The sky is falling..

[karen1972]

I can appreciate you being frustrated with yourself for not sticking to philosophy. I've had kind of the opposite situation. I told my brother it looked like we were entering a head and shoulders event, and remember saying, if that happens, its going to fall off the cliff like a knife and be so sharp you will be afraid to catch it... ie it will be so rapid and steep that most people will become paralyzed to react.

And that is EXACTLY what happened and I did nothing. Having just lost the most amount of money ever, I'm beating myself up about staying put and not taking action.

 

[rayinpenn]

<p style="color:blue">Karen1972: Having just lost the most amount of money ever, I'm beating myself up about staying put and not taking action.</p>


I am going to go out on a limb here.. in a couple years this correction will be old news and the market will be climbing along.
Don’t beat yourself up.

 

[aja8888]

And that is EXACTLY what happened and I did nothing. Having just lost the most amount of money ever, I'm beating myself up about staying put and not taking action.

Karen, just look at today's market as a high point at this time. Odds are that the market makers (the computerized trading) are looking to take the market lower before capitulation and all the retail participants have sold out their positions and the computer traders have gobbled all them up.

I've been moving into cash for weeks now and still may sell more equities. But at some point, the tide will turn and then it will be time to load up again. Or, you can just sit there and wait for a turn up to feel better.

I'm considering putting 2/3 or more of my retirement funds in 3+% safety (CD's T Bills, Etc (but not bond funds as interest rates still have a way to go up).

 

[Rianne]

Questions: Does anyone have statistics on what group is the largest buyer in the markets. Which I guess would be who's the largest seller? Aren't there funds that make money on the market going down, like the guys in the Michael Lewis The Big Short. Just answered above, I guess

 

[audreyh1]

I can appreciate you being frustrated with yourself for not sticking to philosophy. I've had kind of the opposite situation. I told my brother it looked like we were entering a head and shoulders event, and remember saying, if that happens, its going to fall off the cliff like a knife and be so sharp you will be afraid to catch it... ie it will be so rapid and steep that most people will become paralyzed to react.

And that is EXACTLY what happened and I did nothing. Having just lost the most amount of money ever, I'm beating myself up about staying put and not taking action.

But you can do something after a big drop. You can rebalance back to your target AA.

 

[tdv2]

But you can do something after a big drop. You can rebalance back to your target AA.

+1
Sometimes you need to even resist the urge to time the re-balance event.

 

[JoeWras]

OK, so the talking heads this morning on the mainline cable channels were looking at us with stern and sad eyes, telling us that our retirement accounts are in trouble.


With the "biggest post Xmas jump in 45 years," will they be tap dancing and telling us everything is OK tomorrow?


Nope. Fear sells. They will not. Might just ignore the whole thing and find another fear topic.

 

[GR111]

Stick to the long term plan, and look for good deals along the way. Life is good.

 

[ER Eddie]

I have a feeling that paying attention to stock fluctuations on a daily basis is similar to paying attention to news-of-the-day politics. It just stirs you up and creates tension. I think I'm better off not really paying attention to the day-to-day stuff.

 

[MichaelB]

I have a feeling that paying attention to stock fluctuations on a daily basis is similar to paying attention to news-of-the-day politics. It just stirs you up and creates tension. I think I'm better off not really paying attention to the day-to-day stuff.

Words of wisdom here.

 

[Chuckanut]

I have a feeling that paying attention to stock fluctuations on a daily basis is similar to paying attention to news-of-the-day politics. It just stirs you up and creates tension. I think I'm better off not really paying attention to the day-to-day stuff.

+1

 

[Carpediem]

I have a feeling that paying attention to stock fluctuations on a daily basis is similar to paying attention to news-of-the-day politics. It just stirs you up and creates tension. I think I'm better off not really paying attention to the day-to-day stuff.

+1 That's exactly what I've been trying to do. Finding it hard to break the habit but it sure feels good when I'm able to.

 

[Major Tom]

I think that I must be just about the least helpful member of this forum, contributing very little of use to others. Since beginning portfolio withdrawals around 8 years ago, I have not consciously rebalanced. However, other activities such as additions to the portfolio, and the selling of equities to generate funds to cover living expenses, inadvertently contributed to rebalancing. I do not watch my AA very closely. My target equity allocation is 60% but at last look, it was closer to 70 (it has probably dropped a bit lower in recent days!)

If anything, in another 10 or 20 years, perhaps I can serve as a hopeful example for those who, like me, occasionally wonder if they should be doing more to manage their portfolio, but don't really have the interest or motivation. I feel fairly convinced that, if you can live off less than 3% WR, and are fairly impervious to big swings in NW, your exact AA is not too important. If you are particularly averse to volatility (or if you're perverse enough to actively enjoy it), you can adjust your AA accordingly.

This seems to be one of those areas where being slightly apathetic and detached can actually be of benefit!

 

[haha]

Buy and Hold has different interpretations. Even the eternal buy and holder John Bogle stated that tactical AA change is fine. OTH, there are b&h zealots who would flog you!

To me this means, "sure go ahead and market time, everyone does, but be sure to call it "tactical asset allocation.""

OK boss, como quieres.But this artful speaking is a bit over the top.

Ha

 

[JoeWras]

I think that I must be just about the least helpful member of this forum, contributing very little of use to others. Since beginning portfolio withdrawals around 8 years ago, I have not consciously rebalanced. However, other activities such as additions to the portfolio, and the selling of equities to generate funds to cover living expenses, inadvertently contributed to rebalancing. I do not watch my AA very closely. My target equity allocation is 60% but at last look, it was closer to 70 (it has probably dropped a bit lower in recent days!)

If anything, in another 10 or 20 years, perhaps I can serve as a hopeful example for those who, like me, occasionally wonder if they should be doing more to manage their portfolio, but don't really have the interest or motivation. I feel fairly convinced that, if you can live off less than 3% WR, and are fairly impervious to big swings in NW, your exact AA is not too important. If you are particularly averse to volatility (or if you're perverse enough to actively enjoy it), you can adjust your AA accordingly.

This seems to be one of those areas where being slightly apathetic and detached can actually be of benefit!

Well, you inadvertently rebalanced. However, what you bring up, i.e. adjusting allocations through withdrawals or additions is one slow strategy to rebalance. While we were accumulating, that's how I did it.


As for the current excitement, I'm still too close to target to mess around right now.

 

[NW-Bound]

To me this means, "sure go ahead and market time, everyone does, but be sure to call it "tactical asset allocation.""

OK boss, como quieres.But this artful speaking is a bit over the top.

Ha

I feel differently. It shows that Bogle is not a hard-core EMH proponent.

He acknowledged that the market could be "stupidly" overvalued or undervalued. And he also meant that it did not happen that often, hence one had to be careful jumping in/out of the market. He said "tactical AA", then changed it to "strategic AA", and added that one got to do this only a couple of times in his lifetime.

I did not see anything Bogle said that I had problems with.

 

[target2019]

To me this means, "sure go ahead and market time, everyone does, but be sure to call it "tactical asset allocation.""

OK boss, como quieres.But this artful speaking is a bit over the top.

I found a longer, more complete discussion by Bogle concerning tactical asset allocation. It is in one of his books, "On Common Sense in Mutual Funds." I probably read this in the 2005 era. The section is available in Google Books. Pages 88 through 90 discuss Fine Tuning Your Balance.

https://books.google.com/books?id=a...utual funds tactical asset allocation&f=false

It was unfair of me to post an earlier link to what someone wrote about what Bogle said, instead of beginning with his own words. Reader will have to draw their own conclusion. Even better, one can read the entire book.

My take-away is that a few tactical changes in a lifetime when valuations go insane is a reasonable safety relief from a rigid asset allocation. And this is really a very minor part of Bogle's writings and speeches. I understand market-timing to mean dangerous behavior investors repeat every time there is a correction. So, a large gulf exists between market-timing and changing AA a few times in a lifetime. That is how I see things.

 

[HadEnuff]

I found a longer, more complete discussion by Bogle concerning tactical asset allocation. It is in one of his books, "On Common Sense in Mutual Funds." I probably read this in the 2005 era. The section is available in Google Books. Pages 88 through 90 discuss Fine Tuning Your Balance.

https://books.google.com/books?id=a...utual funds tactical asset allocation&f=false

It was unfair of me to post an earlier link to what someone wrote about what Bogle said, instead of beginning with his own words. Reader will have to draw their own conclusion. Even better, one can read the entire book.

My take-away is that a few tactical changes in a lifetime when valuations go insane is a reasonable safety relief from a rigid asset allocation. And this is really a very minor part of Bogle's writings and speeches. I understand market-timing to mean dangerous behavior investors repeat every time there is a correction. So, a large gulf exists between market-timing and changing AA a few times in a lifetime. That is how I see things.

I agree with you and with Bogle on this.

 

[audreyh1]

But isn’t that just saying pay attention to market valuation and change your AA when it seems prudent (i.e. tactical)? Hard to claim that isn’t market timing especially when the “prudent” part will often come down to gut feel. Does he offer valuation metrics for detecting when the markets have “gone insane”?

This has nothing to do with changing AA based on personal events unrelated to market activity such as getting ready to retire, aging, inheritance, family changes, etc.

 

[target2019]

On Shiller PE Ratio I see two examples in my lifetime investing. One is at 2000, other may be at 2018?

 

[street]

I think that I must be just about the least helpful member of this forum, contributing very little of use to others. Since beginning portfolio withdrawals around 8 years ago, I have not consciously rebalanced. However, other activities such as additions to the portfolio, and the selling of equities to generate funds to cover living expenses, inadvertently contributed to rebalancing. I do not watch my AA very closely. My target equity allocation is 60% but at last look, it was closer to 70 (it has probably dropped a bit lower in recent days!)

If anything, in another 10 or 20 years, perhaps I can serve as a hopeful example for those who, like me, occasionally wonder if they should be doing more to manage their portfolio, but don't really have the interest or motivation. I feel fairly convinced that, if you can live off less than 3% WR, and are fairly impervious to big swings in NW, your exact AA is not too important. If you are particularly averse to volatility (or if you're perverse enough to actively enjoy it), you can adjust your AA accordingly.

This seems to be one of those areas where being slightly apathetic and detached can actually be of benefit!

^ Interesting reply and I thought you were talking about me. I also am one of the least helpful member on this site. I guess that is why I'm here is to learn and thankful for all the good people here that do have the answers and willing to help me.

Great post.

 

[Trooper]

I think that is a very legit strategy to address SORR.... Had I been aware of that strategy [a more conservative AA earlier in retirement] when I retired I we'll might have done that.

Me too. I was aware of that strategy but decided to go with a more traditional 60/40 AA with an annual rebalancing. I'm still thinking of going safer, but can't force myself to pull trigger. We are "only" 61 and 60 years old, and the thought of not having the growth afforded by equities scares me.

This seems to be one of those areas where being slightly apathetic and detached can actually be of benefit!

Totally.

 

[ER Eddie]

+1 That's exactly what I've been trying to do. Finding it hard to break the habit but it sure feels good when I'm able to.

It sure is a lot harder to ignore the day-to-day fluctuations when they get so large.

 

[rayinpenn]

<b>”We are "only" 61 and 60 years old, and the thought of not having the growth afforded by equities scares me.”</b>

I share your concern. The Mrs. has a grandma that lived into her 90s and another into her late 80s. Her and her sister enjoy incredibly low cholesterol like 120s. I suspect she will live a long time after I am gone. Id like to provide one last gift.. comfort. That to me means equities.

 

[corn18]

I'm fortunate in that my savings spreadsheet is not set up to easily figure out if I am making money or losing money. I had it set up to easily see that data, but then hid that portion.

My sole MOE for my retirement savings is simple: How much blow that dough money will I have when I retire @ 55 (52 now).

Current forecast = $25,795

That's enough.