Analysis paralysis - meeting with a FA tomorrow

[Bullwinkle]

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.

Got it, I thought that might be the situation.

Just gotta be patient and move slowly I guess.

 

[disneysteve]

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 aren’t retired yet, or by not reinvesting income if you are retired, but as you note it’s harder to move the needle that way the larger you’re portfolio is.

I’m still employed and we save and invest over 100K/year so redirecting new money can help shift the balance if we want it to.

 

[Oz investor]

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 )

 

[Golden sunsets]

I don’t know about others, but any AA rebalancing I do is in an IRA.

[emoji121]This

 

[Blue531]

Ask to see your financial advisor's financial statement.

 

[FIREarly]

Meeting with a Schwab FA tomorrow to discuss options.

Be careful, my DW let the Schwab person setup her account and paid no attention to it. Over x number of months it made dollars... next to nothing!

You're probably going to pay closer attention to it but Index Funds are ideal. My crazy self says TSLA too but if you are close to retirement it is not a good option. It needs time to multiple... FSD. It just took a huge negative recently so stick to Index Funds.

I'm also starting a Go Fund Me account for my retirement if you want to pitch in. hahaha, no that is not happening but what an idea!

 

[RetireeRobert]

A specific suggestion for you, who like me, is averse to increasing stock allocation at current nose bleed levels. One that can likely garner a better return than straight out cash, but also still be much less volatile or risky than stocks. Vanguard GNMA fund, VFIIX, can likely "somewhat consistently" get you a total return of 3% or more annually. Perhaps over some years even 5%.

 

[gooddog]

Since you are meeting with a Schwab FA, ask about their intelligent portfolio accounts. You can pick from quite a variety of them (U.S./global/income...) and then each type has different levels of risk/reward. Linked below is a URL that will show you the different plans and risk profiles, along with historical returns and other data. Worth a look.


https://content.schwab.com/intelligent-portfolios/historical-performance/

 

[rayvt]

Hate the ideal of putting 1m plus into this market with indexes at all-time highs.

Take a look at a 10 or 20 or 30 or 40 year chart of the market and count how many times it was at an all-time high. Was any of those times a bad time to invest?

 

[FIREarly]

Hate the ideal of putting 1m plus into this market with indexes at all-time highs.

Take a look at a 10 or 20 or 30 or 40 year chart of the market and count how many times it was at an all-time high. Was any of those times a bad time to invest?

+1
Very valuable comment!

 

[indiajust]

You sound like a good candidate for the schwab robo, Intelligent Advisor.

Set your risk level, fund it and forget it. That will get you out of cash and safely into a auto-adjusted asset allocation account. You have enough to set up a Windhaven also, for the riskier bucket. And you can always buy their ETF selections to focus on anything specific.