Do you have a strategy for 2025?

I took a number of large gains January 3rd knowing that the market was going to gyrate sometime this year. I had to wait until 2025 to take those gains since we’ve been doing large Roth conversions for the last few years. Sadly, I didn’t sell more, but now, there’s cash sitting in a MM waiting to channel my inner Warren.

Now, no Roth conversions until the end of the year unless there’s a significant drop making a conversion more advantageous and watching the market do its thing.
 
Sojourner said:
No crystal balls here, but I personally don't see all this market turbulence being "over" anytime soon. IMHO, the markets are tanking due to fear and uncertainty, kind of like how a fat, content house cat would react if a crazed dog with rabies moved in suddenly. I don't see how that dynamic changes (substantially) for the better anytime this year.
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Good analogy. I agree. We have some income insecurity among extended family as well. I doubled cash reserves a few weeks ago so we plan to ride it out.
 
In late 2024 after reading peoples' opinions here about it being a good time to cash out while ahead, I took advantage of the high valuations and adjusted into a more conservative AA, which I needed to do anyway because of my age.

Then the past couple months since I felt like bad things were highly likely to occur (tho I thought bad inflation was most likely this year, followed by recession next year -- in the S&P500 prediction thread I'd guessed a 15% increase this year), I changed my plan from straight Cap Gain harvesting to using those sales to buy investments that are safer for various types of bad markets (more "all weather").

And last month I added a strategy for funding a third year partially from my taxable account (i.e., some 'defensive' positions). I did that because although I have enough bonds to carry me for some time, they are in tax deferred accounts and would cause my taxes to double or triple (compared to my current balance of approx half my spending coming from selling equity positions).

I also bought i-bonds in December and January, which I hadn't planned to do, but when the inflation-clouds started appearing on the horizon I changed my mind.

For the rest of 2025 I'm not sure yet. I had expected the market to go up and I was going to sell some positions later in the year, but if the market turns out to be quite far down I suppose I might do a tiny rollover to a Roth. Or if the market were to go down extremely I might buy the dip, but maybe not since I would not be at all surprised if we have multiple down years followed by sideways motion most of the rest of my life.
 
I have investments in my retirement portfolio split such that growth (stock) funds are in Roth, fixed income (bond) funds are in traditional.

It’s interesting to see how things go out of balance in the current volatile environment. I’ll withdraw according to schedule late in the year and haven’t a clue where things might be then.
 
I'm fortunate to have excess retirement income most months which I invest into stock index funds in my taxable account.
So I have several lots bought in the past six months showing losses now, meaning a TLH opportunity.

I was thinking about TLHing today, but things turned upward mid afternoon, so no go.
I highly suspect that markets will decline further in days to come and I will TLH then, into a completely new ETF.

If markets decline even further after that, I will TLH a second time, and so forth. I just used all remaining tax loss carry forward on my 2024 return, so now's the time to make hay...
 
Certainly no selling here, but might employ some dry powder if we hit bear market status.
 
I can't say that my strategy has changed much since I retired.

Stay somewhat diversified, keep emergency funds and dry powder, keep my eyes open for when something I want falls into the range that I am willing to pay, buy a little, and if there is a bigger "sale" and I want more, buy more in steps and stages. I will never time the bottom, but the investment strategy is long term.

And - be patient- and don't beat myself up over my choices.
 
I still have a few years to retirement (or...a few more than a few, depending on how this all shakes out) so I'm continuing to build my cash reserve at 3-4 years of total expenses (80% complete with current savings rate having that in place by mid-year). I rebalanced my portfolio in November last year to a 60% equities / 30% bonds / 10% cash for just in case/dry powder scenario. I have a VA pension that covers ~80% of my current living expenses which facilitates my increased savings rate, but with the current austerity measures being implemented I'm no longer sure that I can rely on that to be there by the time I would have to utilize it as a form of retirement income.

Like so many others, pretty much a "wait and see" approach for the short-term. I'm hopeful to keep my job for another 4-5 years and maximize my savings from now until then.
 
Looking for a low to fund my Roth i401(k) for the year and maybe do a Roth conversion. I expected a correction all last year. We've been overdue for a routine market correction ever since the "recession that wasn't" in 2022 (~25% market decline from peak to trough).

Seriously, the S&P 500 is still up ~55% (plus divs) from the 2022 low and people are acting like they are about to eat dog food:confused:
 
StillFiguringItOut said:
I took a number of large gains January 3rd knowing that the market was going to gyrate sometime this year. I had to wait until 2025 to take those gains since we’ve been doing large Roth conversions for the last few years. Sadly, I didn’t sell more, but now, there’s cash sitting in a MM waiting to channel my inner Warren.

Now, no Roth conversions until the end of the year unless there’s a significant drop making a conversion more advantageous and watching the market do its thing.
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I've bolded a couple things in this post that everyone should read and comprehend. The market has many people who had a great 2024 which at the beginning of 2024 few would have predicted. There were a lot of people waiting until 2025 to harvest those capital gains. Heck, I did a collar on some of my Apple because I wanted to sell some but not have 2024 capital gains.

It is not surprising, regardless of political and other social-economic aspects, that there be some serious asset allocation changes and people cashing in on big gains - especially for things like the Mag 7 and AI winners. My opinion - they were overpriced. Whether they are overpriced now is a separate question. So we now have a different outlook and perspective - but it is always this way when things finally roll over after a long run up. That is, there is always "something" that is focused on that is part of the narrative change.

I still remember a friend who decided in the early 90's that it was time to get out of the market (went huge into Gold). I too was pretty conservatively invested in 1992/1993 but decided I WAS WRONG so I changed my 401k contributions to be 100% equities (for new money which was coming in every month) and shifted some stuff from bond funds to equities. Wow did that make a difference as 1995-2000 rolled around.

Do I know what will come in the future? No way. But I think it is usually better to sit back and let things play out, keep a reasonable for your age asset allocation, and have enough set aside to let you sleep comfortably at night. I can tell you that even with the recent few weeks, I've slept like a baby at night. (And no, not a baby that is up crying every couple hours....but I usually do have to get up and visit the bathroom once during the night.)
 
USGrant1962 said:
Looking for a low to fund my Roth i401(k) for the year and maybe do a Roth conversion. I expected a correction all last year. We've been overdue for a routine market correction ever since the "recession that wasn't" in 2022 (~25% market decline from peak to trough).

Seriously, the S&P 500 is still up ~55% (plus divs) from the 2022 low and people are acting like they are about to eat dog food:confused:
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Anchoring, yes...
 
USGrant1962 said:
Seriously, the S&P 500 is still up ~55% (plus divs) from the 2022 low and people are acting like they are about to eat dog food:confused:
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And know that I probably can’t do any meaningful tax loss harvesting unless we return to those levels. So nothing for me to do here.
 
audreyh1 said:
And know that I probably can’t do any meaningful tax loss harvesting unless we return to those levels. So nothing for me to do here.
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Maybe fix another frosty beverage and remember that you are retired and you're doing what you are supposed to do - enjoying life. :flowers:
 
Just did my Roth conversion for 2025. Of course no one can time the market, but I think it’s reasonable to think this correction will run its course after the dust settles. Even if it doesn’t, the conversion is worthwhile to help reduce RMD’s in a couple of years.
 
Question - When things settle down, should we get our house insurances reassessed if lumber and other replacement materials rise substantially in price?
 
Koolau said:
Sounds very reasonable. Thanks for sharing. I mentioned PMs because of negative correlation, but definitely not for everyone. Much more cumbersome to trade physical metals than stocks/bonds/TIPS, etc.
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I missed the GLD train, too late to hop in. People who have PM must be really happy at this moment of the market.
 
CalBird said:
I missed the GLD train, too late to hop in. People who have PM must be really happy at this moment of the market.
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I'm at about 9.2% PM + PM Miners. While its been a very bad week ($ wise) due to Apple being absolutely hammered, having the PM's (as well as a healthy amount of fixed) as a hedge has helped a little.

As I've stated in other threads, I don't think it is too late to buy GLD and associated. Gold/Silver usually have multiple years of doing nothing/slowly declining, followed by several years of running higher. (Yes, I am obviously talking my book here but have not sold a single share/ounce for quite a while.)
 
Koolau said:
Maybe fix another frosty beverage and remember that you are retired and you're doing what you are supposed to do - enjoying life. :flowers:
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Absolutely! I arranged things early on so that I can ignore the portfolio 11 out of 12 months of the year!
 
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