Just discovered this forum and retirement is my topic these days. I am 56, have been living in New York for the past 30 years. Owned a condo in Manhattan until April of this year when I sold it in expectation of a popping of the bubble. I earn about $140,000 salary per year and always make the maximum 401k contributions. I have no debt and no property, not even a car. My liquid assets are $1.1 million. I did fairly well investing during the 90's, but I am much more focused on it now. The job is fine; excellent boss, regular hours, and little stress. However, I find it boring and would like to have my time to myself. But there is a complication: my wife is 27 and about to start a career in fashion design. If it were just me I would move away from NYC to somewhere with a lower cost-of-living. But I want my wife to have the career that she has dreamed of. So, we are committed to NY for the next 3 or 4 years until she can determine whether she likes working in the fashion industry or not. If not, then we would consider moving back to her country of Thailand, where the cost of living is quite cheap, at least at the current exchange rates.
All that's background. My concern is how to invest. About 40% is in tax-deferreed retirement accounts. At the moment, the after tax money is in T-bills, while I am waiting for the Fed's increases to peak before going for a longer duration. However, I am very wary of the stock market. I am persuaded that we are in a secular bear market so buy-and-hold may be a good way to lose money. Also, there is the likelihood of a resumption of the decline of the dollar once US interest rates start moving down again. (I have to admit that I am, in general, a gloom-and-doomer.) I worry about long-term investing in stocks with a high likelihood of an eventual 1987 or 1973-74 crash at sometime during my investing career. So these are the various approaches that I am currently considering:
1. Simply stay in T-bills and wait for the next recession and stock market crash (in 2006 or 2007?. Invest in equities at that point. If the real estate market crashes, then buy property although perhaps not immediately since deflation can be persistent.
2.. For Treasury bond exposure do T-bills until it looks like the Fed will start cutting and then spread out into a ladder with a 5-year maturity.
3. Use a market timing scheme to move in and out of equities frequently n an attempt to get some return while reducing risk. I know all about the conventional deprecation of market-timing. In the 90's bull market timing was unnecessary and the mutual fund companies railed against it because it didn't suit their interests while buy-and-hold did. However the current period may resemble more closely the 70's, another secular bear market and the heydey of market timing schemes. I will split the equity entries between a US total market index ETF and a foreign one.
4. At the time that the Fed starts lowering interest rates, move half of the bond allocation to funds of unhedged foreign bonds in the expectation of the resumption of the dollar decline.
5. Maybe put a small amount of the US bond allocation into I bonds as an inflation hedge, even though I don't think consumer inflation is a big risk long-term.
My goal is to fund as early a retirement for myself as possible, but that is complicated by not knowing now whether we will live in high-cost NYC or elsewhere. As long as we are here I will keep working. My retirement strategy must also provide for my wife's eventual retirement for which there are many variables at this early date.
Any suggestions or comments?
All that's background. My concern is how to invest. About 40% is in tax-deferreed retirement accounts. At the moment, the after tax money is in T-bills, while I am waiting for the Fed's increases to peak before going for a longer duration. However, I am very wary of the stock market. I am persuaded that we are in a secular bear market so buy-and-hold may be a good way to lose money. Also, there is the likelihood of a resumption of the decline of the dollar once US interest rates start moving down again. (I have to admit that I am, in general, a gloom-and-doomer.) I worry about long-term investing in stocks with a high likelihood of an eventual 1987 or 1973-74 crash at sometime during my investing career. So these are the various approaches that I am currently considering:
1. Simply stay in T-bills and wait for the next recession and stock market crash (in 2006 or 2007?. Invest in equities at that point. If the real estate market crashes, then buy property although perhaps not immediately since deflation can be persistent.
2.. For Treasury bond exposure do T-bills until it looks like the Fed will start cutting and then spread out into a ladder with a 5-year maturity.
3. Use a market timing scheme to move in and out of equities frequently n an attempt to get some return while reducing risk. I know all about the conventional deprecation of market-timing. In the 90's bull market timing was unnecessary and the mutual fund companies railed against it because it didn't suit their interests while buy-and-hold did. However the current period may resemble more closely the 70's, another secular bear market and the heydey of market timing schemes. I will split the equity entries between a US total market index ETF and a foreign one.
4. At the time that the Fed starts lowering interest rates, move half of the bond allocation to funds of unhedged foreign bonds in the expectation of the resumption of the dollar decline.
5. Maybe put a small amount of the US bond allocation into I bonds as an inflation hedge, even though I don't think consumer inflation is a big risk long-term.
My goal is to fund as early a retirement for myself as possible, but that is complicated by not knowing now whether we will live in high-cost NYC or elsewhere. As long as we are here I will keep working. My retirement strategy must also provide for my wife's eventual retirement for which there are many variables at this early date.
Any suggestions or comments?
.
