2018 Strategy

[frayne]

I'm sure we all looked like geniuses in 2017 with our 10,15,20,25% ROIs but do you have any plans for 2018 as to changing things ?

I had to rebalance a number of times in 2017 to maintain a 60/40 (equites/fixed) split and finally just went to a 50/50 in December and I'm going to ride that pony till the cows come home in 2018. Yes, I know mixing metaphors is like killing two birds with a dog that don't hunt.

So what's your plan for 18, if you have any ?

Oh and by the way Merry Christmas to all.

 

[VanWinkle]

I was really bored with my 2017 investments. I intend to be bored again in 2018. I was 50/50 in 2017 and will be 50/50 in 2018. The only other plan I had was to dump it all into Bitcoin, but I lost my nerve.

VW

 

[audreyh1]

Didn’t rebalance in 2017. Waited (fingers crossed) to receive distributions and sure enough they were quite large this year and mostly have rebalanced the portfolio by taking them in cash.

Hope to keep taxable income lower in 2018, but if the large distributions repeat it won’t be that much lower.

Added new funds to the portfolio (from an old legacy investment I finally sold) and plan to stay at 50/50 until CAPE10 drops below 25. Might be years, lol!

 

[Red Badger]

Gonna stay ~60/40ish with 2020 (and beyond) stash. After retiring this year, I built a two year CD ladder with quarterly intervals. So, the only (planned) change for 2018 is cashing in those CDs.

Merry Christmas to all as well.

 

[flyingaway]

Moved from 85/15 to 70/30 in 2017. I plan to move to higher bond allocation if the market keeps going up, appropriately 1% equity to bond if S&P500 rises 1%. So if it rises 10% again in 2018, my allocation will likely be 60/40.

 

[mickeyd]

Same as 2017, 45/45/10. Why mess with perfection?

 

[SheitlQueen]

I am pondering this now. I just received a nice inheritance, but I don't want any income from it for a year and a half until I am off Obamacare. Trying to decide how to handle it. The rest of my investments are staying the same 60/35/5

 

[Senator]

Still planning on dancing with the one that brought me this far.

Mostly US Equity Indexes, dividends reinvested. Plenty of real estate. I will be bumping a few rents.

 

[Lsbcal]

In late November went to 50/50 from 60/40. No plans to change that. If the yield curve flattens to maybe 80 basis points, I might consider going to 40/60. Currently it’s 115bp.

 

[NW-Bound]

Instead of selling outright to reduce my stock AA down from 70%, I have been selling covered-call options. However, being a stock lover that I am, I am greedy and reluctant to see them go, so have been selling at strike prices fairly high out-of-the-money.

I will take a less optimistic stance, and write options closer to the money to be sure my stock AA will get reduced. And then, as my cash level is raised, I will do cash-covered puts at below market to force myself to buy low if the market drops.

 

[Montecfo]

Staying the course at 70/30. Continuing shift into international and emerging markets on equity side. Sticking with st and intermediate bond funds on debt side, plus cash.

 

[Danmar]

Will simply keep selling stock to fund higher spending if the market does not crash. Maybe 1.5% of portfolio. This will take WR to about 5%.

 

[flintnational]

We rebalanced three times in 2017. The last time, in December, we moved from 70/30 to 65/35. No plans to change the allocation in the future. The 35% is in cash and VBIRX. In 2018 will look to increase the yield with CD ladders or other short bond options. But, I am not looking for any long bond exposure at this point.

 

[DrRoy]

I rebalanced and (permanently) reduced my equity AA from 62 to 60. If the market keeps rising, I will drop another point or two next year.

 

[mathjak107]

reduced equities after this big run up from 50 to 40% . i am not comfortable at these levels . more so the amount of leverage out there because of low volatility , not so much because of p/e's.

all these trading programs that use leverage have increased leverage drastically . but any increase in volatility and the loss potential kick up or dip will have these machines deleveraging so as to get loss potential back in line .

once something triggers selling it will cause more selling and it won't be pretty . so i am out of my comfort range as of last week .

reduced holdings in a total bond fund and added the money to both very very short term bond funds and to my go anywhere bond fund .that move made the portfolio much less interest rate sensitive . with more increases coming i felt reducing sensitivity while still maintaining a good allocation to all kinds of bonds was a good idea .

it holds some high yield ,international , emerging market as well as high quality corporate's .


credit risk is not much of an issue at all now . i still hold some total bond fund but it has been cut in half going forward .

 

[DEC-1982]

When I retired my portfolio allocation was at 65/35. My plan at the time was to drop the equity part of the allocation by 1% a year and also re-balance (both at the beginning of the year). I intend stick to that plan. 62/38 in 2018.

The drop in early 2016 and the rise in 2017 has not caused huge drifts for my allocation, and they have not made me do anything in the middle of the year. There was a post some time ago by Audrey which sticks in my mind, something about changing allocation in the middle of 2008 and a reference to catching a falling knife.

 

[joeea]

So what's your plan for 18, if you have any?

My plan is to leave my 2017 plan unchanged for now. Recent years have been good to us financially. We haven't had to change much.

I'm retired while my wife continues to work. She currently enjoys her job and wants to continue to work for a few more years. We are both good with that.

We'll continue to max out her 401k. That allows us to get ACA subsidies and have very affordable health care from the marketplace (since her employer doesn't offer health insurance).

We'll continue with our current 60-40 asset allocation for the year and continue to draw from our cash savings as needed.

After 2018, we may need to change things up. Depending on what the Administration and Congress do to the ACA, we may need to spend more on healthcare. And in a few years, we'll be Medicare-eligible - that will change things up a bit.

And once my wife decides she is done with the working life, we will re-calibrate our budgeted expenses, review our asset allocation, and adjust things as needed.

The biggest unknown at this point is my health. I'm currently undergoing infusion treatments for cancer. But I only have 4 more weeks to go with that. And the expectation is that I'll be fine once treatments end. If an unexpected prognosis appears, we may need to rethink our plan to wait until 70 to start Social Security benefits and our plan to retire to our current vacation home in 3-4 years.

All told, we've been planning for the long haul for a long time. Fortunately, we are well-positioned for pretty much whatever comes our way. The future's so bright we have to wear shades!

 

[camfused]

With almost exactly one year to go before my FIRE date, and the bull market so old now, I am going to 0/93/7 at the first of the year (after the Santa Clause rally). I am just plain chicken now. I'll get back to "normal" at the end of next year.

 

[Lsbcal]

reduced equities after this big run up from 50 to 40% . i am not comfortable at these levels . more so the amount of leverage out there because of low volatility , not so much because of p/e's.

all these trading programs that use leverage have increased leverage drastically . but any increase in volatility and the loss potential kick up or dip will have these machines deleveraging so as to get loss potential back in line ....

Any source data on the amount of leverage?

 

[joeea]

With almost exactly one year to go before my FIRE date, and the bull market so old now, I am going to 0/93/7 at the first of the year (after the Santa Clause rally). I am just plain chicken now. I'll get back to "normal" at the end of next year.

Going to zero%

What are you expecting to happen in 2018? What leads you to that conclusion?
And what leads you to believe that whatever it is, it will be over at the end of the year?

 

[woodguy00]

65/35 more or less after nice run up. No need to change. Just keep dumping in money and hoping the market doesn’t correct.

 

[REWahoo]

With almost exactly one year to go before my FIRE date, and the bull market so old now, I am going to 0/93/7 at the first of the year (after the Santa Clause rally). I am just plain chicken now. I'll get back to "normal" at the end of next year.

There was a time when I would make a futile effort to convince folks who post something like this that their "gut feeling" investment moves were almost always bad decisions. Thankfully I'm past that now...

 

[Senator]

With almost exactly one year to go before my FIRE date, and the bull market so old now, I am going to 0/93/7 at the first of the year (after the Santa Clause rally). I am just plain chicken now. I'll get back to "normal" at the end of next year.

What will you do if the market goes up another 20%? Or it it falls 20% and appears to be still falling?

Stay sitting? Or get back in at higher/lower levels?

How do you know when it is time to get back in?

 

[BGold]

Having retired in July 2017 and following my wife into retirement, Instead of rebalancing equity position from 38% to 35%, my DW and I will RMD from equities (Vanguard Dividend Apprec. Index). I had and have been concerned about sequence of returns so my equity position going into retirement was 30% (34% if you count 1/2 of our TIAA Real Estate account as equity.

 

[Scuba]

With almost exactly one year to go before my FIRE date, and the bull market so old now, I am going to 0/93/7 at the first of the year (after the Santa Clause rally). I am just plain chicken now. I'll get back to "normal" at the end of next year.

I recall from your other thread that you think FA’s are a waste of money. If you really intend to make these drastic AA changes based on a belief that you can time the market, you are a prime candidate who would benefit greatly from professional money management. Over time, far more money has been lost trying to time the market than in the market during crashes.

Good luck.