No bonds 100% stocks???

[wanaberetiree]

I see my bonds positions about 9% down this year and wonder if it’s smart to break AA rules for 60+ yo person and move all-in to stocks say QQQ and S&P 500

Any ideas?

Thx

 

[audreyh1]

What are your stock positions down YTD?

My large cap stock position is down 19% YTD compared to my intermediate bond position being down 9%.

It’s up to you and the volatility you can live with. If you don’t need the money for annual expenses, then you can do whatever you like.

 

[wanaberetiree]

What are your stock positions down YTD?

My stock positions are down 19% compared to my intermediate bond position being doom 9%.

Same here

 

[Dash man]

I see my bonds positions about 9% down this year and wonder if it’s smart to break AA rules for 60+ yo person and move all-in to stocks say QQQ and S&P 500



Any ideas?



Thx

QQQ and an S&P500 ETF will be very heavy in tech stocks. You’d better check the overlap between the two. A broad market ETF like SCHB, SCHD or VTI would give you more diversification in your portfolio.

 

[wanaberetiree]

QQQ and an S&P500 ETF will be very heavy in tech stocks. You’d better check the overlap between the two. A broad market ETF like SCHB, SCHD or VTI would give you more diversification in your portfolio.

Ok I agree

Let’s say VTI and 0 bonds

 

[RetiredAt49]

We are 100% in stocks… and will stay there until we croak.

 

[wanaberetiree]

We are 100% in stocks… and will stay there until we croak.

If you don’t mind me asking - how old are you?

 

[RetiredAt49]

If you don’t mind me asking - how old are you?

50 and my DW is 52

 

[CyclingInvestor]

We are 100% in stocks… and will stay there until we croak.

Same here, 63yo, retired 15 years

 

[NW-Bound]

The OP did not say his current AA.

I am 75% in stock as we speak. The rest mostly in cash.

Being a tactical AA practitioner, I reserve the right to vary my AA as I see fit. At some point, I will raise my AA even higher. Maybe to 85%. I have never been 100% in stock. I can't. Have quite a bit in I bonds, and I don't think I ever want to sell them. They are my funds of last resort.

Have not seen much blood in the street, compared to 2000 and 2008. It's still early in the game.

And if the market somehow miraculously recovers from here and sets new high, I will do plenty well with 75% stock. No need to throw more cash into the bonfire as yet.

 

[arcyallen]

I see my bonds positions about 9% down this year and wonder if it’s smart to break AA rules for 60+ yo person and move all-in to stocks say QQQ and S&P 500

Any ideas?

Thx

I'd say set a well thought out plan, and then stick to it. Period. If you need less volatility in order to sleep at night or to smooth out your returns because you're taking income, keep some bonds. If not, maybe 100% equities is right for you. But I can't stress enough: Figure out a plan you can stick with, and then stick with it!

A side note on QQQ: look at the last 22 years and make sure you're good with that as a long term investment if it's part of your plan.

 

[LakeRat1]

I sold all my bond funds last week...... which was 40% of the portfolio ....... I am 60, been retired 8 years now..... I am thinking of breaking all the rules and invest for the short term in Pipeline Stocks ...... My entire portfolio is in a tax-derrered 401k rollover to an IRA with Fidelity ......

 

[VanWinkle]

I think if you are ready to change now because your bonds are down 9%, you will likely be ready to change when 100% of you equities are down 20-30% as they are now. If you want more risk, dial it up slowly and see what your emotions can handle before you just go "all in". Good luck to you,

VW

 

[tulak]

I like having some cash around to buy stocks when they go down. It’s not really cash though, since it’s in a stable value fund.

I don’t maintain a stock/fixed income percentage. I keep enough cash/fixed income to last a few years and everything else is in stocks. That has led to a larger percentage in equities as the portfolio grows. I’d never go a 100% in equities.

Well, maybe I would if I could live off of the dividend yield, which is a ~1.3% withdrawal rate. That seems unlikely though, so I’ll stick with my cash and equivalents buffer.

 

[Dash man]

The money we have in stable value, savings, short-term treasuries and MYGA are there for a reason. We have plenty in stocks, and don’t want to risk the safe money we can live off of while the stock markets are down. Greed is what can hurt you.

 

[copyright1997reloaded]

I see my bonds positions about 9% down this year and wonder if it’s smart to break AA rules for 60+ yo person and move all-in to stocks say QQQ and S&P 500

Any ideas?

Thx

I sold all my bond funds last week...... which was 40% of the portfolio ....... I am 60, been retired 8 years now..... I am thinking of breaking all the rules and invest for the short term in Pipeline Stocks ...... My entire portfolio is in a tax-derrered 401k rollover to an IRA with Fidelity ......

If you are 60+ your #1 investing theme should be preservation of capital. You do not have another 40 years to accumulate if you lose it all. I've given the following opinion here on ER.org before: I don't understand why people think it is an all-or-none investment decision. By that I mean, you don't have to "break all the rules" - you could take a little bit of your portfolio to break the rules.

If you think rates will continue to rise, lessen your bond duration. However, the past is the past, the 9% damage is already done. So the question becomes whether bonds will continue to fall due to rising rates. (Note: Just this morning I see that the odds of fed hiking (e.g. 3rd rate hike) are starting to slip because of the faltering economy.) If you think stocks are cheap, nibble on some but make sector specific bets fairly small.

Disclaimer: I am about 50% equities, 43% bonds, 7% commodities/PM's. My 43% bonds is almost all short duration or inflation-adjusted.

If I think the bottom is in, I will go hog wild and put a few % more into equities.

Let me beat on this a bit more: Let's say you are a Blackjack player who counts cards. Now, you are playing, and the deck is really positive. So do you go all in, i.e. play all of your chips? After all, your odds of winning have increased substantially. NO. Why not? Because even though your odds have improved.

None of us know what is going to happen with absolute knowledge in the future. So my philosophy has always been to make sure I can do what I can to be able to be there the next day if I'm wrong on my thesis or assumptions.

 

[wanaberetiree]

I sold all my bond funds last week...... which was 40% of the portfolio ....... I am 60, been retired 8 years now..... I am thinking of breaking all the rules and invest for the short term in Pipeline Stocks ...... My entire portfolio is in a tax-derrered 401k rollover to an IRA with Fidelity ......

Why in Pipeline Stocks?

 

[LakeRat1]

Why in Pipeline Stocks?

I am thinking, a quick way to make up the 8% Drop in the bond funds, plus they pay a pretty good dividend

 

[daylatedollarshort]

If you think rates will continue to rise, lessen your bond duration. However, the past is the past, the 9% damage is already done. So the question becomes whether bonds will continue to fall due to rising rates. (Note: Just this morning I see that the odds of fed hiking (e.g. 3rd rate hike) are starting to slip because of the faltering economy.)

Here is a good article on the impacts of the rate increases so far - Stock Market Outlook: a 'Fed Pause' Will End the Bear Market in Stocks (businessinsider.com)

"The ongoing tightening cycle, which is expected to include at least two more 50-basis-point rate hikes over this summer, is likely the biggest headwind for stocks as they try to rally from their current bear market depths. The NASDAQ 100 is down about 30% year-to-date, while the S&P 500 is down nearly 20% over the same time period.

But for the Fed to slow down or pause its quantitative tightening cycle, it would need to see three main criteria, according to Stifel: lower gas prices, lower inflation, and lower GDP growth. In other words, bad news may be good news for investors and the stock market. Stifel expects some of those factors to materialize in the fourth quarter of this year, which could set stocks up for a rally into year-end."

 

[wanaberetiree]

Here is a good article on the impacts of the rate increases so far - Stock Market Outlook: a 'Fed Pause' Will End the Bear Market in Stocks (businessinsider.com)

"The ongoing tightening cycle, which is expected to include at least two more 50-basis-point rate hikes over this summer, is likely the biggest headwind for stocks as they try to rally from their current. The NASDAQ 100 is down about 30% year-to-date, while the S&P 500 is down nearly 20% over the same time period.

But for the Fed to slow down or pause its quantitative tightening cycle, it would need to see three main criteria, according to Stifel: lower gas prices, lower inflation, and lower GDP growth. In other words, bad news may be good news for investors and the stock market. Stifel expects some of those factors to materialize in the fourth quarter of this year, which could set stocks up for a rally into year-end."

If 50 basis points pushed bonds ~9% and stocks 20% I wonder what 100 points will do.

Thx for the article.

 

[daylatedollarshort]

If 50 basis points pushed bonds ~9% and stocks 20% I wonder what 100 points will do.

Thx for the article.

I'm not sure we have to wonder too much. The Fed members said early in the year they had 6 - 7 rate increases penciled in. Unless things change, 6 50 point increases would mean 300 points for the year.

 

[dmpi]

I use to be 100% in stocks.... until 2008 housing bubble hit. Then I realized 1) my tolerance for risk wasn't as high as I thought it was and 2) Your mental health can affect your physical health. I was lucky to learn that lesson in my mid 40s rather than in my 60s.

 

[wanaberetiree]

I'm not sure we have to wonder too much. The Fed members said early in the year they had 6 - 7 rate increases penciled in. Unless things change, 6 50 point increases would mean 300 points for the year.

Even better

 

[harllee]

In 2008 I had about 80% stocks and 20% bonds, very little cash. The 2008 Great Recession was a terrible time for me, I could not sleep at night. I did not want to sell stocks at a huge loss so I had to cut way back one my spending. I held on and did not sell but I learned that I cannot tolerate a 80% in the stock market. After my stocks recovered I sold a chunk of stock and now have about 50% stocks, 20% bonds and 30% cash (primarily CDs). I do not even checking the markets now, I sleep much better.

IMO everyone needs to consider their risk tolerance and needs and come up with a plan they can live with without panicking. For me anyway I definitely could not tolerate 100% stocks.

 

[copyright1997reloaded]

I'm not sure we have to wonder too much. The Fed members said early in the year they had 6 - 7 rate increases penciled in. Unless things change, 6 50 point increases would mean 300 points for the year.

Here's a prediction that I've already made (on ER.org) but I will repeat: The Fed will pivot by the end of the year. (As time goes on, I am inclined to think it might even be sooner.) Why? Because economic conditions are deteriorating quickly. Even though they have a dual mandate, there will be intense pressure on them when it becomes obvious (even to the dense) that we are in a recession. They will declare victory as inflation "moderates", and everyone will celebrate only to eventually see inflation kick higher.

That's why I am now up to 6.5% of my assets in PM's/commodities. Could I be wrong? Sure, that's why the % isn't 50% or 100%.