How many of you are almost exclusively in "safe" investments...where you can't lose value (other than inflation adjusted value)?

[DallasGuy]

How many of you are almost exclusively invested in "safe" investments (ie. cash, annuities, etc.)?

Almost all of my investments are in cash (CD's and money market accounts).
Cash/CD's is about 65% of my investments. I have a couple of annuities that make up about 35% of my investments but they can not drop in value. They can have a zero value gain year if the market is bad, but they can not go down. I sort of look at those investments like cash investments because they are fairly "safe".

I live comfortably on the return of those investments and combined with my Social Security income, I don't "need" any more income. My investments actually continue to grow slowly each year. It makes sleeping during down markets much easier.

UPDATE: I didn't include my home, paid off, which is worth about 15% of my net worth. I figure I have to live somewhere so I didn't count that plus it's not a "fancy" high dollar home.

 

[FlyingCircus]

I am an active asset allocator, following market health/breadth signals on a monthly and semi-monthly basis. Given the recent meltdown I am 40% cash, 40% closed-end bond / high yield funds, 10% foreign developed and <10% US stocks of any cap.

 

[Fermion]

Of liquid investments, about 40% of our money is in short to medium term treasuries and TIPS. Of our net worth, about 60% of our money is in land, paid off home, vehicles (including excavator worth 30k on used market), tools, and the 40% in the treasuries.

The remaining 40% of our net worth is in S&P500 and a tiny bit of international...and it has lost a few excavators or maybe a house in value the past few days.

 

[easysurfer]

I do the chicken 100 - age allocation. So, I don't have "that much" in equities at the moment.

 

[erkevin]

14.5% equities, 8% cash, 77% in CDs and bonds

 

[Flieger]

Depends if you include my future, COLA adjusted fixed income stream starting approximately 5 years from now which will cover 80%-90% of my costs.

If not, then about 23% currently is cash or cash equivalents.

Flieger

 

[imjustawarrior]

My desired AA is 75/25. I have not looked to see where I am currently. Easy come, easy go.

I'm guessing that I have about the same NW as when I retired 2+ years ago on an inflation adjusted basis. If need be, we will just spend less. We are not going back to w*rk. We have a lot of fat to trim before that would be necessary.

 

[COcheesehead]

15% equities, 10% alternative, 70% bonds, balance cash. That doesn’t really tell the story though. Our cashflow is has now risen to 2.5X our expense needs. We live off the cashflow, reinvest the rest into creating more cashflow. I have begun to realize in retirement critical mass doesn’t necessarily need to be the goal, critical massive cashflow is. We have no heirs. Charities will only benefit and they will still get a bunch of money no matter what.

 

[Trailwalker]

I have about 30% in Treasuries and TIPS, which takes me out about 9 years. The rest is in equities. No pension, no social security for 3-6 years.

 

[Gumby]

My percentage allocation to "safe" investments appears to be growing by the minute. So at least I've got that going for me.

 

[nun]

I have a TIAA Traditional account that just keeps truckin’ along and I will turn it into an annuity at some point as with my “loyalty bonus” the payout rate is 9.5%. My income comes from a DB pension and a downstairs rental and I have US SS and UK State Pension still to claim. Other than that I almost all equities so while stock market volatility is annoying it doesn’t impact my retirement income. I organized it that way with times like these in mind.

 

[REWahoo]

My percentage allocation to "safe" investments appears to be growing by the minute. So at least I've got that going for me.

+1

My AA is becoming more conservative, shedding risk by the hour!

 

[mystang52]

I was 25% Equity Index funds last week. I guess that percentage is lower now! Yesterday's market result is precisely why I had that percentage. I'm conservative by nature, and once ER'd I did not want sharp fluctuations in my holdings. S.S. and pensions provide more than we need, so I don't have to watch my holdings, and that's how I want it.

 

[Mr._Graybeard]

I hold a lot of municipal bonds that suffered when interest rates rose because they can be thinly traded. When interest rates were low, they usually were called as soon as possible, so I started stretching my time horizon to the late 2030s. I hope to live long enough to see them mature. In the meantime they throw off tax-free interest.

One worrisome aspect of the 2008 crash was when the credit crisis caused the Reserve Primary money-market fund to "break the buck," with shares falling below $1. Safety is relative, hardly ever absolute.

 

[pb4uski]

How many of you are almost exclusively invested in "safe" investments (ie. cash, annuities, etc.)? ...

I'm close. I have a small amount of VTSAX that was down 5.08% yesterday and probably another 3% today but it is only 3-4% of our total but it accounts for most of the daily change.

About 30% of my portfolio is preferred stocks.. and mostly innvestment-grade issuers and those are pretty steady. The rest is a combination of brokered CDs, Treasuries, TIPS, corporate bonds (again mostly investment grade) and money market funds.

As of now we're -0.30% for the day but that excludes VTSAX because the drag from that won't appear until after closing since it is a mutual fund. Yesterday was -0.16% for the day. Preferreds were -0.92%, VTSAX was -5.08% and bonds were +0.31%. In any event, I expect to be down less than 1% between yesterday and today with much the decline due to VTSAX. I don't usually watch it so closely but given the market gyrations yesterday and today I am curious as to the impact on my "capital preservation" portfolio.

I'm skeptical that your annuities can't possibly go down in value and I'm pretty familiar with annuities since I worked in the industry. One way to assess this is to look at a "bad" year like 2022 and look at the beginning and ending cash surrender values and also the beginning cash surrender values with surrender fees added back. If those numbers don't go down in "bad" year then you may be correct.

 

[Montecfo]

Good to be in cash now. I have quite a bit but mostly funds awaiting investment.

I do not see holding cash as an income generator as being great since the rate fluctuates and currently heading lower.

 

[Texas Proud]

I am not that worried about the ups and down of the market... it has paid me well over the years to be in equities over anything else...

Recent downturns do hurt as portfolio is much higher than the HUGH drops when I was younger... but I am still way ahead of being what I describe as scared...

 

[Dash man]

We typically have a 75/25 allocation not counting real estate. I haven’t check lately to see how it’s changed. When I look at my stocks, I also look at the five year chart to see how well we’ve done.

 

[Teacher Terry]

A few months ago I got out of anything risky and now just in cd’s, etc.

 

[Jerry1]

I’m 40% equities. With the rest being CD’s and a MYGA. My pension and SS income is such that my withdrawal rate is under 1% so basically, the equity portion is for legacy or LTC so I’m comfortable today but that doesn’t mean it doesn’t concern me when the market goes down. Especially when it’s associated with cost increases (inflation).

 

[socca]

15% equities, 10% alternative, 70% bonds, balance cash. That doesn’t really tell the story though. Our cashflow is has now risen to 2.5X our expense needs. We live off the cashflow, reinvest the rest into creating more cashflow. I have begun to realize in retirement critical mass doesn’t necessarily need to be the goal, critical massive cashflow is. We have no heirs. Charities will only benefit and they will still get a bunch of money no matter what.

I have a similar philosophy. I sacrificed a lot of personal comfort in exchange for cash flow back when I was running on the corporate hamster wheel; I'm still fond of it today. My "won the game" asset allocation as of the end of March 2025 was 30 / 20 / 50 - stocks / bonds / cash.

 

[Toocold]

I'm planning 40 years, so can't go all cash.

I'm 30% real estate, 25% cash/fixed income, and 45% stock.

Real estate does a nice job consistent cashflow and having a very low beta.

 

[OldShooter]

Well, first point is that I don't see buying power lost to inflation as any different from buying power lost due to declining asset values. It's all fungible money. I am loathe to lose either kind.

Second, I don't buy the ubiquitous notion that volatility is risk -- except to the extent of SORR.

Third, I would agree that equities are risky in the short term, but over the long haul they have been the safest holding.

Finally, IMO talking only about AA risks missing an important part of the story. A 'risky" AA for a widow with a few hundred $K is not at all a risky AA for a multimillionaire with LBYM habits.

 

[Al18]

At the beginning of February, I was at 50/50 stocks/fixed income. By the end of today, that may be 40/60. I sold some stocks in January and February, and have 1 year of expenses sitting in my savings account. I have casually been looking at my stocks and stock funds, and may buy a little soon.

 

[Out of Steam]

I’m 40% equities. With the rest being CD’s and a MYGA. My pension and SS income is such that my withdrawal rate is under 1% so basically, the equity portion is for legacy or LTC so I’m comfortable today but that doesn’t mean it doesn’t concern me when the market goes down. Especially when it’s associated with cost increases (inflation).

Our target has been 45% stock for the past two years, but taking the money for a "blow that dough" vacation from stocks and a mandatory sale of ESOP shares dropped us to 41%. With the recent stock drops, we're probably just below 40%.

My first Social Security payment is supposed to arrive this month. Assuming we actually see it, I've cut our withdrawal rate to 2% to start, though it could end up at 3%.

Because of the impact of inflation over what could be 25 more years of retirement, I'm not comfortable with being completely out of the stock market.