keep 5 years of cash at no risk, or maybe 20% of your portfolio at no risk
that way you always have cash for 5 years, and even if the market crashes it has always recovered it's losses plus within 5 years, without exception
yup, that's the idea
again, its fucking sad that fixed income has been killed via global monetary policy. Decades ago banks would give you 5% just to have your business in a 'savings account'. How about now? WHAT do seniors do for fixed income? bonds? lol, they yield less than inflation and are taxed shitty. Dividends from stocks!! sad. There are other income generating strategies of course.
another point is we are living longer. Things are more expensive-- what's a retiree to do to ensure his portfolio doesn't fall short, that he deosnt run out of money? In this environment? they need to take on greater risk- not unusal to have seniors with 60/40 portfolio!! do they have a choice?
again, its fucking sad that fixed income has been killed via global monetary policy. Decades ago banks would give you 5% just to have your business in a 'savings account'. How about now? WHAT do seniors do for fixed income? bonds? lol, they yield less than inflation and are taxed shitty. Dividends from stocks!! sad. There are other income generating strategies of course.
another point is we are living longer. Things are more expensive-- what's a retiree to do to ensure his portfolio doesn't fall short, that he deosnt run out of money? In this environment? they need to take on greater risk- not unusal to have seniors with 60/40 portfolio!! do they have a choice?
Good thread.
For those discussing strategy, are you talking about your 401K (and similar) type accounts or non-retirement brokerage accounts (or both)?
I have around $250K in all of my investment accounts (TSP, Roth, and non-retirement), plus savings/bonds/money market.
I have about $25K in "risky" stocks that I'm - pretty much - hanging onto even though they are down (around 15-25%; 5 stocks that I consider "risky", like pharm/tech). Honestly, if I lose it all I really don't care....but of course it would be nice to walk w/ something. So, advice? Should I dump these "risky" stocks now or just hold on and see what happens? Otherwise, I generally do the buy and hold strategy (I own VZ, KO, F, SSW, CLDT, APC, AGNC - that I'd like to hang onto - most pay dividends, and are solid companies).
For those discussing strategy, are you talking about your 401K (and similar) type accounts or non-retirement brokerage accounts (or both)?
I have around $250K in all of my investment accounts (TSP, Roth, and non-retirement), plus savings/bonds/money market.
I have about $25K in "risky" stocks that I'm - pretty much - hanging onto even though they are down (around 15-25%; 5 stocks that I consider "risky", like pharm/tech). Honestly, if I lose it all I really don't care....but of course it would be nice to walk w/ something. So, advice? Should I dump these "risky" stocks now or just hold on and see what happens? Otherwise, I generally do the buy and hold strategy (I own VZ, KO, F, SSW, CLDT, APC, AGNC - that I'd like to hang onto - most pay dividends, and are solid companies).
I guess that's the huge question, when do you dump your losers? There are many variables, like tax implications - do you need the loss write-offs? Or do you need the loss to offset gains from a tax
perspective? Tax implications aside, I try to look at the investment as objectively as I can and say: "Would the money I have invested in this one stock be better off in another place right now?" And if the answer is 'yes,' I dump it.
I should also have noted, I have two pensions coming my way (fire department & military). I will also get a small federal pension when I turn 60 (depending on a few variables, it should be around $1500-2000/month).....and possibly a VA stipend, around $1,000/month. So, I'm fine in retirement....and the pensions is basically the reason my retirement investment accounts are not bigger, as I never felt the need to fully fund them. I am trying to get them over $400K before I turn 55 (in 8+ years), however.
I would be interested to know how long ago, how and with what kind of money you guys started. Don't mean to pry, just trying to point myself in the right direction and start setting up myself. I would think its not as easy to invest in stock and such if we reside outside the US however there must be similar systems in other countries.
I did something similar a short time ago. Not all but a significant portion. I just think stocks in general are over priced. The best time to buy stocks are always when there is blood on the streets. You cant do that when you are fully invested. All you can do is change what you own.
I have a good portion in mutual funds only because that is my only 401k option. I have for the most part kept those in the market because I am dollar cost averaging those by adding each month.
The portion I pulled out about a month ago went mostly to a cash position with some in gold. I really hate gold but it is where money flees for safety. I also hate bonds.....just not a fan. Rates are so low I don't see a big upside in bonds.
For the record....last time I did this there was a signifcant market correction and I was happy to be sitting on the sidelines. The hard part is to know when to jump back in. I agree with whoever else said that.
Last year my self directed portfolio showed a 52% return. So even if i sit for 12 months it will still be a decent 24 month return.
I have a good portion in mutual funds only because that is my only 401k option. I have for the most part kept those in the market because I am dollar cost averaging those by adding each month.
The portion I pulled out about a month ago went mostly to a cash position with some in gold. I really hate gold but it is where money flees for safety. I also hate bonds.....just not a fan. Rates are so low I don't see a big upside in bonds.
For the record....last time I did this there was a signifcant market correction and I was happy to be sitting on the sidelines. The hard part is to know when to jump back in. I agree with whoever else said that.
Last year my self directed portfolio showed a 52% return. So even if i sit for 12 months it will still be a decent 24 month return.
Unfortunately, once people time a correction/bottom once, they obviously think it is easier to do than it really is.
And usually in most peoples life cycle, the second time they have more $ than they did the first time.
So whatever they made by timing the 1st time, they probably missed out on more gains by trying to time the 2nd time. Because again they just have more cash in general at that point.
And usually in most peoples life cycle, the second time they have more $ than they did the first time.
So whatever they made by timing the 1st time, they probably missed out on more gains by trying to time the 2nd time. Because again they just have more cash in general at that point.
Curious to see others opinion of the market going forward (longer term). The market obviously goes up when there are buyers for stocks. With the change in the USA from defined pensions to 401k. I think people were putting money into the market weekly. Because of that the market had to go up and it did.
Now we are getting closer to the crossroads. The baby boomers are now retiring and will need to start to pull money out of the market. For some that will be required as they continue to age. The boomer portion of the population will have an effect of bring the market down by selling and not buying.
What things can stop this effect? Millennials need to purchase more than boomers are taking out. That doesn't seem to be how the media projects Millennials. Millennials that are going to be educated and in the boomer generation would have had more disposable income to invest are going to be straddled with student loan debt that will prevent them from making investments in the market like their parents. The boomers because of them living longer may try to take higher risk and stay in the market longer.
Also how much effect does the foreign investor have in the equation because obviously we are in a global world.
Now we are getting closer to the crossroads. The baby boomers are now retiring and will need to start to pull money out of the market. For some that will be required as they continue to age. The boomer portion of the population will have an effect of bring the market down by selling and not buying.
What things can stop this effect? Millennials need to purchase more than boomers are taking out. That doesn't seem to be how the media projects Millennials. Millennials that are going to be educated and in the boomer generation would have had more disposable income to invest are going to be straddled with student loan debt that will prevent them from making investments in the market like their parents. The boomers because of them living longer may try to take higher risk and stay in the market longer.
Also how much effect does the foreign investor have in the equation because obviously we are in a global world.
Most studies show that baby boomer draw downs is not going to have a big impact on the market. Yeah, that is $ in the market and will rebalance more towards fixed income but you also got young workers with more defined comp plans paying in. Few studies you can find with google on this probably.
And in a low-interest rate world there is nowhere else to go, if rates ever do go up that should change, but who knows? Could be next quarter, could be in 2019.
And in a low-interest rate world there is nowhere else to go, if rates ever do go up that should change, but who knows? Could be next quarter, could be in 2019.
Something I have been thinking about but have not researched. The fact that the boomers are taking it out to live on and it is a bigger amount than a young person starting out and investing a percentage of their early career earnings (plus paying off debt). My initial thoughts are a net draw out of the market.
Good luck hope your right. I was up quite a bit 2 years ago sold everything and thought the same thing
your thinking now......well I'm still waiting
