of the financial markets.” — John C. Bogle.
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Old 12-25-2023, 04:34 PM   #27
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Yes, stocks are expensive right now. The SP500 PE ratio is 26.27 right now, while the historical mean is 16.04 according to https://www.multpl.com/s-p-500-pe-ratio

“Reversion to the mean is the iron rule of the financial markets.” — John C. Bogle.
Bogle is dead...it's a whole new world.
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Old 12-25-2023, 04:43 PM   #28
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Bogle is dead...it's a whole new world.
Kind of like the Cape10 has only been at its historical average one time in the last 14 years.
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Old 12-26-2023, 04:41 AM   #29
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Yes, stocks are expensive right now. The SP500 PE ratio is 26.27 right now, while the historical mean is 16.04 according to https://www.multpl.com/s-p-500-pe-ratio

“Reversion to the mean is the iron rule of the financial markets.” — John C. Bogle.
On that graph of 12 month trailing PE click on graph for last 20 years. Mean looks like maybe 22 and minimum looks like 15. You are going to wait for a while for trailing PE of 16

Do not forget that we are comming from period of earnings recession. Things don't look crazy to me.
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Old 12-26-2023, 05:24 AM   #30
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Now look at forward PE (Not trailing) and all the sudden that graph looks pretty good.

https://www.gurufocus.com/economic_i...rward-estimate
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Old 12-26-2023, 06:01 AM   #31
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I've been slowly rebalancing this month as I'm preparing to take RMDs next year.

Oh, and Bogle lives in the hearts and minds of all of us who use index funds as our core portfolio holdings. Stay the course my friends and don't let the noise bother you.
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Old 12-26-2023, 08:27 AM   #32
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Used to sell and withdraw once a quarter. It’s gone screwy since 2020 as I have troubles spending since then.
I need Robbie back to post those BTD inspirations. Going to use this run up to pay off the HELOC I took out to help DD2 buy her house.

That sounds like a perfectly reasonable "rebalance" to me!
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Old 12-29-2023, 07:03 PM   #33
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Getting that feeling in my gut again. The S&P just feels to frothy so I’m “Aggressively Rebalancing” and pulling all 2024 spending from equities this week. No math. No expert recommendations. No Technicals. Just gut feeling.

Not really a large enough amount to make any difference really. 62/38 to 58/42 AA

It’s worked out well a few times now.
https://www.early-retirement.org/for...er-100610.html

Hope the Santa Rally continues. Might pull 2025 spending too.
Like you, in the past, I've sometimes scraped 1/3 or 1/2 of gains in sectors whose values have rocketed and seem a bit pricey, to send to cash for the next year or two withdrawals. With cash at close to 5% now, this is a lot more painless than it has been when cash was .2%.


Like you I've been a little nervous about those gains in the Nifty 7 or whatever they are called. I looked at one of my core funds, Fidelity Contrafund, and it is almost up 40% and is highly weighted, like the index, on those top 7 S&P stocks. So I sold about half of the gains, and stuck them in small/mid cap and a fairly long intermediate Treasury fund, to increase bond duration.

Otherwise, I did more work than I've done since 2015 before semi-retirement, and got rid of 9 funds scattered across 5 accounts by consolidating smaller bond and stock fund holdings. If it's not at least 3.5% of my total portfolio, it's not worth holding, and by 2025 I want to increase that criteria to 5%. My Quicken holdings, including the stocks, fit on one screen now! It's a little complicated by money scattered across 5 accounts, but it used to be 6 accounts (I'm not counting two extremely small Roth IRAs) and I can move the DW's Etrade IRA roll-over to her main Fidelity IRA account next year, to simplify even more.

Not all of my sales/additions have posted, so I'll have to look at Quicken over the weekend, look at the new allocations, and do some more clean-up on Jan 2, including targeting what to use for withdrawals in 2024. Part of the overall goal was to decrease large-cap growth and increase value and intermediate bond holdings, but I may have misunderestimated some.
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Old 04-02-2024, 10:23 AM   #34
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Turned out to be a minor mistake. Certainly would have been better off selling the one quarter at a time instead of the full years expenses.

C’est la vie
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Old 04-02-2024, 04:21 PM   #35
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Turned out to be a minor mistake. Certainly would have been better off selling the one quarter at a time instead of the full years expenses.

C’est la vie
Nobody has a crystal ball, and many (who sold out completely at market bottom) have done a lot lot worse.
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Old 04-02-2024, 04:41 PM   #36
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Set up an investment plan and stick to it. Attempting to time and then second guessing yourself, you will drive yourself crazy.
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Old 04-02-2024, 06:53 PM   #37
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Turned out to be a minor mistake. Certainly would have been better off selling the one quarter at a time instead of the full years expenses.

C’est la vie

No-one rings a bell at the top. I don't mind scraping some gains each quarter or half year.
The last two days may make you feel better. But you never know. I just sell and don't look back. You could argue waiting until the same day every year is a better method, but I doubt it. You're going to have to sell sometime, unless you have enough bonds and dividends to fund your needs (which I've never had). SS is coming Jan 2025, though! After that, bonds and dividends might fund it (and almost certainly with capital gains).
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Old 04-03-2024, 06:00 AM   #38
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Rebalancing based on "gut feeling about S&P 500 valuation" from 62/38 to 58/42 AA is market timing.

Don't be surprised that it usually fails.
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Old 04-03-2024, 11:59 AM   #39
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My various accounts are all quite heavy in stock funds and I no longer rebalance.
My only routine withdrawal is my RMD and I take that as twelve equal monthly payments. So not much timing going on for me...
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Old 04-03-2024, 02:09 PM   #40
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One can "rebalance" in a sense by taking all your spending funds from equity, for example, in high growth periods. This can be done without overthinking things too much.

Rebalancing is not an exact science, more a rule of thumb.
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