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

[big-papa]

I no longer target an AA. Baseline spending comes from 30 year TIPS ladders, quarterly dividends thrown off by stock in our taxable account and TIPS-Ladder based SS Bridges (which will be replaced by SS).

It works out right now to about 56% Stock/44% TIPS, I-bonds, and some ultrashort bond funds used to buffer withdrawals from TIPS as well as for planned home improvement projects. It was about 60/40 before the market churn started, but again, I'm not targeting anything.

Today, stock sales happen to pay tax on Roth conversions and larger lumpy/fun expenses.

Cheers.

 

[aja8888]

It would seem wise to me that we use up other countries' crude oil before we use our own. Then, when it starts to run short, we'll be in better shape than others.

It sounds easy, but crude oil reining is based on the capabilities of our approximate 150 refineries and their capabilities.

 

[Gumby]

It sounds easy, but crude oil reining is based on the capabilities of our approximate 150 refineries and their capabilities.

Is our crude oil less difficult to refine than, say, Saudi crude oil?

 

[frayne]

Is our crude oil less difficult to refine than, say, Saudi crude oil?

It's a bit complicated but here is a good short copy and paste on the subject. "The U.S. both imports and exports crude oil because not all crude is the same—variations in density and sulfur content mean refineries are optimized for specific types. Many U.S. refineries, especially along the Gulf Coast, are configured to process heavy, sour crude, which is often imported. Meanwhile, the U.S. produces large volumes of light, sweet crude from shale formations, which some domestic refineries can't process efficiently. As a result, the U.S. exports this lighter crude to countries with refineries suited for it, while continuing to import heavier grades better matched to its own refining infrastructure."

 

[Gumby]

It's a bit complicated but here is a good short copy and paste on the subject. "The U.S. both imports and exports crude oil because not all crude is the same—variations in density and sulfur content mean refineries are optimized for specific types. Many U.S. refineries, especially along the Gulf Coast, are configured to process heavy, sour crude, which is often imported. Meanwhile, the U.S. produces large volumes of light, sweet crude from shale formations, which some domestic refineries can't process efficiently. As a result, the U.S. exports this lighter crude to countries with refineries suited for it, while continuing to import heavier grades better matched to its own refining infrastructure."

It's certainly not my area of expertise, but my basic understanding of crude oil refining is that it involves fractional distillation. The lightest molecular weight products boil off first and most easily, and they are collected high up in the stack. Heavier products boil last and require the most energy to extract useful product. And the sulferous sludge is what is left. I also understand that the lightest weight products are the most valuable.

I could be way off base, but is seems that while a refinery may need extra energy and extra steps to deal with heavy sour crude, it still should be able to process the (easier to process) light sweet crude, but not necessarily the other way around.

 

[audreyh1]

It's a bit complicated but here is a good short copy and paste on the subject. "The U.S. both imports and exports crude oil because not all crude is the same—variations in density and sulfur content mean refineries are optimized for specific types. Many U.S. refineries, especially along the Gulf Coast, are configured to process heavy, sour crude, which is often imported. Meanwhile, the U.S. produces large volumes of light, sweet crude from shale formations, which some domestic refineries can't process efficiently. As a result, the U.S. exports this lighter crude to countries with refineries suited for it, while continuing to import heavier grades better matched to its own refining infrastructure."

Kinda of nuts really. I know it’s been decades in the making.

 

[Tommyboy]

22% Equities (Long term growth, currently short term agony)
11% BDC, CEF (Acting like equities. Used for income production in Roth)
52% MYGA 4-7 year durations remaining. All 5.4 - 5.6%
15% cash.

 

[Koolau]

It would seem wise to me that we use up other countries' crude oil before we use our own. Then, when it starts to run short, we'll be in better shape than others.

I've always kind of thought this way as well. I've also thought that we should be ready to gear up production or have a much bigger reserve so that when an oil cartel wishes to hold us hostage we just quit buying from them. I know that would be a very difficult thing to do, but I think it would be worth it.

Well as Sen Kennedy just said: "In the long run, we're all dead." But I do worry about my kids' futures.

 

[Koolau]

22% Equities (Long term growth, currently short term agony)
11% BDC, CEF (Acting like equities. Used for income production in Roth)
52% MYGA 4-7 year durations remaining. All 5.4 - 5.6%
15% cash.

Finally someone with even fewer equities than I have. Likely a good move on the MYGAs though subject to the whims of inflation. Hopefully, they have generous withdrawal provisions.

 

[Tommyboy]

The ones I hold I can withdraw up to 10% of the fiscal years beginning balance, each year without penalty.

 

[Koolau]

The ones I hold I can withdraw up to 10% of the fiscal years beginning balance, each year without penalty.

I think that's pretty standard. You might have to consider doing that if inflation goes nuts again. IIRC you CAN get more by taking a penalty which still might be worth it under certain circumstances. Good luck to all of us MYGA holders.

 

[Tommyboy]

There are some that allow interest only withdrawals, some that only allow a max of 5% and some that do not allow any with withdrawals. I only consider the 10% ones though.

Yes, you can always take more out but the penalty is in the 8-5% range depending on how deep you are into the cycle. If you have to take it all out, the penalty is pretty steep. There are times you can take it all out without penalty. It's all in the fine print. It is slanted in their favor so be aware.

My purpose in buying these is for guaranteed cash flow for 4-6 years without having to tap on stocks. The plan is to wait until year 2, then only pull 7.5% per year and at term I will have spent a significant amount but the balance remaining will be close to the same as I started with.

I can then rinse and repeat or tap the stocks and make this the new basket of 4-5 years out fund. Rotate my buckets. Once I have more time, I'd like to learn bond trading better. I think I can get similar yields without having to play the annuity game where the deck is slightly stacked against the user.

 

[Koolau]

There are some that allow interest only withdrawals, some that only allow a max of 5% and some that do not allow any with withdrawals. I only consider the 10% ones though.

Yes, you can always take more out but the penalty is in the 8-5% range depending on how deep you are into the cycle. If you have to take it all out, the penalty is pretty steep. There are times you can take it all out without penalty. It's all in the fine print. It is slanted in their favor so be aware.

My purpose in buying these is for guaranteed cash flow for 4-6 years without having to tap on stocks. The plan is to wait until year 2, then only pull 7.5% per year and at term I will have spent a significant amount but the balance remaining will be close to the same as I started with.

I can then rinse and repeat or tap the stocks and make this the new basket of 4-5 years out fund. Rotate my buckets. Once I have more time, I'd like to learn bond trading better. I think I can get similar yields without having to play the annuity game where the deck is slightly stacked against the user.

Sounds like a very reasonable plan for a conservative portion of your investments. I've pared back my MYGAs recently as I needed some cash that I could take with a lower amount being taxable at the time.

 

[Original Wally]

OK - I had to go and actually LOOK at everything. I **thought** was roughly 70/30 Debt / Equities.
Turns out:
Cash 5.7%
An Annuity 16.8% (using Cash Surrender Value
CDs 18.0%
Bonds 36.2%
Equities 23.3% < a market basket of Vanguard EFTs

Looks like I need to do a little more work. Once things settle down.
Shrug

 

[DrRoy]

I started the year at about 50% equities, my lowest level in decades.

 

[Koolau]

I started the year at about 50% equities, my lowest level in decades.

Heh, heh, better lucky than good??

One of my mottos.

 

[jim584672]

I'm in safe stuff, waiting on my pending money pipes (pension and SS) to open in a few years which will cover expenses 3x over. Stock valuations are historically very high.

 

[Rocky mtn high]

Still 60/40

 

[Car-Guy]

90+% in CD's and MM's... The rest is in cold hard cash.

 

[Digger1000]

99% stocks, 8 years retired with no pension or SS. I am poor (by this boards standards). Sleep like a baby. Very happy and content.

 

[pacergal]

We generally stay about 70/30, as our AA and my Investment Policy is. We don't have as much saved as many here, but enough for us, hopefully. My calculators run to age 100 for safety.
We both have 100% lifetime state pensions and SS, which more than covers our monthly budget. Pensions have very modest colas of 2%.
For the most part, I am comfortable with our AA, I simply don't like to see it go down so much and so fast. But I hear my Dads sage advice and reassuring voice in my head "Don't worry , it will come back. You haven't "lost" anything if you haven't sold anything ."
So far, Dear Dad, you have been right.

 

[Koolau]

We generally stay about 70/30, as our AA and my Investment Policy is. We don't have as much saved as many here, but enough for us, hopefully. My calculators run to age 100 for safety.
We both have 100% lifetime state pensions and SS, which more than covers our monthly budget. Pensions have very modest colas of 2%.
For the most part, I am comfortable with our AA, I simply don't like to see it go down so much and so fast. But I hear my Dads sage advice and reassuring voice in my head "Don't worry , it will come back. You haven't "lost" anything if you haven't sold anything ."
So far, Dear Dad, you have been right.

Yes. Simply recall 2008 and how well we who stuck it out did in the years following.

 

[albireo13]

Our AA is 65/35 now. I had been planning to dial that down to 50/50 or even 40/60 but, not right now with the market being clobbered. I guess I will ride it out and re-allocate opportunistically down the road.

 

[MarieIG]

Caveat: Referring to myself as smart money is a bold-faced lie.

And so - I do not spend my emergency funds on investments subject to much volatility (inflation risk excepted, i.e. short term treasuries / CDs).

I keep a cash cushion to cover mandatory expenses to avoid selling when I don't wish to do so.

My cash cushion is not dry powder.

I am not "backing up the truck" but rather buying in increments. Almost a dollar cost averaging approach.

I am currently concentrating more on funds than individual stocks, and with regard to individual stocks, looking for companies with more abilities to weather storms due to the propensity of my individual holdings to disappear when I have gambled on small, new, risky companies.

 

[albireo13]

As I approach 70yo (next year) I am getting less enamored with the plan of "riding out" market dumps.
Just gotta get through this one .....