Move to safer investments

[kgtest]

This time is not different. Stay the course as Jack Bogle says. Equities are already recovering because companies are still finding ways to be profitable. Remember the economy is not the stock market. Gotta keep em separated.

 

[Exchme]

The OP's portfolio sounds too volatile for near-retirees and not diversified if it can be down almost 20% while the market barely has the hiccups.

The S&P 500, including dividend reinvestment, is higher now than it was in June when the OP seems to have last noticed (though I'm guessing June was a typo and OP meant Jan.). Stocks bottomed out less than 13% below the Jan 4 peak on Mar 8, around the time the OP posted and stocks are now back within 5% of that all time high.

Even 100% stock shouldn't have performed like OP's portfolio and if OP is 100% stock, that's a lot more risk than normal.

So in addition to taking to heart the guidance to not fret about market volatility, OP might do well to tell us about the portfolio allocations and investments to let the good folks here help spot anything unsuitable.

 

[RobbieB]

Yes indeed. The only way to lose is to "lock in the losses"

Otherwise, keep 'em and win!

I know a lot of people that locked in the losses of 08-09, they are still working. I kept the 401K maxed out and shifted to all equities. Which meant I bought twice as many shares. When it came back (like it always does) oou-la-la!

 

[NW-Bound]

The OP's portfolio sounds too volatile for near-retirees and not diversified if it can be down almost 20% while the market barely has the hiccups.

The S&P 500, including dividend reinvestment, is higher now than it was in June when the OP seems to have last noticed (though I'm guessing June was a typo and OP meant Jan.). Stocks bottomed out less than 13% below the Jan 4 peak on Mar 8, around the time the OP posted and stocks are now back within 5% of that all time high.

Even 100% stock shouldn't have performed like OP's portfolio and if OP is 100% stock, that's a lot more risk than normal.

So in addition to taking to heart the guidance to not fret about market volatility, OP might do well to tell us about the portfolio allocations and investments to let the good folks here help spot anything unsuitable.

+1

See my emphasis above. Stocks that go up more than the market in a bull run will go down more than the market in a down turn.

What goes up the most goes down the most.

The worst case is that bubbly stocks may get totally decimated, or go bankrupt. Think dotcoms in the 1998-2000 time frame.

If you held dotcom stocks and waited for them to come back, well, they did not go back up. Most of them went down and out.

 

[Skitso999]

One of the things that hasn't been mentioned much is your spending. If you're worried about your ability to make it with what you have, perhaps you should get into watching your budget very closely with an app like Mint. Try it at Mint.com. This could give you a lot more confidence about your situation and your abilities going forward!

I've been meaning to do this myself by-the-way.

 

[target2019]

Sit tight. Like someone pointed out your sitting on 2.5 years of covered expenses. Relax and enjoy your life.

Great point! I’m 54yrs young, healthy, so I expect a long life. Thank you

You have a strategy that is working well for you. You have some fear, just like everyone. So you go through this and re-examine your asset allocation. You might need to adjust in the future. Take your time.

 

[DrRoy]

Hold. You would never know when to get back in anyway.

 

[Koolau]

Who said "Don't just do something - stand there."? Probably words to live by. You either trust in the market eventually recovering or you shouldn't be in the market. You're young enough for typical recoveries to make you whole - and then some. No guarantees - and this from the guy who bought high and sold low back in the day so YMMV.

 

[24601NoMore]

In the last hundred years of market history The average market downturn took 6 months to recover back to where it started before the recession.

Not sure where you're getting that data, but it's not accurate.

There have been many times that it's taken 4-5 YEARS for markets to get back to "where it started".

Take the drop that started in Nov 2007. That drop didn't recover until March, 2012 (4 years, 5 months to recovery), and at the bottom was down more than 50%.

Or, Sept 2000. That drop took 5 years, 8 months to recover from, and was down 44.11% at the low.

Lots of other examples not only from US but also International markets.

Anyone advocating "buy and hold" should be taking a very honest look at how your own mental well being would do if you're down 50 or so percent on your net worth with no idea IF it will come back in the time you need the money, or when it may get back to where you started.

Personally, I prefer to do active Risk Management and think it's very prudent to do so, vs. riding the bucking bronco - especially in our retirement years. Today's markets, for example, are giving us plenty of very clear signs that there are likely some pretty rocky times coming in the near future.

 

[Aerides]

Not sure where you're getting that data, but it's not accurate.

Typically, economists measure recovery time from the end of the recession. So, the 2007 one (an outlier statistically) didn't end until 2009, so its recovery is not counted until then.

It is also typical, for most of the past 10 or more recessions, after the day the recession technically ends, to average 3 to 4 quarters before the economic measures are back to prior numbers (from before the start of the recession) followed by further expansion and a strong upward trend.

 

[VanWinkle]

Not sure where you're getting that data, but it's not accurate.

There have been many times that it's taken 4-5 YEARS for markets to get back to "where it started".

Take the drop that started in Nov 2007. That drop didn't recover until March, 2012 (4 years, 5 months to recovery), and at the bottom was down more than 50%.

Or, Sept 2000. That drop took 5 years, 8 months to recover from, and was down 44.11% at the low.

Lots of other examples not only from US but also International markets.

Anyone advocating "buy and hold" should be taking a very honest look at how your own mental well being would do if you're down 50 or so percent on your net worth with no idea IF it will come back in the time you need the money, or when it may get back to where you started.

Personally, I prefer to do active Risk Management and think it's very prudent to do so, vs. riding the bucking bronco - especially in our retirement years. Today's markets, for example, are giving us plenty of very clear signs that there are likely some pretty rocky times coming in the near future.

I don't disagree that it would be nice to forecast the future based on some formula determined in advance. In the last 10 years, I have heard the bolded statement you made countless times. Which one is the real one? Nobody knows so we hold on to get every up day as well as every down day.

VW

 

[ERD50]

... Take the drop that started in Nov 2007. That drop didn't recover until March, 2012 (4 years, 5 months to recovery), and at the bottom was down more than 50%.

Or, Sept 2000. That drop took 5 years, 8 months to recover from, and was down 44.11% at the low. ....

OK, but that is ignoring the fact that there was a huge rise before that peak, the market more than doubled in the previous 5 years. Very, very few of us (probably no one on this forum) had a sudden windfall in Nov 2007 and dumped it all in the market. If you were adding funds in previous years, or just rode that crest, the drop from a peak is a somewhat artificial/narrow viewpoint.

... Anyone advocating "buy and hold" should be taking a very honest look at how your own mental well being would do if you're down 50 or so percent on your net worth with no idea IF it will come back in the time you need the money, or when it may get back to where you started. ....

And that is what an AA decision is all about. It would be very rare for someone with a conservative WR, and a reasonably 'conservative' AA to have to sell stocks while they are down. They would be drawing from fixed, and probably re-balancing into stocks, not out of them!

... Personally, I prefer to do active Risk Management and think it's very prudent to do so, vs. riding the bucking bronco - especially in our retirement years. Today's markets, for example, are giving us plenty of very clear signs that there are likely some pretty rocky times coming in the near future.

If the above were true, and repeatable, then why isn't it common for actively managed mutual funds/ETFs to out-perform the passive funds?

People have been saying the market has been giving those signs for a5 years, maybe more. Those people would have (and I'm sure some have) missed out on a lot of gains over that time. Now they have to make that up. Good luck!

-ERD50

 

[24601NoMore]

People have been saying the market has been giving those signs for a5 years, maybe more. Those people would have (and I'm sure some have) missed out on a lot of gains over that time. Now they have to make that up. Good luck!

-ERD50

Here's why I think "this time is different" with a bunch of new signs we have not seen in recent history:

- CPI ~8% (previously 2'ish or lower %) - this reduces Consumer consumption, which is ~70% of the US economy. Lower consumer consumption lowers corporate profits and in turn, equity valuations
- PPI even higher than CPI - Producers currently absorbing a lot of those costs..will lower corporate profits.
- Oil at $100 - $130/barrel (recently). This will further damage the US economy in 22 and likely beyond as the cost of oil is in just about EVERYTHING and affects far more than just the cost of gas at the pump
- Fed plan to raise FFR 8X (to 2-3%, per public statements). One Fed Governor just yesterday publicly said he is aiming for 3+% by EOY. Lots of public statements last few days by different Fed Governors talking about at least a 50 bps increase at the May meeting, and likely at the following meeting. That'd be two, 50 bps raises, back to back, followed by additional 25-50 bps raises through end of year winding up at 2 - 3% overall.
- QE ending
- Yield curve inverting (2s/10s flipped briefly yesterday..many other curves already inverted) - typically a very clear recessionary indicator
- Cost of debt (due to FFR and Yield curve increases) will further lower corporate profits
- Equity valuations continue to be at crazy levels compared to historical averages, even post 22 YTD drop
- GDP forecasts coming WAY down (Atlanta Fed forecast ZERO percent Q1 growth, for instance just a few weeks back. They've now increased it to...zero point 9 percent)
- Exogenous, geopolitical events - markets hate uncertainty as we all know..

We haven't had ANY of those signs or conditions in the recent past (aside from different geopolitical dust-ups, albeit not to the level we have with Russia/Ukraine and that putting the whole world on the edge of WW3). In fact, we haven't seen CPI and PPI numbers like this since the 70s.

So unfortunately, the market conditions we're facing in 22 are likely the most challenging of any of our lifetimes. Bond markets have already been crushed due to rising yields. Any of the factors I mention above could hit equity markets pretty hard and already started to do so in Jan-early March. In fact, I think it was JPMC that forecast a max of 4,700'ish by end of year, which is obviously less than a couple percent north of here. I've heard others (eg B of A) forecast that it's very likely the S&P will be south of 4K at some point this year. I haven't heard an EOY forecast from them, but lots of folks are saying S&P 3,600 from a TA perspective is pretty darn possible. FWIW..

I suppose we all have to make our own assessments of economic realities and invest accordingly. But it does appear the US economy is in for some pretty rough sledding for at least the next 12 months and likely much longer if we do slip into recession as many indicators are now suggesting is likely..

ETA - regarding your comment on why active fund managers can't consistently outperform passive..they're managing a lot more $$$ than individual investors, and "have" to maintain certain AAs per the prospectus. We as individuals don't face those same challenges and constraints. It's a lot easier to do risk management on a typical retiree portfolio than on one that has hundreds of millions of dollars, or even billions of dollars invested.

 

[Helen]

ETA - regarding your comment on why active fund managers can't consistently outperform passive..they're managing a lot more $$$ than individual investors, and "have" to maintain certain AAs per the prospectus. We as individuals don't face those same challenges and constraints. It's a lot easier to do risk management on a typical retiree portfolio than on one that has hundreds of millions of dollars, or even billions of dollars invested.

I think passive investing refers to index funds, which are huge, not to individual
portfolios. Part of the reason active management loses is due to the drag their fees place on the returns.

 

[VanWinkle]

Well it may be different this time per your post 24601NoMore, but I am not able to reduce my investments to reflect your information. I have already set my asset allocation where I can stay invested through a 50% decline in the stock market. If it gets worse than that, I'll just keep living on what I have and wait for better days. Good luck to you in your retirement and investing.

VW

 

[pb4uski]

Wife and I in June had 1.1 million invested. Stocks now down from then $200k should we hold still and forget about it or place in safer investments to minimize bigger losses if left alone. We are early retired and don’t put into our investment as we used to. We full time RV on a very low income of 40k until We’re 60yrs old in 6 yrs.
We work part time and have 100k in savings we pull from to get us there.
Your thoughts?

Agree with others that your portfolio must have abnormally high risk. $1.1 million invested in VTI (Vanguard Total Stock ETF) or VOO (Vanguard S&P 500 ETF) in June 2021 would each be worth over $1.1 at the end of Feb 2022 so it makes no sense that you are down $200k.

What is your asset allocation? What are your biggest tickers?

 

[Time2]

As far as VTI/VTSAX we were down 12.5% from the peak to on Nov 1, 21, to the trough on Mar 7, 22. I just checked VTI and mow we are only down 4.3% from the Nov 1, 21 peak. So we are headed in the right direction--
for now. I'm as concerned as 24601NoMore, I also think we have many headwinds piling up and are headed for problems later in this year. I'm pretty sure I'll be lightening up my about 70% AA.

I like Larry Kudlow and he is not keen on the economy in the near future.

 

[kjpliny]

Here's why I think "this time is different" with a bunch of new signs we have not seen in recent history:

- CPI ~8% (previously 2'ish or lower %) - this reduces Consumer consumption, which is ~70% of the US economy. Lower consumer consumption lowers corporate profits and in turn, equity valuations
- PPI even higher than CPI - Producers currently absorbing a lot of those costs..will lower corporate profits.
- Oil at $100 - $130/barrel (recently). This will further damage the US economy in 22 and likely beyond as the cost of oil is in just about EVERYTHING and affects far more than just the cost of gas at the pump
- Fed plan to raise FFR 8X (to 2-3%, per public statements). One Fed Governor just yesterday publicly said he is aiming for 3+% by EOY. Lots of public statements last few days by different Fed Governors talking about at least a 50 bps increase at the May meeting, and likely at the following meeting. That'd be two, 50 bps raises, back to back, followed by additional 25-50 bps raises through end of year winding up at 2 - 3% overall.
- QE ending
- Yield curve inverting (2s/10s flipped briefly yesterday..many other curves already inverted) - typically a very clear recessionary indicator
- Cost of debt (due to FFR and Yield curve increases) will further lower corporate profits
- Equity valuations continue to be at crazy levels compared to historical averages, even post 22 YTD drop
- GDP forecasts coming WAY down (Atlanta Fed forecast ZERO percent Q1 growth, for instance just a few weeks back. They've now increased it to...zero point 9 percent)
- Exogenous, geopolitical events - markets hate uncertainty as we all know..

We haven't had ANY of those signs or conditions in the recent past (aside from different geopolitical dust-ups, albeit not to the level we have with Russia/Ukraine and that putting the whole world on the edge of WW3). In fact, we haven't seen CPI and PPI numbers like this since the 70s.

So unfortunately, the market conditions we're facing in 22 are likely the most challenging of any of our lifetimes. Bond markets have already been crushed due to rising yields. Any of the factors I mention above could hit equity markets pretty hard and already started to do so in Jan-early March. In fact, I think it was JPMC that forecast a max of 4,700'ish by end of year, which is obviously less than a couple percent north of here. I've heard others (eg B of A) forecast that it's very likely the S&P will be south of 4K at some point this year. I haven't heard an EOY forecast from them, but lots of folks are saying S&P 3,600 from a TA perspective is pretty darn possible. FWIW..

I suppose we all have to make our own assessments of economic realities and invest accordingly. But it does appear the US economy is in for some pretty rough sledding for at least the next 12 months and likely much longer if we do slip into recession as many indicators are now suggesting is likely..

ETA - regarding your comment on why active fund managers can't consistently outperform passive..they're managing a lot more $$$ than individual investors, and "have" to maintain certain AAs per the prospectus. We as individuals don't face those same challenges and constraints. It's a lot easier to do risk management on a typical retiree portfolio than on one that has hundreds of millions of dollars, or even billions of dollars invested.

This is all true. Since the GFC, the people in charge have added $23T in debt and another $8T in balance sheet expansion at the Fed in order to prop the "markets" up. Most of the cost cutting we've done as a society...like off-shoring and small sizing products or making them cheap and disposable...can't be redone. I believe they have kicked the can as far as they are able. In my opinion as a nobody, logic indicates that we've squeezed all we can out of this economic and fiscal Ponzi. The future is not looking too bright. Ignore the numbers and the paper gains for a minute. Just look around at the world. I wish I could be more optimistic, but I took the red pill.

 

[FREE866]

Here's why I think "this time is different" with a bunch of new signs we have not seen in recent history:

- CPI ~8% (previously 2'ish or lower %) - this reduces Consumer consumption, which is ~70% of the US economy. Lower consumer consumption lowers corporate profits and in turn, equity valuations
- PPI even higher than CPI - Producers currently absorbing a lot of those costs..will lower corporate profits.
- Oil at $100 - $130/barrel (recently). This will further damage the US economy in 22 and likely beyond as the cost of oil is in just about EVERYTHING and affects far more than just the cost of gas at the pump
- Fed plan to raise FFR 8X (to 2-3%, per public statements). One Fed Governor just yesterday publicly said he is aiming for 3+% by EOY. Lots of public statements last few days by different Fed Governors talking about at least a 50 bps increase at the May meeting, and likely at the following meeting. That'd be two, 50 bps raises, back to back, followed by additional 25-50 bps raises through end of year winding up at 2 - 3% overall.
- QE ending
- Yield curve inverting (2s/10s flipped briefly yesterday..many other curves already inverted) - typically a very clear recessionary indicator
- Cost of debt (due to FFR and Yield curve increases) will further lower corporate profits
- Equity valuations continue to be at crazy levels compared to historical averages, even post 22 YTD drop
- GDP forecasts coming WAY down (Atlanta Fed forecast ZERO percent Q1 growth, for instance just a few weeks back. They've now increased it to...zero point 9 percent)
- Exogenous, geopolitical events - markets hate uncertainty as we all know..

We haven't had ANY of those signs or conditions in the recent past (aside from different geopolitical dust-ups, albeit not to the level we have with Russia/Ukraine and that putting the whole world on the edge of WW3). In fact, we haven't seen CPI and PPI numbers like this since the 70s.

So unfortunately, the market conditions we're facing in 22 are likely the most challenging of any of our lifetimes. Bond markets have already been crushed due to rising yields. Any of the factors I mention above could hit equity markets pretty hard and already started to do so in Jan-early March. In fact, I think it was JPMC that forecast a max of 4,700'ish by end of year, which is obviously less than a couple percent north of here. I've heard others (eg B of A) forecast that it's very likely the S&P will be south of 4K at some point this year. I haven't heard an EOY forecast from them, but lots of folks are saying S&P 3,600 from a TA perspective is pretty darn possible. FWIW..

I suppose we all have to make our own assessments of economic realities and invest accordingly. But it does appear the US economy is in for some pretty rough sledding for at least the next 12 months and likely much longer if we do slip into recession as many indicators are now suggesting is likely..

ETA - regarding your comment on why active fund managers can't consistently outperform passive..they're managing a lot more $$$ than individual investors, and "have" to maintain certain AAs per the prospectus. We as individuals don't face those same challenges and constraints. It's a lot easier to do risk management on a typical retiree portfolio than on one that has hundreds of millions of dollars, or even billions of dollars invested.

Everything you mention here is very well known and a few of the points have been in the headlines steadily and talked about ad nauseam.



My point is these things you state aren't "new" so lack any surprise punch that could drive us into a bear market. Headlines will grasp at anything that causes investor anxiety and as John Templeton used to say "the market climbs a wall of worry".

 

[24601NoMore]

Well it may be different this time per your post 24601NoMore, but I am not able to reduce my investments to reflect your information. I have already set my asset allocation where I can stay invested through a 50% decline in the stock market. If it gets worse than that, I'll just keep living on what I have and wait for better days. Good luck to you in your retirement and investing.

VW

No worries..I wasn't intending to suggest anyone adjust their own allocation, but just to explain why "risk management" is an approach that I personally prefer to just riding the bronco through thick and thin.

I actually hope I'm wrong on the outlook for US stocks over the next several years, as I still hold a big enough dollar allocation for it to be pretty painful if things do drop to any significant extent.

Just to add, I've held about 1/3 or my equity allocation in Internationals for the past 10-15+ years, and we all know how that's worked out. Maybe Internationals will finally have their day in 22. Valuations sure would seem to suggest they have a lot more potential upside than US does, as International PEs are a heck of a lot lower in many cases..again, my own strategy vs what I'm suggesting for anyone else

 

[24601NoMore]

Risk Management to me is doing things like the following (all of which I did today)..

- Sold 4.4% of my S&P 500 Index fund - I'm up 28% since 1/1/21..time to lock in some profits. Can easily re-increase with any number of index ETFs if/when it makes sense.
- Sold 14.8% of my mid-cap fund (high beta; has done really well in up markets, been crushed in down markets). Up nearly 6% since 1/1/21. Most other things I hold are down since then. Lock in profits before likely further downtrend wipes them out. I sold the Mutual Fund version of this but there's an ETF version that I can easily buy back in with once volatility settles back down.
- Sold 8% of my International Value fund - just about even from 1/1/21. High Beta. Expect this to also get crushed with further downside. More risk avoidance than anything but still making a decent profit over cost acquired at. Plus, I'm way overweight International (30+% of equity position) and need to reduce that..

All in all, this won't even reduce our overall equity position 1%, but it's a start..

This makes sense FOR US and in no way suggesting anyone else needs to do anything similar. But just trying to make the point that risk management doesn't mean "sell EVERYTHING" and go to cash, but take opportunistic profits or sell high beta holdings in volatile markets whenever it makes sense to reduce overall risk in a portfolio..FWIW..

Can markets go higher from here? Sure..but watching trading volume, it seems the rally of the past week+ may be fading and I do suspect we could be topping for now..plus, a lot of the rally appears to be from short squeeze and end of quarter fund re-balancing that ends tomorrow..where we go from there will be anyone's guess with all these headwinds the market is facing..

 

[kgtest]

Who said "Don't just do something - stand there."? Probably words to live by. You either trust in the market eventually recovering or you shouldn't be in the market. You're young enough for typical recoveries to make you whole - and then some. No guarantees - and this from the guy who bought high and sold low back in the day so YMMV.

Lol, as to the inverse idea of "Well, don't just stand there, do something!"

I've always been told to do the opposite of what the market is doing. If everyone is selling, buy.

Similar idea to what Koolau mentions when he said "Don't just do something - sand there."

Sometimes it's difficult, but rewarding to go against the grain.

 

[Koolau]

Risk Management to me is doing things like the following (all of which I did today)..

- Sold 4.4% of my S&P 500 Index fund - I'm up 28% since 1/1/21..time to lock in some profits. Can easily re-increase with any number of index ETFs if/when it makes sense.
- Sold 14.8% of my mid-cap fund (high beta; has done really well in up markets, been crushed in down markets). Up nearly 6% since 1/1/21. Most other things I hold are down since then. Lock in profits before likely further downtrend wipes them out. I sold the Mutual Fund version of this but there's an ETF version that I can easily buy back in with once volatility settles back down.
- Sold 8% of my International Value fund - just about even from 1/1/21. High Beta. Expect this to also get crushed with further downside. More risk avoidance than anything but still making a decent profit over cost acquired at. Plus, I'm way overweight International (30+% of equity position) and need to reduce that..

All in all, this won't even reduce our overall equity position 1%, but it's a start..

This makes sense FOR US and in no way suggesting anyone else needs to do anything similar. But just trying to make the point that risk management doesn't mean "sell EVERYTHING" and go to cash, but take opportunistic profits or sell high beta holdings in volatile markets whenever it makes sense to reduce overall risk in a portfolio..FWIW..

Can markets go higher from here? Sure..but watching trading volume, it seems the rally of the past week+ may be fading and I do suspect we could be topping for now..plus, a lot of the rally appears to be from short squeeze and end of quarter fund re-balancing that ends tomorrow..where we go from there will be anyone's guess with all these headwinds the market is facing..

I think you've made a good case that we're in for a bumpy ride going forward. I wouldn't have a clue what to trim - especially since I'm no more than 35% equities - spread among a wide range of indexes. But, my question would be, if one were to sell as you have done, what do you do with the cash? Right now, cash is a guaranteed loser (unless you can put it all into I-bonds - and then you will eventually pay taxes on the gains.) The cash I have (I actually call it cash-like) is invested so instead of losing 8% I hope to lose no more than 4%. Cheery thought. As always YMMV.

 

[24601NoMore]

I think you've made a good case that we're in for a bumpy ride going forward. I wouldn't have a clue what to trim - especially since I'm no more than 35% equities - spread among a wide range of indexes. But, my question would be, if one were to sell as you have done, what do you do with the cash? Right now, cash is a guaranteed loser (unless you can put it all into I-bonds - and then you will eventually pay taxes on the gains.) The cash I have (I actually call it cash-like) is invested so instead of losing 8% I hope to lose no more than 4%. Cheery thought. As always YMMV.

I plan to consolidate the cash and rollover to a MYGA at 3.2, 3.3%, fully aware that I'll lose purchasing power. (To me, that's a better outcome than losing 30-50% in a big market downdraft). When I map it all out, having that additional income to pay bills with means I have to pull less from the portfolio - and the plan continues to work just fine per my crazily complicated spreadsheet models. It's also just part of an overall strategy I'm executing to reduce equity exposure for the next several years. That's because I'm not comfortable with the risk I'm carrying in terms of our equity allocation (even though it's only 25% or so of our overall portfolio) and how I'd feel seeing that part of the portfolio drop 30-50%.

If we drop down sub 4K (say, 3,600 - 3,800), I may re-allocate cash into additional equities at those levels. My gut tells me that's not only possible, but likely, and that we are just in a "reflexive rally" that usually happens early in bear markets. I could be wrong, but it sure looks like that's what's going on at the moment. We could also break out to new all-time highs, but with the headwinds the market is facing, I see that as a less likely outcome barring some unforseen event like peace in Ukraine and an end to the war..

 

[Koolau]

I plan to consolidate the cash and rollover to a MYGA at 3.2, 3.3%, fully aware that I'll lose purchasing power. (To me, that's a better outcome than losing 30-50% in a big market downdraft). When I map it all out, having that additional income to pay bills with means I have to pull less from the portfolio - and the plan continues to work just fine per my crazily complicated spreadsheet models. It's also just part of an overall strategy I'm executing to reduce equity exposure for the next several years. That's because I'm not comfortable with the risk I'm carrying in terms of our equity allocation (even though it's only 25% or so of our overall portfolio) and how I'd feel seeing that part of the portfolio drop 30-50%.

If we drop down sub 4K (say, 3,600 - 3,800), I may re-allocate cash into additional equities at those levels. My gut tells me that's not only possible, but likely, and that we are just in a "reflexive rally" that usually happens early in bear markets. I could be wrong, but it sure looks like that's what's going on at the moment. We could also break out to new all-time highs, but with the headwinds the market is facing, I see that as a less likely outcome barring some unforseen event like peace in Ukraine and an end to the war..

Thanks. Not being critical because, as I always admit, I've made every mistake in the book (with the exception of NOT saving - always been a good saver): With your equities at only about 25%, I don't understand the major concern. In my case, at maybe 35% I know I could lose a bundle of that, but I have my other cash-like vehicles to sustain me until the market eventually returns. True, it might not return, but it always has.

Strictly being nosey here, do you have a small commitment to precious metals? That's been my "play" to (hopefully) make up for equity losses. It worked like a charm for me in the 2007/8 debacle. Very much YMMV - especially here on the forum.