+1 I've been 50/50 since retirement 20 years ago at age 52 (+-5% rebalance bands, rarely exercised) and the sleep well at night pretty much thru any newspaper headlines is priceless. Sure, over the last 10 years return would have been higher with more stocks but so what? I've got more than enough with the 50/50 to live the life I want lacking nothing of any significance to me.
Has anyone reduced their stock exposure this year?
- Thread starter Time2
- Start date
We feel the same way. Personal Capital says that we're currently 99% VTI and 1% cash.
My spouse started her Reserve pension last November (right on schedule), so we're not even buying. We're ramping up our gifting & philanthropy.
I chose my AA in the first place using lots of sources of insight, my own philosophy as it developed over time, and also historical data. And all of that did include considering various geopolitical events that have happened along the way. And unless I personally happened to have lived in the wrong country at the wrong time, everything turned out all right. No way to know if the future will look like the past, but I'm still betting things will turn out fine for me and mine.
cheers
Big-papa
cheers
Big-papa
Koolau
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
It occurs to me that Mr. Market is doing a fine job of reducing my stock exposure - at least on a dollar basis. I had been considering rebalancing my port. but it looks like the market is doing that for me.
YMMV
YMMVbada bing
Full time employment: Posting here.
I haven't sold any equities or changed equity positions in the last 2 years. I had a proportionally fairly large cash infusion 18 months ago at retirement that I put in "cash" rather than rebalance in equities. I'm down to about 50/50 overall from a target allocation of 60/40. I'd like to get my rebalancing done, but I'm still waiting (dirty market timing). If/when S&P500 goes below 4000 I'll write some puts looking to get assigned more SPY. I'm hoping to get 3-4 round lots of SPY at a cost basis of 380 after premium. We'll see.
It will be interesting to see if the return on "cash" can ever match inflation again. That simple metric is a big supporter of the stock market. During previous inflation back in the early 80's, at least a flight to safety in bonds could get you somewhere close to protected from inflation. I don't see the Fed having anywhere near that latitude now.
It will be interesting to see if the return on "cash" can ever match inflation again. That simple metric is a big supporter of the stock market. During previous inflation back in the early 80's, at least a flight to safety in bonds could get you somewhere close to protected from inflation. I don't see the Fed having anywhere near that latitude now.
Last edited:
Koolau
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Maybe it's just me and I'm far from an expert (but I saw the last movie) it doesn't seem the fed is all that interested. They've finally spoken up, "crashing" the markets in the process, but haven't done much IMHO. Again, I don't know or understand the fed's role well enough to criticize, but this appears to be a different movie - not a remake, but then again YMMV.
Out of Steam
Thinks s/he gets paid by the post
- Joined
- Mar 14, 2017
- Messages
- 1,674
I have had a very low stock allocation for the past 18 months, conservative even by my cautious standards. I raised it slightly and transferred a small fixed income allocation to stocks today.
I reduced in December. But it was more of a decision to string out my capital gains and simplify my portfolio. I have recently purchased some I Bonds and I may consider some real estate partnership but will probably invest more in the market.
JohnRM
Recycles dryer sheets
I don't get the reasoning.
Why is the stock market so concerned with what is going on with Russia? Setting the humanitarian sorrows aside, how does that impact our economy? I am much more concerned about inflation.
I am not selling, did buy some bonds today, but mostly wait and watch mode.
Why is the stock market so concerned with what is going on with Russia? Setting the humanitarian sorrows aside, how does that impact our economy? I am much more concerned about inflation.
I am not selling, did buy some bonds today, but mostly wait and watch mode.
steelyman
Moderator Emeritus
It might be that people spend too much time watching pundits, especially financial, on TV.
lawman
Thinks s/he gets paid by the post
I've been feeling uncomfortable recently with Russia and Ukraine, If that starts, I suspect the oil pipeline may be compromised and I'm concerned China will take advantage of that and go into Taiwan. Also, I'm sure the administration will be increasing interest rates, that will slow at least the housing splurge and in the end I think stock prices.
We are retired and have a large cushion, I had slightly over 70% of our net worth in stocks, So at close on 2-15 I sold a little more than 20% of my portfolio mostly VTSAX, all in tax deferred funds. I'm just in cash now, not sure if I'll put it in anything. I'm more concerned about a loss now than earning a lot more. Last year was so goo I earned 6 years of spending, so I feel better just sitting on the sideline for a bit.
Anyone else moving that direction?
PS, tell me when to get back in.
Next time tell me when to get out...
Jeb-NY
Recycles dryer sheets
During the big boom the last few years I decided to let my AA drift to more equities by not rebalancing. I planned to go from 50/50 to 60/40. In early January I had drifted to 62/38 so decided to sell enough equities in my IRA so I could pull my RMDs for the next 3 years out of cash reserves and that pulled me back to about 59/41. Now I will let everything ride out whatever happens. My current plan is to do nothing unless I drift back below 50/50 then I will start rebalancing. If it goes back up to above 60/40 I will also rebalance as needed. This was more about the over extended market that anything going on in the world.
Markets do not like uncertainty and disruptions. A full out War in that region means gas and oil (primary exports from Russia) prices will spike and further exacerbate inflation.
I definitely think there will be a correction caused by the potential of war and inflation, but this time the Feds can't print and spend there way out of it. I have some dry powder ready to deploy and dollar cost average.
ElizabethT
Full time employment: Posting here.
After the early-2020 Pandemic pull back/dip/crash, I realized my excessive worry was an indicator that we had a higher % in stocks than ongoing peace of mind would dictate. So, when the first large rebound occurred in Spring of 2020, we reduced our equities exposure by 10%. I know this was the right thing to do, and at the right time, as evidenced by how mild my concern (or pretty much lack of) with this current pull back is.
I don't think of it as a case in successful market timing in 2020. Rather, I think of it as recognizing that what was right for us in our 40's and 50's with regard to market exposure was no longer right for us in our 60's. So with the right exposure for this period of our lives now in place, we'll be staying the course through the current ride.
I don't think of it as a case in successful market timing in 2020. Rather, I think of it as recognizing that what was right for us in our 40's and 50's with regard to market exposure was no longer right for us in our 60's. So with the right exposure for this period of our lives now in place, we'll be staying the course through the current ride.
RobbieB
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
- Joined
- Mar 22, 2016
- Messages
- 8,968
I sold a hundred and sixty grand of equities back in January to fund 2022.
I'll do it again next January unless it's really bad, but then that's why I have some bonds too.
Not selling or buying, standing pat.
I'll do it again next January unless it's really bad, but then that's why I have some bonds too.
Not selling or buying, standing pat.
Gearhead Jim
Full time employment: Posting here.
My recent balance had drifted slightly above my desired equity ratio, but the market has corrected that for me!
Montclairbobbyb
Recycles dryer sheets
Amen...
Have a neighbor that got out of the market after 9-11----2001, he still has not got back in. The $200k he got out, would be over $800k now.
Life changing!
The question is good. But, it's not the market that is so concerned, it is investors with historical knowledge about what happens at the beginning of any war.They are worried about their money. If they get out, the market drops a little, others see this drop and they get out, more people see the drop and they get out.
Might not have much effect on our economy, but the market still drops.
Sure, go ahead pile on the to the negative market forces already listed.
We could start with age, throw in some inflation, add a war between Russia and Ukraine, and throw in an important pipeline into Europe Add a supply line shortage issue and it sure gives you something to think about.
I probably didn't post this, I sold a huge portion of the portfolio into cash from stocks in December. Went from 100/0/0 to 30/0/70, and technically I have 10% shorting small growth, so it is a bit more conservative than that. I had been 70/30/0 since I started investing in 2005-2008, and switched to 100% stocks in March 2009.
My philosophy is that it is not worth moving to cash at all, unless you think with reasonably high certainty a recession will likely occur within 2 years or less, and I think enough macroeconomic indicators are finally there now. Obviously current events, such as distant wars, or supply shocks, etc..., do not factor in much at all in my opinion.
My philosophy is that it is not worth moving to cash at all, unless you think with reasonably high certainty a recession will likely occur within 2 years or less, and I think enough macroeconomic indicators are finally there now. Obviously current events, such as distant wars, or supply shocks, etc..., do not factor in much at all in my opinion.
Last edited:
Old Microbiologist
Recycles dryer sheets
We are fully cash now but day trade daily yet always sell and return to cash by the end of the market day regardless of profit or loss. There are too many unknowns and obvious manipulations that happen overnight. We already have the experiences of 2008 so are very cautious now. We don't live off of or even touch our investments so it isn't a problem. Our pensions are more than sufficient for our needs and even then we build cash from what we don't use. We vastly over-estimated our needs in retirement. I have been cautioned for anything political so will leave it simple. The US economy is in an enormous bubble with nothing supporting it except the dollar is the world reserve currency. Our foreign policy decisions are forcing the world to reconsider this. I don't see a collapse anytime soon but civil unrest in the US might be the black swan event and oil going over $200 a barrel might do it.
Russia has recognized the entire oblasts of Luhansk and Donetsk but the LDR and DPR only physically occupy less than half of their territory. The Ukrainian Army has roughly 60,000 forces entrenched at the line of contact for over 10 months now so I expect an issue in the coming days when Russia politely asks these forces to vacate the territory belonging to LDR and DPR. Right or wrong this is going to happen. How Ukraine reacts to this and the outcome of that decision will be a potential for larger conflict. No one in Europe or the US wants to go to war with Russia. So, all we will see is a lot of rhetoric and sanctions that Russia prepared for well in advance. The reverse sanctions from Russia will also be very painful for the US. Russia exports a lot of oil to the US as it is making up for the heavy crude we used to get from Venezuela. The Fracking distillate is too light to make gasoline and must be mixed with very heavy crude which we are currently getting from Russia. Without that oil, the US is in trouble meeting domestic demands. Most lumber is coming from Russia as well, all titanium comes from Russia (essential to aerospace), and a large amount of nickel, cobalt, and aluminum as well. Anyway, my point is we are at a period in time where small things can end in disastrous results, especially to an obviously overblown market. We are also $30 trillion in debt (Russia has zero debt) and that is oging to have to come due. The problem with raising interest rates is the money used to service this debt will increase exponentially if rates go up. The Fed only has a few tools to fight inflation and they have over-printed the dollar far in excess funding risky ventures that have no potential for financial returns other than purchasing wespons.
So couple domestic unrest with foreign policy issues along with central bank problems and you get a black swan potential. Failure to predict Russian response to our ignoring their demands is the root cause of these problems in Europe. However, it is not too late to change our decisions but our exceptionalism and ignorance will prevent us from doing the right thing here which may result in suicide for the US. Canada is an example of where this is heading. Then we have China, yet another debacle in the making. Add in Syria, Venezuela, Honduras, Brazil, Taiwan, Iran, Iraq, Yemen, etc. and there are so many fires to put out any of which can result in big problems. We are vastly over-extended and our military is not capable of fighting peer adversaries let alone so many near-peer ones.
So, yes, at this point in time cash is king and we are seriously considering moving our cash to something more stable than US dollars. The question is what currency that might be and how to switch. All 5 of our pensions are from the US government and should things go really wrong and the US default our pensions will become meaningless. It is not very likely but also not impossible. I recall watching the Soviet Union go this way and the potential for a repeat is there for the US. The similarities are way too real for me.
Russia has recognized the entire oblasts of Luhansk and Donetsk but the LDR and DPR only physically occupy less than half of their territory. The Ukrainian Army has roughly 60,000 forces entrenched at the line of contact for over 10 months now so I expect an issue in the coming days when Russia politely asks these forces to vacate the territory belonging to LDR and DPR. Right or wrong this is going to happen. How Ukraine reacts to this and the outcome of that decision will be a potential for larger conflict. No one in Europe or the US wants to go to war with Russia. So, all we will see is a lot of rhetoric and sanctions that Russia prepared for well in advance. The reverse sanctions from Russia will also be very painful for the US. Russia exports a lot of oil to the US as it is making up for the heavy crude we used to get from Venezuela. The Fracking distillate is too light to make gasoline and must be mixed with very heavy crude which we are currently getting from Russia. Without that oil, the US is in trouble meeting domestic demands. Most lumber is coming from Russia as well, all titanium comes from Russia (essential to aerospace), and a large amount of nickel, cobalt, and aluminum as well. Anyway, my point is we are at a period in time where small things can end in disastrous results, especially to an obviously overblown market. We are also $30 trillion in debt (Russia has zero debt) and that is oging to have to come due. The problem with raising interest rates is the money used to service this debt will increase exponentially if rates go up. The Fed only has a few tools to fight inflation and they have over-printed the dollar far in excess funding risky ventures that have no potential for financial returns other than purchasing wespons.
So couple domestic unrest with foreign policy issues along with central bank problems and you get a black swan potential. Failure to predict Russian response to our ignoring their demands is the root cause of these problems in Europe. However, it is not too late to change our decisions but our exceptionalism and ignorance will prevent us from doing the right thing here which may result in suicide for the US. Canada is an example of where this is heading. Then we have China, yet another debacle in the making. Add in Syria, Venezuela, Honduras, Brazil, Taiwan, Iran, Iraq, Yemen, etc. and there are so many fires to put out any of which can result in big problems. We are vastly over-extended and our military is not capable of fighting peer adversaries let alone so many near-peer ones.
So, yes, at this point in time cash is king and we are seriously considering moving our cash to something more stable than US dollars. The question is what currency that might be and how to switch. All 5 of our pensions are from the US government and should things go really wrong and the US default our pensions will become meaningless. It is not very likely but also not impossible. I recall watching the Soviet Union go this way and the potential for a repeat is there for the US. The similarities are way too real for me.
lawman
Thinks s/he gets paid by the post
This is nothing short of depressing..
Similar threads
