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Old 09-09-2022, 02:25 PM   #41
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I am more worried about staying healthy at this age, although I am in great shape for my age, than I am about "glidepaths" or long term return on equities.

Just having "more than enough" to make it long term with a good lifestyle is comforting to us. Plus, we will leave a nice inheritance for the kids as it is. There comes a time when peace of mind is more important than thinking about glidepaths and a portfolio performance.

I'll take 4% long term now as long term may not be that long anymore.

I'm sleeping well and my golf game is pretty good.
Thanks and these are pretty much the bullet points of my life and have been for the last 17 years. Wealth without health is meaningless.
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Old 09-09-2022, 02:37 PM   #42
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S&P 500 is -10% for 1 year. That doesn't make me feel bad.

Going into retirement 2.5 years ago I had gradually set our investments to 50/50 AA. I did that recognizing the worst drawdown on various AA ratios. IOW, I accept what happens and don't make strategy changes.

I realize every one is different. I can only offer what we do as an example. It's just talk.
10% doesn’t sound bad, but when you look at whole numbers and see you are down a value in the high six figure range, you just have to look away. Broaden the time frame is my mantra. Broaden the time frame.
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Old 09-09-2022, 02:48 PM   #43
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One year in the life cycle of an asset means nothing.

For the record the etf TIP is down about 9% ytd
TIPS ETFs have the same issues as bond funds right now - rising rates and no maturity dates. TIPS as individual bonds are always redeemed at par or the accumulated inflation factor, whichever is higher, and do not have the same issue. We only hold individual bonds. Bond ETFs without maturity dates are an entirely different investment than individual bonds.

We've had a high allocation to TIPS for over a decade now and they have worked well for us, especially this year. We have low overhead, a low fixed rate mortgage and our property taxes are capped at 2%, so our personal inflation rate is just not that high. Maybe for someone like you, with a long list of high expenses and it sounds like a higher withdrawal rate, you might need to take more risk with stocks. But I don't get a thrill from stock investing like some here do, and we don't need to take on more risk for higher gains, so TIPS work great for us. YMMV.
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Old 09-09-2022, 02:51 PM   #44
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One year in the life cycle of an asset means nothing.

For the record the etf TIP is down about 9% ytd
Yes, we have to look at longer time spans, on the other hand most people don't feel comfortable with sharp drops.

ETF TIPS funds might have had a hard time this year but my individual TIPS bonds went up. If you can get maybe 1% over inflation on individual TIPS it seems like a safe bet (close to that now). If the funds were buying -2% TIPS when they were at that level, it is no wonder they suffered losses when real rates went up sharply.
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Old 09-09-2022, 03:32 PM   #45
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Your base interest is fixed on individual bonds ..payments have increased over the year on the funds from January .

Over the duration value of the fund they will come out close as the increased interest offset the drop in nav …eventually you are close to the deal you bought in to when you bought or added money
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Old 09-09-2022, 03:57 PM   #46
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Your base interest is fixed on individual bonds ..payments have increased over the year on the funds from January .

Over the duration value of the fund they will come out close as the increased interest offset the drop in nav …eventually you are close to the deal you bought in to when you bought or added money
I'm not following you. M* reports the return on Vanguard Inflation Protected VAIPX as -8.5% YTD. Agrees with your previous comment about ETF's and TIPS.

We are talking about different things as my comments were about this year and how my purchase in 2018 of TIPS at high real rates worked out.

Who knows how this works out over the duration of this fund which is 7 years. If I buy at relatively high real rates that is pretty much guaranteed to pay just that. But they have to buy continuously depending on fund inflows and they bought a lot at low and negative real rates. The fund investor has no control over this. The fund's holding now fully reflect relatively high real rates, well at least positive real rates.
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Old 09-09-2022, 05:23 PM   #47
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There is a fallacy that a bond fund will equal an individual bond over the same duration. What is often left out is expense drag and forced redemption drag at mark to market prices of the fund. Funds have no predetermined par and duration is fluid. A fund and an individual bond are different. Even a ladder and a fund are different, though they appear to be the same.
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Old 09-09-2022, 07:15 PM   #48
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There is a fallacy that a bond fund will equal an individual bond over the same duration. What is often left out is expense drag and forced redemption drag at mark to market prices of the fund. Funds have no predetermined par and duration is fluid. A fund and an individual bond are different. Even a ladder and a fund are different, though they appear to be the same.
In addition to those points, it is also a fallacy that you can only hold either bonds or bond funds, in the "I'm losing money now but I'll catch up in 6 years" examples. Many posters here sold their bond funds earlier in the year and avoided what is now a 12% NAV loss and may not be the end of it, with yields lower than 1 year Treasuries, which have no risk to principal. An investor can always rebuy the bond funds if rates level off or start to decline, and the funds start holding bonds with higher yields. There is no law that says you can't switch back and forth and this Kiplinger's article recommends doing exactly that - https://www.early-retirement.org/for...ml#post2790753.
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Old 09-09-2022, 07:22 PM   #49
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In addition to those points, it is also a fallacy that you can only hold either bonds or bond funds, in the "I'm losing money now but I'll catch up in 6 years" examples. Many posters here sold their bond funds earlier in the year and avoided what is now a 12% NAV loss and may not be the end of it, with yields lower than 1 year Treasuries, which have no risk to principal. An investor can always rebuy the bond funds if rates level off or start to decline, and the funds start holding bonds with higher yields. There is no law that says you can't switch back and forth and this Kiplinger's article recommends doing exactly that - https://www.early-retirement.org/for...ml#post2790753.
I enjoy the pragmatism of a ladder. It works, if executed properly. No loss of capital short of default. An interest rate hedge, some control over costs and worst case, if I need to sell, I get to chose what to liquidate.
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Old 09-13-2022, 07:18 AM   #50
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Yes. The last time I was up rather high - I wanted to be a prudent holder and I held. And now - temporarily I'm worth $300k less.

Over the last week on good days, I've sold 30% of my stocks. If things rebound hard now - oh well I missed some of it.

If things get rough because of random little things like higher rates,Fed tightening, labor shortage, Europe enjoying "going green" thanks to certain energy shortages, China Taiwan, Venezuela, earnings per share coming down, etc...then I'd love to re deploy it.

I won't try to call a bottom. S/P 3750 I'll start buying ....and keep buying in increments if it keeps going lower.

The cash is earning 2% in the bank account till then, and if a rehab flip house gets reasonable I might buy one.

They say I'm losing money with cash. I dunno, I didn't lose $300k with cash - but I did holding stocks at my apex at end of 2021.

Don't want to see my remaining holdings tank.....but if SP goes to 3500-3600...I'd really like to start some nice positions.
I think there's a pretty good chance you will get a buy opportunity soon.
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Old 09-13-2022, 08:27 AM   #51
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S&P 500 is -10% for 1 year. That doesn't make me feel bad.



Going into retirement 2.5 years ago I had gradually set our investments to 50/50 AA. I did that recognizing the worst drawdown on various AA ratios. IOW, I accept what happens and don't make strategy changes.



I realize every one is different. I can only offer what we do as an example. It's just talk.


Same. 50/50. In our case, at 56 and 59, our effort to be as ready for anything as we can be includes being globally-diversified in index funds. Plus we have home equity we could do something with someday, if necessary. And we intend to take SS at age 70. Long term care insurance. And we have a 2.5% speculative investment at the margins. And we still work just a little. Finally, we just take the long view and leave it all alone to cycle.
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Old 09-13-2022, 03:45 PM   #52
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If it makes you feel any better, I sold all my bond funds and put all of that allocation in treasuries. Biggest sell of my life…
I did the same thing except for one defined maturity etf.
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Old 09-13-2022, 05:43 PM   #53
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After today, and the carnage in markets, your sins are forgiven. You are sleeping well tonight. Take the cash and max out your I-bonds at 9.6%. Simple math. Why not T-Bills at 3.5% as well? Good luck, God bless.
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Old 09-15-2022, 06:04 AM   #54
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Thanks and these are pretty much the bullet points of my life and have been for the last 17 years. Wealth without health is meaningless.
“Wealth without health is meaningless”. I hope you don’t mind if I adapt that as my new slogan.
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Old 09-15-2022, 06:05 AM   #55
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Thanks and these are pretty much the bullet points of my life and have been for the last 17 years. Wealth without health is meaningless.
“Wealth without health is meaningless”. I hope you don’t mind if I adapt that as my new slogan.
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Old 09-17-2022, 09:42 AM   #56
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9/17

I've read and reread everyone's replies and I greatly appreciate it - always keep them coming. Again - I sold 30% of my stock holdings meaning. 70% - I'm a sitting duck just like everyone else. I just needed to hedge SOME - as I just can't sit around and tell myself "Hey I harvested tax losses!" and "Hey I dollar cost averaged!" and tell myself it's a good thing. If the baseball tickets I bought for $100 today are $90 tomorrow - I'm sorry - but - that sucks. So selling 30% of paper assets - just trying to salvage a bit. If everything goes up - ok I missed returns on 30% - but i'l get them on 70% - I'm ok with that. Since selling on or slightly before 9/8....I've only used a little of the cash generated:

Goog: Sold it at $110.01. I've bought HALF it back @ 102.00. I didn't wait - they own the internet, and the internet - owns the human race. Have buy orders in for $98.00 and $95

Apple: Sold it at $154.00 Bought HALF back $150. Next buy order is for $145 - fully realize I might miss some big announcement but oh well but that's also why I'm buying it back rather fast.

.SDY: Sold for $125.00 Bought half back @$120.50

HD: Sold for $299.10 Bought half back @ 270.00. Next order is in for $265 and then $260

New position: FDX@ 156 (Half of what I eventually want to hold)

New position: BA@. 145. (Again, half of eventual position)

New Position: FSR @ 8.75 (Speculation. Hoping a model eventually gets sold, and the Chipotle Kids in newsrooms start another round of saying "EV! EV! EV!" and this gets a bump. On that note - I sold NO GM and Ford and VW and Benz for that very same reason.





Many more buys to go but at this point my buy prices are too low.

The above - hardly some genius money making. However - on that money, losses reduced by 2-10% - nothing life changing...but it saved me some money - money, that spends just fine. Also - if its ok to be ok - with 'tax losses' and 'dollar cost averaging' - - well, I feel ok that I might contain or reduce some losses on 30% of my investment capital.

Of course, the carnival barkers on Wall Street shouting "intrinsic value!" "strong buy!" "It's a great company!!" "Great Management!" "Look at these cool green charts!" still got me to ride the elevator down with the remaining 70% of my stocks so I guess I'm team player that way. (Mind you in the humble companies I owned and operated - over-ordering retail merchandize without even THINKING that things might change, OR giving glowing remarks just 2 months ago and then saying the world sucks........... I or my team rarely did that and still we didn't think of ourselves as "Great Management" - we just felt its common sense the average kid running a lemonade stand might know. I wasn't 'great management' with any fancy degree - just someone who had almost 100% of his net worth vested in something I also operated - took personal - and each day I felt I got paid (0r not) what I was worth. Ditto my team.

If it declines more it will be painful to see. But, I'm trying to look on the coming months as a nice buying opportunity that might yield to nice returns over the next 5 years and in the meantime - IBONDS, Treasuries, even CDs flirting with 4%.... looking very interesting to me.
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Old 09-17-2022, 10:23 AM   #57
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Old 09-17-2022, 01:52 PM   #58
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Yes. The last time I was up rather high - I wanted to be a prudent holder and I held. And now - temporarily I'm worth $300k less.

Over the last week on good days, I've sold 30% of my stocks. If things rebound hard now - oh well I missed some of it.

If things get rough because of random little things like higher rates,Fed tightening, labor shortage, Europe enjoying "going green" thanks to certain energy shortages, China Taiwan, Venezuela, earnings per share coming down, etc...then I'd love to re deploy it.

I won't try to call a bottom. S/P 3750

They say I'm losing money with cash. I dunno, I didn't lose $300k with cash - but I did holding stocks at my apex at end of .
Down $300K? Consider yourself lucky. Many of us on here are in far worse shape. But we were up 300% from 2008 prior to this year, so we're still fortunate..
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Old 09-18-2022, 07:04 AM   #59
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Yes. The last time I was up rather high - I wanted to be a prudent holder and I held. And now - temporarily I'm worth $300k less.
Last week there was a huge 1300 point drop. People thought they lost a bunch of money. And they did. Kinda.

Except that in the previous week the market had gone up...you guessed it...about 1300 points. So despite the headlines screaming "Meltdown!", people broke even for the week.

When Black Monday hit in 1987, it was a one-day 22% drop. Looking at that day, it was the end of the world. Look at the month, it wasn't that bad. Stand back and look at the year, and...you guessed it, they again broke even.

So my question for you is...are you really down $300k, or are you breaking even? I'd guess you might even still be ahead..
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Good question
Old 09-18-2022, 07:14 AM   #60
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Good question

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Last week there was a huge 1300 point drop. People thought they lost a bunch of money. And they did. Kinda.

Except that in the previous week the market had gone up...you guessed it...about 1300 points. So despite the headlines screaming "Meltdown!", people broke even for the week.

When Black Monday hit in 1987, it was a one-day 22% drop. Looking at that day, it was the end of the world. Look at the month, it wasn't that bad. Stand back and look at the year, and...you guessed it, they again broke even.

So my question for you is...are you really down $300k, or are you breaking even? I'd guess you might even still be ahead..
I"m down , for real. I was never into paper assets and stocks and 401K stuff until I early retired. So I never rode the elevator up that much. The stock account - down $300k.

And I'm pleased that at least 30% of my stock allocation didn't participate in last week's festivities. If it skyrockets now - oh well I still enjoy it on the other 70%. But - I just don't see the inflation number being handled that quickly. Labor, supply chains - complex problems that will take awhile - and then I feel the new normal will be 4% inflation not 2 like the Fed claims it wants.

Many used to shout platitudes '$15 an hour!!" "businesses exploiting workers!" - - well guess what, now workers are telling businesses to stick their $15 somewhere special...point being, cost of labor will stay somewhat high and with any luck - labor in China, India, Mexico are gonna figure it out also.

Club 401K's life is gonna change a bit.

The shareholder - is gonna start sharing.

Part of me thinks it's hilarious for reasons probably not popular on this forum so I won't go into it.

Part of me wishes it didn't have to happen when I finally got into this game
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