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Old 05-01-2021, 08:46 PM   #21
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Originally Posted by LOL! View Post
That's an old myth that we really need to stop perpetuating or at least change to something factual such as:



"An old joke is that the best performing accounts at Fidelity, etc. are owned by people who either forgot about them or DIED."


Hmmm, there are approximately one million citations on the Internet of that Fidelity study but it appears you are right that no such study exists, so your amendment is a good one.
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adjusting AA suddenly
Old 05-02-2021, 02:00 PM   #22
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adjusting AA suddenly

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Originally Posted by pb4uski View Post

I too would be nervous about investing in stocks at these levels. I was 60% equities but bailed out last year and no regrets... I think the stock market is a bit crazy right now and I have no interest in investing at these valuation levels.
Sorry to hijack a bit, but I've been wondering about this for a while, and it's a small question. And I don't know how to split into a separate thread!

Anyway, when people say they "bailed" I assume that means sold a bunch of the equities for something more conservative. People make it sound like something done quickly, but I looked into doing that and to move the AA a significant amount that's going to look like a huge income that year and 20%+ tax rate on the capital gains. I would have to move gradually over several years if I don't want that. I know everyone's different but... do they just accept the inefficiency as the cost of "sleep at night"? Or I suppose they could be doing the adjustment in an IRA? Though if you're young there's little point since you won't get that money anyway until well after whatever it is the market might do in the short term.

Or... and I guess this is more likely considering where I am, perhaps most people saying that are retired and have no normal income, at which point they can absorb a lot more capital gain with low taxes.

So it seems that AA adjustment in the conservative -> risky direction can likely be done freely, but the other way must be done gradually... am I missing something?

I guess this is the opposite problem from the OP!
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Old 05-02-2021, 02:30 PM   #23
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I don’t know about others, but any AA rebalancing I do is in an IRA.
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Old 05-02-2021, 02:38 PM   #24
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I think many people have a lot of their money in retirement accounts so they can make changes with no tax consequences.

I wouldn’t sell off stocks in a taxable account unless absolutely necessary.
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Old 05-02-2021, 02:46 PM   #25
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Hate the ideal of putting 1m plus into this market with indexes at all-time highs but understand I need this cash to earn more than the 1/2 percent I'm getting now.

Been thinking about this for awhile but can't pull the trigger and my gut tells me doing nothing is not the answer.

Thoughts?

Thanks!
Your intro has an almost apologetic tone, but from my perspective it sure looks like you have done well for yourself, so nothing to feel bad about. IF you ultimately decide to change course to a more aggressive strategy, remember it doesn't have to be an all or nothing approach. You can ease into a different allocation by simple dollar cost averaging.
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Old 05-02-2021, 07:17 PM   #26
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I think many people have a lot of their money in retirement accounts so they can make changes with no tax consequences.

I wouldnít sell off stocks in a taxable account unless absolutely necessary.
Got it, I thought that might be the situation.

Just gotta be patient and move slowly I guess.
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Old 05-02-2021, 09:13 PM   #27
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Got it, I thought that might be the situation.

Just gotta be patient and move slowly I guess.
Some rebalancing can also be done with new money going in if you arenít retired yet, or by not reinvesting income if you are retired, but as you note itís harder to move the needle that way the larger youíre portfolio is.

Iím still employed and we save and invest over 100K/year so redirecting new money can help shift the balance if we want it to.
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Old 05-02-2021, 09:46 PM   #28
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Originally Posted by Bullwinkle View Post
Sorry to hijack a bit, but I've been wondering about this for a while, and it's a small question. And I don't know how to split into a separate thread!

Anyway, when people say they "bailed" I assume that means sold a bunch of the equities for something more conservative. People make it sound like something done quickly, but I looked into doing that and to move the AA a significant amount that's going to look like a huge income that year and 20%+ tax rate on the capital gains. I would have to move gradually over several years if I don't want that. I know everyone's different but... do they just accept the inefficiency as the cost of "sleep at night"? Or I suppose they could be doing the adjustment in an IRA? Though if you're young there's little point since you won't get that money anyway until well after whatever it is the market might do in the short term.

Or... and I guess this is more likely considering where I am, perhaps most people saying that are retired and have no normal income, at which point they can absorb a lot more capital gain with low taxes.

So it seems that AA adjustment in the conservative -> risky direction can likely be done freely, but the other way must be done gradually... am I missing something?

I guess this is the opposite problem from the OP!
i don't 'bail-out as such , i REDUCE when a stock is at 'nose-bleed levels ' ( but normally keep more than half the holding ) if i sell out , completely from a stock that is for a completely different reason ( lack of confidence and patience with THAT company )

and NORMALLY i don't 'rebalance ' ( deliberately sell a stock/sector to reinvest elsewhere ) what i normally do is put new cash into the desired area

i am not a US resident so cannot help you with tax suggestions the minefield is different over here .

but break out your trusty calculator maybe BIG moves aren't that bad ( sure you pay more tax , but lock in certain gains )

i like small cautious moves ( normally ) but that is just me

from reading the reports of one local fund manager , they sold 80% of the entire portfolio in February 2020 ( 85% by the end of March 2020 ) and have reinvested since ( now holding 29% cash , but that decreased to less than 10% around December 2020)

BUT this is an aggressive opportunistic fund manager ( not the average long-term holder )

in February/ March 2020 i had accumulated some cash ( without deliberately selling down as the market dropped ) and cherry-picked some attractive prices and proceeded to do so as late as August 2020 .

currently i am calmly accumulating cash once more ( from dividends and take-over cash mostly )

i realize this will annoy those who routinely invest every month , but i have time to watch the markets ( most days )
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Old 05-03-2021, 05:43 AM   #29
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I donít know about others, but any AA rebalancing I do is in an IRA.
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