DOW heading 20K !

[audreyh1]

Quote:

Originally Posted by Chuckanut The contrarian in me is screaming " Look out. Get your 2017 spending cash out NOW!". But, the ongoing war on savers low interest rate policy, tells me that this may continue though with some corrections here and there.

I think that interest rate policy is a changing. Inflation has normalized back to Fed targets, GDP is up, the Fed has made it clear that their rate will rise next week, the markets will probably anticipate more tightening next year which will cause other rates to rise.

[Another Reader]

Quote:

Originally Posted by calmloki Anecdotal and a tiny sample size, but we have loans out on two places - a new construction upper end home and a midrange flip. Both of them had not sold with the alacrity expected, though the midrange place is now due to close 1/4/2017. Feels like we hit a real estate slowdown in advance of a potential interest rise. We had a buy order in for VOO at 15% off its prior year high - looks like that will expire unfilled.

Mortgage rates are up sharply in the last 60 days. Big banks are all over 4 percent on 30 year fixed mortgages, with most circling near 4.25 percent. The chilling effect is already being felt in the housing market.

[Breedlove]

I have not a lot 140,000 sitting on the sidelines waiting for mid February . Gut feeling says we will see a correction then .

[audreyh1]

I just hope for a chance to pull my annual withdrawal out in early Jan with some rebalancing, that even after this month's distributions are paid probably means trimming some equities at these prices.

The annual withdrawal will already be covered with distributions paid to cash. Estimated distributions looks like should do it.

Knock on wood!!!

[ripper1]

Usually make my distributions monthly. I wonder if this year I should pull it all out in January since we are at an all time high. Buy low...sell high....right?

[REWahoo]

What makes you so sure it will still be "high" come January?

[audreyh1]

Quote:

Originally Posted by REWahoo What makes you so sure it will still be "high" come January?

That's why I am keeping my fingers crossed!!!

[ziggy29]

One has to wonder, IMO, how much longer large cap US stocks can keep leading the entire market. Almost time to do some redistribution, and yet again it's time to trim large cap domestic while purchasing other equity classes.

Frankly this reminds me of the run-up before the bear market of 2000-01. Large cap domestic was destroying all other equity asset classes for a long time during that raging bull.... and after the end of said Ursa Major and the recovery began in 2002, small caps, emerging markets and (for a while) REITs caught fire.

[ripper1]

Quote:

Originally Posted by REWahoo What makes you so sure it will still be "high" come January?

Right.

[braumeister]

Quote:

Originally Posted by audreyh1 I am keeping my fingers crossed!!!

A less sophisticated financial strategy, I suppose, but at least as good as most.

[NW-Bound]

Quote:

Originally Posted by audreyh1 That's why I am keeping my fingers crossed!!!

Instead of keeping your index finger poised over the "sell" button?

[frayne]

I pulled the trigger and rebalanced this morning.

[explanade]

Do you rebalance into bonds?

Interest rates are expected to go up further after going up already.

[W2R]

Quote:

Originally Posted by frayne I pulled the trigger and rebalanced this morning.

Not me. I am not far enough from my target equity allocation of 45%. Today it is at 45.75%, but my written financial plan says it would have to be 47.5% for me to rebalance.

BUT, I always rebalance during the first week in January, after I withdraw my year's spending money. So, it won't be long.

[audreyh1]

Quote:

Originally Posted by NW-Bound Instead of keeping your index finger poised over the "sell" button?

Selling has tax consequences. I'd rather defer those taxes until next year.

[ziggy29]

Quote:

Originally Posted by audreyh1 Selling has tax consequences. I'd rather defer those taxes until next year.

That said, depending on circumstances those same tax consequences can convince you to sell now! Last week I did a preliminary estimate of our taxes for this year. It turned out that we would have been comfortably in the 15% tax bracket, with over $30,000 to spare. I thought it would be a good idea to see if I could use up most of that tax bracket this year.

I considered Roth conversions to use it. Now we don't have to worry about ACA subsidies so that didn't discourage us. And living in a state with no income tax and being in a low tax bracket, Roth conversions could be a great idea... except that I don't expect to be in a massively higher tax bracket in the future.

So I looked at our taxable brokerage accounts. We had about $19K in LTCG which would have *zero* taxes on them; even when that income is added to our taxable income we are still in the 15% marginal bracket which means no taxes on dividends or LTCG. So I sold all of those holdings and immediately repurchased the same number of shares. It didn't put more money in our pocket but it essentially gave us a "free" stepped up cost basis, reducing the potential future taxable gain in the future.

For us, selling was the right thing to do **because** of tax consequences.

[foxfirev5]

This is a great time to have sufficient funds in after tax, deferred and Roths. It gives the flexibility to plan and execute given current market conditions. Personally I've sold what I needed and am set for the foreseeable future. No need to be greedy, since I'm under the impression I've won the game.
We'll see what happens next year.

[foxfirev5]

Quote:

Originally Posted by ziggy29 One has to wonder, IMO, how much longer large cap US stocks can keep leading the entire market. Almost time to do some redistribution, and yet again it's time to trim large cap domestic while purchasing other equity classes. Frankly this reminds me of the run-up before the bear market of 2000-01. Large cap domestic was destroying all other equity asset classes for a long time during that raging bull.... and after the end of said Ursa Major and the recovery began in 2002, small caps, emerging markets and (for a while) REITs caught fire.

FWIW the Russell 2000 has been on quite a run lately. Mid and small caps. but I'm surely not qualified to imply any meaning. Just because I sold some may be a contrarian indicator. Whatever that means.

[explanade]

So are you guys reducing equity percentages by selling equity investments and buying fixed-income or bond investments to rebalance?

[ejman]

Getting closer but still a ways to go. At 53.1% (the equities band limits I set is 10% - 45% to 55%) But it sure is tempting to re balance early but I must resist....