What percentage of your wealth is in a safe fund such as bonds or cash?

[UnrealizedPotential]

Well , I wouldn't consider it safe, but I have a little over 40% in a global bond fund that went down about half of what the market did. It's bounced back some since then. It's safer than stocks, but not safe. I also have a little in cash. Cash would be safe, but it doesn't pay anything in this environment and I need income. I shouldn't say cash doesn't pay anything, it pays too little for my taste.

 

[Shredder]

Sold my last fund Tuesday on an uptick. 100% cash now. I feel blessed to be only 3-4% down this year. Tuesday felt like a good opportunity to bail.

Market timing? Yes, definitely, but im losing faith in the actual value of stocks/bonds since there's so much funny money out there now.

 

[airforce1]

I was considering moving reallocating more stock in my TSP but thought better of it and still remain 10% stocks and 90% treasuries.


The PPP program is almost depleted with no additional legislation in the pipeline, banks are way down, and unemployment continues to spike up.


Don't see things getting any better in the near future.

Edited: PPP program depleted.

 

[Mr._Graybeard]

I've got quite a bit sitting in Pimco's Income Fund (PIMIX/PONAX). It took a pretty good hit, in the area of 8%, but it looks like it's starting to crawl back out of the hole. A recent Financial Times article said Pimco lost a lot of AUM last month because of share redemptions -- not surprising. We'll see if it comes back as well as it did in 2008-'09.

 

[Mo Money]

Roughly 20% in short term and intermediate bond funds, as well as cash. I can live off of this 20% for at least a decade.

 

[Freedom56]

Just completed more corporate bond sales today and now I'm 41% cash 59% corporate bonds. I'm up 5.6% YTD and staying with corporate bonds of companies in technology, telecom, pharma, and biotech. I have plenty of dry powder to pick up bargains on the next fixed income sell-off which will likely be triggered by cascading defaults in retail, travel and leisure, commercial real estate, and oil and gas sector bonds.

 

[targatom2019]

94% cash...retiring in May...we will both have pensions to help as well. Before this virus nightmare we were up to 50/50

at least try to protect your cash from inflation.

 

[Perryinva]

And how is that done?

 

[Retired Expat]

Increased cash and reduced equity

I have a very diversified portfolio with a fair amount of rental real estate. Still pulled a few hundred K out of equities and will put it in MM or rolling over short term bonds so always cash on hand to live for 3 -5 years if things get truly nuts.

What would be truly nuts but not out of the realm of possibility is if this virus mutates and becomes more deadly, or another one pops up. Then virtually all leisure activities done in groups would end. Travel, theatre, concerts, sports finished! Ultimately all manufacturing becomes essential just on a much reduced scale. We will still need clothes, appliances, food, places to live etc so businesses would have to adapt.

On the other hand, I have forecast 35 years living well in retirement, but in that kind of world where it is only safe to be at home or away from people, I probably would be okay not living nearly so long!

 

[Starsky]

And how is that done?

Just put your cash into the safest interest-bearing CDs, annuities or similarly secure short-term investments. Right now inflation is very low, in fact deflation seems to be the direction we're headed in. That is one of the reasons CD rates are so low - there's no inflation to worry about.

When that changes, and inflation kicks in, money will become more expensive. All interest rates - including CDs - will go up because lenders will adjust their rates to account for the diminished Present Value of money over the lending term.

Back in '16, I put $120K in an annuity paying 3.85% for 5 years as my security blanket. I second guessed myself many times on this one, but I'm sleeping much better these days.

 

[Oz investor]

virtually no interest-bearing security exposure currently , maybe 1% via some LICs

i don't normally count the property interests outside the REITs holdings , the value is notional , those real estate folks will tell you anything , the tenant is out of work currently so the property is really only generating solar power rebates .

so a widely diversified equity portfolio about 5% cash some divs and solar power income , life could be worse

in a climate of rapidly shifting rules no debt instruments for me , not even a personal credit card

 

[ripper1]

I have about 70% of my fixed or bond side in a stable value fund earning 2.9%. I have an opportunity to go all in at 100% via my tax privileged account. Wondering if this is a good idea at this time.

 

[pjigar]

Only emergency fund which is about 2%. Disclaimer: I not FIREd yet.

 

[Dtail]

I have about 70% of my fixed or bond side in a stable value fund earning 2.9%. I have an opportunity to go all in at 100% via my tax privileged account. Wondering if this is a good idea at this time.

Do you have other options in your (401k) in case Stable Value rates decrease in the near future?

 

[Perryinva]

All the fixed earning rates will or have dropped. Most HY accounts are below 2%. I had over $200k in one that has been paying 2.7% for 3 years now. 4/13 they lowered it to 2%. Inflation is low now, so 2% keeps pace. But Long term cash keeping pace, when inflation takes off is what I meant. I don’t know if a short term annuity paying 3.5% is even possible today. I’m not worried in the least, but it is a good talking point, since I do expect inflation to rise with the government printing money.

 

[thepalmersinking]

24%

Obtaining wealth from your house will require you to take out a HELOC which seems kind of an odd way to get to your wealth via a loan...

I look at my house as something to live in vs. an asset counted towards my net worth. It’s paid off but is an expense producing asset - prop tax, insurance, maintenance....

 

[eytonxav]

I am currently at ~ 30/70. We are both retired. I am collecting SS (DW's will start in August) and DW has a small pension. I am older and am in the RMD phase. It was nice to get a reprieve from RMDs for this year as we do not need the $ or tax that goes with that. That said, I would not want to have a port that does not contain at least 20% equity regardless of market fluctuations, just as an inflation hedge and because I cannot time getting back in perfectly.

 

[ripper1]

Do you have other options in your (401k) in case Stable Value rates decrease in the near future?

There is one other option but that would be a bond fund....DODIX

 

[molly312]

We are at 30% stock and 70%cash, cd's, etc. We have NEVER raised cash during a down market before this. We have very little confidence as to how quickly the economy can recover and the incredible debt the federal government will have to reconcile. We are in our 70's and have concerns not for ourselves - as we are well covered - but for all the rest of our family. Near term, many families and individuals are going to have a lot of pain....with not much immediate help in sight. Give to your local food bank.

 

[Steeler75]

AA is now 39/43/18. Pensions take care of majority of expenses, with paid off house. Was 35 equities but up on rebalancing on the way down. Bounce has felt good but not confident in future direction with earnings and continued record setting unemployment numbers coming in Q2. Short term volatility is getting old...

 

[Dtail]

There is one other option but that would be a bond fund....DODIX

Personally, I wouldn't put all the eggs in one basket if there aren't other choices as an alternative.
Nevertheless, there clearly is a space for having Stable Value in one's portfolio.

 

[rkser]

Total Portfolio Asset Allocation is diversified with 40% in Fixed & 60% in Stock Funds, a paid off House & both kids have launched.

Out of the Fixed - 5% are in Bank CDs & Online Savings, which will cover 3 years of living expenses &
- 35% are diversified in Tax Exempt Bonds, Total Bond Index & International Bond Index

The 60% Stocks are diversified in Total Stock Index & Total International Index.

We are fortunate & thankful, life is good.

 

[Oz investor]

Obtaining wealth from your house will require you to take out a HELOC which seems kind of an odd way to get to your wealth via a loan...

I look at my house as something to live in vs. an asset counted towards my net worth. It’s paid off but is an expense producing asset - prop tax, insurance, maintenance....

in the area i live , the government handed out incentives to install solar panels on existing properties , the power company would install the panels with an interest-free loans and allowing you to repay it back with your power rebates ( the solar array generates MUCH more than the property normally uses ) so the loan was repaid quickly , and now generates income at no ongoing cost ( and NO power bills )

a more active person might also have other strategies to generate income from your home , the current lock-downs are a brilliant time to explore this area

 

[IMATERP]

34% Stock and 66% Fixed (Staggered CD’s and Bonds maturing over the next 6 years.). House is also paid, pension starts January 1st and I’m currently collecting $600+ UI per week based on an 8-10 hour a week gig that I’ve had for the past two years.

Nothing could be finer...

 

[Perryinva]

My electric bill averages about $60/mo. The electric utility is building solar farms like crazy. Why bother with personal solar at that price. (Not to mention they are not allowed where I live, hehe)