FOMO

[dobig]

If you were only 10% in equities right now because you listened to all the brilliant talking heads listing the variety of reasons the S&P was going down would you start putting money into the market when we're currently near S&P 4,300?

Currently making around 5% +/- on the other 90% of our money but it feels like right now the market is an engine that refuses to be stopped and only gaining momentum with recent technology developments and unemployment sticking at historical lows. No matter what economic news comes out it seems we can have 5 bad numbers and 1 tiny positive number and market shoots up.

Am I the only one who has been what feels like endlessly patient but now feels like they are getting sucked in by FOMO?

If we started to leg in we'd do equal parts VTI, SCHD and RSP unless someone had a better recommendation.

 

[rodi]

I learned a long time ago that I suck at market timing. I set my asset allocation to mix of equities and fixed income and rebalance periodically. Saves me from FOMO.

 

[FlaGator]

Not sure this is helpful, never been as low as 10% equities. My 60 yr. old. sister has, but she is years from retiring. Why is that?

I don't listen to market gurus, and when I did, I never went all in on their recommendations.

I was at 85% equities while working, dropped down to 60% at ER to mitigate Sequence of Returns Risk (SORR). Have been at 70% since the worst of the SORR passed.

Been a few rough spots, but have a bit more than I started with, and after 8 years of much higher than expected expenses.

You will hear it over and over again - pick an allocation that meets your goals and allows you to sleep at night.

As to moving back in after you settle on an allocation - IMO-If you're 10-15 years from needing it, do it all now. If your window is say, 5-7 years, I would average in. May miss some upside, but SORR is reduced, and with your obvious anxious nature, you'll probably be better off that way.

 

[RetiredAt49]

My asset allocation has always been, currently still is, and will always be 100% equities. Since they started tracking historical data in 1927, every rolling 30 year period has produced solid annualized returns (believe the worst 30 year rolling period was 7.2% annualized) and a 100% stock portfolio has generated better returns than all other asset allocation over long time horizons.

My portfolio is already up over 20% YTD and it’s almost back to where it was prior to the bear market.

 

[Al18]

Why are you gambling with your investments? That’s a suckers game. Do the research and make wise decisions. Don’t buy based on what the market is doing this week or month.

 

[dobig]

Why are you gambling with your investments? That’s a suckers game. Do the research and make wise decisions. Don’t buy based on what the market is doing this week or month.

We have not taken money out of equities. We just built up a large cash position liquidating some real estate holdings including our home last year and have that money in individual bonds, treasuries and high yield savings accounts. We have never held a large position in equities but have been wanting to put our new money to work for the past 6 months. Would like to be 60% index funds.

We are 52 and would like to possibly retire in the next year or 2 but our plan is to not touch our investments for 5 - 15 years unless we buy a home. We should have enough between small pension, note payable and deferred comp to get us by reasonably comfortable until full retirement age.

 

[GhostofTomJoad]

Yes, others have offered my thoughts, already: choose a prudent plan that works in your particular situation. My own example: I'm retired, wife still works. So we can "afford" to be heavier in equities than we otherwise might be. Still reinvesting all profit, except a token annual small chunk I remove from the T-IRA in January, every year.
I'm still down -9% from the all-time high at the end of 2021 and start of 2022. I can live with that. It will come back. I just need a little patience. Because I'm not working, no more additions are being made into the T-IRA. Instead, I've started a regular, taxable brokerage account and I buy single stocks in there. Taxes are not an issue for us.

VTI SCHD and RSP are not bad. The question is: do they serve your specific goals? With my single-stock selections, I insist on a dividend of at least 3%. Don't be too over-concentrated, either. If you're retired early, I'd bet you're dealing with a big chunk of change. I own stock in a regional bank. It's been beat down, though it spiked up by +7% in a day, last Friday. Maybe you'd find a seriously discounted asset to be to your liking, if you're going to dollar-cost-average your way back in?

I own BHB
I'm keeping my eye on: BPRN and FFIC. All three of them are still deeply discounted at the moment.

I never learned how to grow a serious stash in order to use it to buy during Market downturns. The "cash" in my portfolio is held in the mutual funds I own.

Just, whatever you do: don't be trying to "time" the Market. Make well-researched choices and stick with them. Occasionally, you'll buy a stinker. I've done it. Just unload it and eat some crow, and move on and learn from those mistakes. "Break a leg."

 

[Koolau]

Establish your goal of equities. Either go all in or go in over some period - maybe 6 months. No expert so listen to everyone else as YMMV.

 

[Midpack]

Assuming your a long term investor, decide what AA and exact holdings you want, and then invest in equities either all at once or DCA if you prefer. I don’t think equities look all that rosy for the next six months, but I’ve never been a market timer. My AA hasn’t changed much since we reached FI almost 20 years ago.

 

[marko]

Assuming your a long term investor, decide what AA and exact holdings you want, and then invest in equities either all at once or DCA if you prefer. I don’t think equities look all that rosy for the next six months, but I’ve never been a market timer. My AA hasn’t changed much since we reached FI almost 20 years ago.

+1. We live off our dividends (and SS) and get paid the same regardless of market condition. "Over time" is the key.

 

[frayne]

My plan only changes when I rebalance usually once per year it's a 60/40 asset allocation, set and forget.

 

[DrRoy]

Cost average in over the next 6 months.

 

[Koolau]

My plan only changes when I rebalance usually once per year it's a 60/40 asset allocation, set and forget.

I'm even less strict about rebalancing I tend to rebalance when it gets significantly out of whack from my AA.

 

[Taco]

If you were only 10% in equities right now because you listened to all the brilliant talking heads ...

Don't let them fool you - there are no brilliant talking heads.

As others have said, decide what % of equities you are comfortable with and just stick to that.

 

[Car-Guy]

I'm in the "won the game" camp and am very happy with my fixed income returns these days. I'm coming up on my 1 yr anniversary of selling all my equities in my cash and IRA accounts and have really enjoyed not playing the game.

In my 70+ years (~50 years trading) I've learned I'm not a market timer and I don't care for buying and holding equities with all the ups and downs. I like the steady and known return rates of my fixed income holdings. Sure, it's doesn't keep up with inflation but I'm actually pretty close and that is all I need, "at this point". Unless inflation goes into double digits for a decade or more, and fixed income doesn't stay close, I'm set.

So no FOMO here.

 

[Koolau]

Don't let them fool you - there are no brilliant talking heads.

If "brilliant" means good earners, I would guess most of the talking heads are brilliant. And, brilliant doesn't mean you know anything about your subject (which is what I think we see in the talking heads sometimes.)

 

[dobig]

I'm in the "won the game" camp and am very happy with my fixed income returns these days. I'm coming up on my 1 yr anniversary of selling all my equities in my cash and IRA accounts and have really enjoyed not playing the game.

In my 70+ years (~50 years trading) I've learned I'm not a market timer and I don't care for buying and holding equities with all the ups and downs. I like the steady and known return rates of my fixed income holdings. Sure, it's doesn't keep up with inflation but I'm actually pretty close and that is all I need, "at this point". Unless inflation goes into double digits for a decade or more, and fixed income doesn't stay close, I'm set.

So no FOMO here.

You don't miss the butterflies in your stomache during a downturn?


I've been reading your posts on the Golden Period and Treasuries and Bonds threads and you and many others have helped guide me on a good portion of my current fixed income. And you know what? I'm somewhere around 5.35% total yield, sleep well at night and the only way I can lose is if I sell some of my longer duration I've locked in if rates continue going up.


Thank you for the sanity check. No need to be chasing right now especially when our fixed income should break 6 figures later next year.

 

[11522914]

I'm in the "won the game" camp and am very happy with my fixed income returns these days. I'm coming up on my 1 yr anniversary of selling all my equities in my cash and IRA accounts and have really enjoyed not playing the game.

In my 70+ years (~50 years trading) I've learned I'm not a market timer and I don't care for buying and holding equities with all the ups and downs. I like the steady and known return rates of my fixed income holdings. Sure, it's doesn't keep up with inflation but I'm actually pretty close and that is all I need, "at this point". Unless inflation goes into double digits for a decade or more, and fixed income doesn't stay close, I'm set.

So no FOMO here.

+100

Since I retired 4 1/2 years ago my portfolio today being 100% fixed income is providing way more $ than I need. I have won the game.

The only question I have is when should I start collecting Social Security. Just kidding.

 

[target2019]

You have time to move back to more in equities.

As most say, you need an allocation you can stick with.

Let's say your target is 50%, and you have to move 40% (from 10% to 50% overall) of your investments. You can determine what would feel right for you. Me? I'd take 1-2 years to do it. DCA or something. As a model, 2% per month for 20 months.

In a Rollover account I've been doing similar. But the idea that the money fund makes almost 5% with no angst on my part, is kinda like a drug habit.

 

[FREE866]

Really depends on what your goals are. Do you need growth to meet them?
If you do, then heavy equity exposure is what you want. If you can mentally handle the volatility is a big consideration though.

 

[Koolau]

You have time to move back to more in equities.

As most say, you need an allocation you can stick with.

Let's say your target is 50%, and you have to move 40% (from 10% to 50% overall) of your investments. You can determine what would feel right for you. Me? I'd take 1-2 years to do it. DCA or something. As a model, 2% per month for 20 months.

In a Rollover account I've been doing similar. But the idea that the money fund makes almost 5% with no angst on my part, is kinda like a drug habit.

Especially if there is good safety as well as generous yield. Sometimes I wish I could just put everything in such a fund. BUT I know that yield won't last and I know that equities - over the long run, will beat such a good yield. But I do have some of my funds at almost that yield in safe vehicles. YMMV

 

[tenant13]

My asset allocation has always been, currently still is, and will always be 100% equities. Since they started tracking historical data in 1927, every rolling 30 year period has produced solid annualized returns (believe the worst 30 year rolling period was 7.2% annualized) and a 100% stock portfolio has generated better returns than all other asset allocation over long time horizons.

My portfolio is already up over 20% YTD and it’s almost back to where it was prior to the bear market.

Same. Except not "always": I had a two year period when I let Chase advisor to invest some of my portfolio into bonds. Only because Chase gave me 2k for opening an account with them. I've made money on these bonds but sold them as soon as I got rid of the advisor. I don't really understand how bonds work and that's a good enough reason not to buy them. And I enjoy playing with options. I'm back to my pre-pandemic levels.

 

[Koolau]

Same. Except not "always": I had a two year period when I let Chase advisor to invest some of my portfolio into bonds.

3 times, I authorized someone else to "invest" for me. I was too busy and/or too lazy. NEVER did they invest as well as I do now. Makes sense. They get paid whether I do or not. What could possibly go wrong. I vowed "never again."

 

[COcheesehead]

I used a number of tools (FICalc, FireCalc, Fidelity’s retirement planner) to help me determine what was the lowest level of equities I would need to have a 100% chance of my plan outlasting me. Turns out it was 0%. I don’t have to stick a dime in equities. I do, however, have about 25% in today for a hedge.
I would suggest to the OP to see exactly how much you need to make your plan work.
I get about 143% of our needed income from bond ladders. I have no heirs, only charities so that is a minor consideration for me. I sleep well at night and don’t worry about the stock market.

 

[Koolau]

I used a number of tools (FICalc, FireCalc, Fidelity’s retirement planner) to help me determine what was the lowest level of equities I would need to have a 100% chance of my plan outlasting me. Turns out it was 0%. I don’t have to stick a dime in equities. I do, however, have about 25% in today for a hedge.
I would suggest to the OP to see exactly how much you need to make your plan work.
I get about 143% of our needed income from bond ladders. I have no heirs, only charities so that is a minor consideration for me. I sleep well at night and don’t worry about the stock market.

Whatever w*rks for you is good. Congratulations!