Preparing for a bear market

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Dalelatham
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Preparing for a bear market

Post by Dalelatham » Sat Aug 11, 2018 2:43 am

My wife and I retired nine years ago and are now 65. Our financial investments are all in a diversified portfolio of Vanguard index funds. In addition, we have income from an inflation indexed pension and social security plus about $800,000 equity in our house. Until recently we were firm believers in riding out any downturns and did so during the 2008 meltdown without selling any stock funds. I do a financial checkup with Vanguard every year and we are able to easily keep our annual expenses at about 3% of our investments, giving us a 95% chance of ensuring our assets won’t be exhausted before we die.

Until a month ago, we were comfortable maintaining a 70/30 mix between stock and bond index funds. But we are increasingly concerned that there may be a recession in the next three years and it seems like we are taking more risk than needed. For that reason, we recently reallocated to a 50/50 mix. Our bond portfolio is now 66/34% domestic/international bonds, 76/24% intermediate term/short term bonds, and 40/60% high/medium credit quality bonds. Again, all of it is in Vanguard’s indexed funds.

I know I should not take advise from relatives or the popular press, but both my brother in law and today’s New York Times (The Big, Dangerous Bubble in Corporate Debt) have me worried that this may not be the time to reallocate to bonds as the best way of reducing our risk if there is a downturn.

Any advice?

bampf
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Re: Preparing for a bear market

Post by bampf » Sat Aug 11, 2018 3:06 am

What's the alternative? Cash in a box at the foot of your bed? Wumpum? IF you aren't happy with equities because of the risk and you are not happy with bonds because of the risk, you have very few investment vehicles. Cash. CDs. Real Estate (lot of work right there). Suppose you could buy gold from pawn shops, but, that takes a lot of time and a fire melts it all. No advice except figure out what you need, set it aside in as safe a vehicle as you can find and sleep well at night. Don't read the financial press maybe so much?

zuma
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Re: Preparing for a bear market

Post by zuma » Sat Aug 11, 2018 3:18 am

Dalelatham wrote:
Sat Aug 11, 2018 2:43 am
I know I should not take advise from relatives or the popular press [...]
I think you answered your own question.

50/50 sounds like a reasonable AA for you.

Ignore the noise, don't overthink it, etc.

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celia
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Re: Preparing for a bear market

Post by celia » Sat Aug 11, 2018 4:13 am

Dalelatham wrote:
Sat Aug 11, 2018 2:43 am
I know I should not take advise from relatives or the popular press, but both my brother in law and today’s New York Times (The Big, Dangerous Bubble in Corporate Debt) have me worried that this may not be the time to reallocate to bonds as the best way of reducing our risk if there is a downturn.

Any advice?
You know you shouldn't take advice from relatives or the press, yet you want advice from strangers on the internet? :oops:

Chip
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Re: Preparing for a bear market

Post by Chip » Sat Aug 11, 2018 4:38 am

You shouldn't make any changes due to "preparing for a bear market". No one knows when it will come.

But reasonable allocation change reasons include:
1. I'm uncomfortable with the risk in my portfolio.
2. I don't need to take as much risk to meet my goals.

You have enough money and you're worried about risk. So 1 and 2 fit. 50/50 is a perfectly reasonable allocation at age 65.

Buy Treasuries if you don't want the risk of corporate debt.

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camillus
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Re: Preparing for a bear market

Post by camillus » Sat Aug 11, 2018 4:43 am

Some other meaningful alternatives to stocks & bonds are real estate and perhaps an annuity.

Some might point out that you are trying to time the market, others might applaud you for finding a more reasonable asset allocation (to you).

You seem though to be making an increasing number of changes because you are anxious, and so you are very vulnerable to behavioral mal-effect on your nest egg.

basspond
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Re: Preparing for a bear market

Post by basspond » Sat Aug 11, 2018 5:56 am

Why would it be any different now then when you lived through Black Monday in 87, dot com bubble in 2000, and 2008? Only thing is to have enough investments in stable funds to live off for at least four years.

sambb
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Re: Preparing for a bear market

Post by sambb » Sat Aug 11, 2018 5:58 am

if worried, lower expenses and work lomger

selters
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Re: Preparing for a bear market

Post by selters » Sat Aug 11, 2018 6:00 am

Nothing wrong with reducing your allocation to stocks once you've reached your goals and "won the game." But it should be a permanent change. You should not reduce your allocation to stocks with the intention of raising it again once there is a correction.

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backofbeyond
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Re: Preparing for a bear market

Post by backofbeyond » Sat Aug 11, 2018 6:37 am

Back in 2000 or so, my father was about your age and he wanted my advice because he too was concerned about a deep recession. He had substantial real estate assets but was afraid of the stock market. I was his Trustee on his Trust and having earned advanced degrees in Finance and MBA, he thought maybe I knew something about the economy. I suggest I bonds. We ended up putting the max we could in each year.

I then was stationed overseas. And our conversation on the phone rarely brought up his assets and why should they, it was in a very safe basket.

Imagine my surprise when I came back after 5 years overseas to find that he had sold all of his I bonds because my brother (who had gone bankrupt 3 times) told him the Federal Gov't was going broke. So he literally had many thousands of dollars hidden under his mattress.

As we grow older, we normally grow more conservative but some become paranoid (not saying you are, but I seem to have that in my genes), So at age 65, I plan on putting it on auto...60/40 and let her ride. With strict instructions to my Trustee not to make changes, let the chips fall where they may.
The question isn't at what age I want to retire, it is at what income. - George Foreman

Call_Me_Op
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Re: Preparing for a bear market

Post by Call_Me_Op » Sat Aug 11, 2018 6:46 am

My concern is if your brother in-law can influence your thinking on bonds, perhaps you do not understand them well enough. One should not invest in things they do not understand reasonably well. So I recommend improving your understanding of bonds before doing anything further.
Best regards, -Op | | "In the middle of difficulty lies opportunity." Einstein

amitb00
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Re: Preparing for a bear market

Post by amitb00 » Sat Aug 11, 2018 6:57 am

If you don’t like bonds, CDs may be a good substitute

indexonlyplease
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Re: Preparing for a bear market

Post by indexonlyplease » Sat Aug 11, 2018 7:07 am

Question: Does pension and SS take care of the monthly bills? If yes, then it does not matter what your AA is because you can ride the market up and down. But why take the risk.

Lowering you AA is smart when in retirement. They call this winning the game so don't take extra risk.

I think you may be better off with a total bond fund than trying to pick individual bond funds. Who knows what is best.

The 800k in the house does not matter because it is where you live. Unless you plan on selling and down sizing to cheaper house.

So set your AA that covers expenses and then forget the rest. Also, make it as simple portfolio as you can.


This is what I did before I retired 2 years.

livesoft
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Re: Preparing for a bear market

Post by livesoft » Sat Aug 11, 2018 7:10 am

With annual expenses at 3% of investments, you are already overly prepared for a bear market for your ages. There is nothing else you need to do. There is really nothing else that you can do.
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beardsworth
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Re: Preparing for a bear market

Post by beardsworth » Sat Aug 11, 2018 7:24 am

Regarding the choice of vehicles within your fixed income allocation, you may also be interested in the following recent Bogleheads discussion on whether "Treasury Bonds are the only bonds you need."

viewtopic.php?t=255320

More generally, apply your knowledge of your circumstances, your investing personality, and your knowledge of the kinds of things which can go wrong in markets and the economy, and reduce your stock allocation until such possibillities no longer make you ill-at-ease. There's a reason it's called "the sleep-well point." :)
Last edited by beardsworth on Sat Aug 11, 2018 7:30 am, edited 1 time in total.

Grt2bOutdoors
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Re: Preparing for a bear market

Post by Grt2bOutdoors » Sat Aug 11, 2018 7:30 am

If you are truly concerned about corporate debt, why is 60% allocated to medium rated credit? No free lunch, if you want more yield you take more risk. If you want safety of principal, high quality- governmental or CDs.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

UpperNwGuy
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Re: Preparing for a bear market

Post by UpperNwGuy » Sat Aug 11, 2018 7:44 am

50/50 at the top level sounds simple enough, but all the splits within your asset classes sound too complicated for someone who worries about bear markets. Simplify.

Murgatroyd
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Re: Preparing for a bear market

Post by Murgatroyd » Sat Aug 11, 2018 7:55 am

One thing with the potential to ease (or perhaps aggravate) your mind is knowing how much of your 3% withdrawal is provided by dividends and interest. Let’s say the 3% is $20,000 annually. If you find that 3/4 of that is actually coming from d/i, then even in a market downturn, in which some dividends may be cut, your exposure to selling equity or spending less would be reasonably identifiable.

What I am saying is that even though your total account balance goes down your risk should be a much smaller number.

pkcrafter
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Re: Preparing for a bear market

Post by pkcrafter » Sat Aug 11, 2018 8:50 am

Dalelatham wrote:
Sat Aug 11, 2018 2:43 am

Until a month ago, we were comfortable maintaining a 70/30 mix between stock and bond index funds. But we are increasingly concerned that there may be a recession in the next three years and it seems like we are taking more risk than needed. For that reason, we recently reallocated to a 50/50 mix.

That was a good move.

Our bond portfolio is now 66/34% domestic/international bonds, 76/24% intermediate term/short term bonds, and 40/60% high/medium credit quality bonds. Again, all of it is in Vanguard’s indexed funds.

Please post the bond funds you are holding.

I know I should not take advise from relatives or the popular press, but...

Here's the NYTImes article, which was designed to stir the pot and generate increased readership.

https://www.nytimes.com/2018/08/09/opin ... ssion.html

Any advice?

Yeah, You seem to know you don't listen to this kind of noise. There is no "but..." Continue with you solid plan.

Paul

When times are good, investors tend to forget about risk and focus on opportunity. When times are bad, investors tend to forget about opportunity and focus on risk.

carolinaman
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Re: Preparing for a bear market

Post by carolinaman » Sat Aug 11, 2018 9:10 am

50/50 sounds good for you, but you could go to an even more conservative AA, say 40/60, if that makes you more comfortable. That is still higher equity than age in bonds.

The most actionable thing I see is to increase the quality of your bonds: more high quality intermediate, less medium quality. Also, the value of international bonds in AA is debatable and is clearly more risky than domestic of like quality. This should help allay your concerns about bonds.

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welderwannabe
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Re: Preparing for a bear market

Post by welderwannabe » Sat Aug 11, 2018 9:56 am

Chip wrote:
Sat Aug 11, 2018 4:38 am
Buy Treasuries if you don't want the risk of corporate debt.
+1

If you are worried about credit risk for corporates (and I believe guys like Larry Swedroe agree with you) use:

Maybe use Vanguard Intermediate-Term Treasury Index Fund Admiral Shares VSIGX.

For your short term Vanguard Short-Term Investment-Grade Fund Admiral Shares VFSUX.

VFSUX has corporates, but they are all short term alleviating some of the credit risk due to the short term nature.
I am not an investment professional, but I did stay at a Holiday Inn Express last night.

gmaynardkrebs
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Re: Preparing for a bear market

Post by gmaynardkrebs » Sat Aug 11, 2018 10:09 am

we have income from an inflation indexed pension
If this means CSRS or FERS, what about the G-Fund for your bond allocation?

3funder
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Re: Preparing for a bear market

Post by 3funder » Sat Aug 11, 2018 10:10 am

selters wrote:
Sat Aug 11, 2018 6:00 am
Nothing wrong with reducing your allocation to stocks once you've reached your goals and "won the game." But it should be a permanent change. You should not reduce your allocation to stocks with the intention of raising it again once there is a correction.
+1.

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dwickenh
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Re: Preparing for a bear market

Post by dwickenh » Sat Aug 11, 2018 10:40 am

At 50/50 you will be either half right or half wrong. I am comfortable with that as I am also 50/50 and sleeping well. There are a lot less ups and downs, just steady and slow movement that should take care of the 3% withdrawal rate.

Congrats on your decision to sleep better.

Dan
The market is the most efficient mechanism anywhere in the world for transferring wealth from impatient people to patient people.” | — Warren Buffett

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sperry8
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Re: Preparing for a bear market

Post by sperry8 » Sat Aug 11, 2018 10:47 am

Dalelatham wrote:
Sat Aug 11, 2018 2:43 am
My wife and I retired nine years ago and are now 65. Our financial investments are all in a diversified portfolio of Vanguard index funds. In addition, we have income from an inflation indexed pension and social security plus about $800,000 equity in our house. Until recently we were firm believers in riding out any downturns and did so during the 2008 meltdown without selling any stock funds. I do a financial checkup with Vanguard every year and we are able to easily keep our annual expenses at about 3% of our investments, giving us a 95% chance of ensuring our assets won’t be exhausted before we die.

Until a month ago, we were comfortable maintaining a 70/30 mix between stock and bond index funds. But we are increasingly concerned that there may be a recession in the next three years and it seems like we are taking more risk than needed. For that reason, we recently reallocated to a 50/50 mix. Our bond portfolio is now 66/34% domestic/international bonds, 76/24% intermediate term/short term bonds, and 40/60% high/medium credit quality bonds. Again, all of it is in Vanguard’s indexed funds.

I know I should not take advise from relatives or the popular press, but both my brother in law and today’s New York Times (The Big, Dangerous Bubble in Corporate Debt) have me worried that this may not be the time to reallocate to bonds as the best way of reducing our risk if there is a downturn.

Any advice?
You may be worried about US Bonds. Perhaps a diversified Total World Bond Index is more to your liking/risk tolerance?
Humbling BH contest results: 2017: #516 of 647 | 2016: #121 of 610 | 2015: #18 of 552 | 2014: #225 of 503 | 2013: #383 of 433 | 2012: #366 of 410 | 2011: #113 of 369 | 2010: #53 of 282

gmaynardkrebs
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Re: Preparing for a bear market

Post by gmaynardkrebs » Sat Aug 11, 2018 10:48 am

3funder wrote:
Sat Aug 11, 2018 10:10 am
selters wrote:
Sat Aug 11, 2018 6:00 am
Nothing wrong with reducing your allocation to stocks once you've reached your goals and "won the game." But it should be a permanent change. You should not reduce your allocation to stocks with the intention of raising it again once there is a correction.
+1.
I view it the opposite. Once you've "won the game" is the precisely time when you can and should raise raise your allocation to stocks after a significant correction, when valuations are low, and you can afford to take risk. Just never risk enough to "unwin the game" if things go the wrong way.

Dottie57
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Re: Preparing for a bear market

Post by Dottie57 » Sat Aug 11, 2018 11:23 am

zuma wrote:
Sat Aug 11, 2018 3:18 am
Dalelatham wrote:
Sat Aug 11, 2018 2:43 am
I know I should not take advise from relatives or the popular press [...]
I think you answered your own question.

50/50 sounds like a reasonable AA for you.

Ignore the noise, don't overthink it, etc.
I am 61 and retired this year. I am at 50/50 allocation of stock/ fixed income. I want stocks for future growth. Bonds for safety. Fixed income jas a good chunk in bank products equivalentto cash. SS at 69 or 70.

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arcticpineapplecorp.
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Re: Preparing for a bear market

Post by arcticpineapplecorp. » Sat Aug 11, 2018 11:35 am

Dalelatham wrote:
Sat Aug 11, 2018 2:43 am
I know I should not take advise from relatives or the popular press, but both my brother in law and today’s New York Times (The Big, Dangerous Bubble in Corporate Debt) have me worried that this may not be the time to reallocate to bonds as the best way of reducing our risk if there is a downturn.

Any advice?
Welcome to the group.

A few things:
1. "nobody knows nuthin"--Jack Bogle. Plenty of examples abound. I'll give you one (or two): look at the stock market performance (U.S., Europe and Asia) the day (or two) after the Brexit vote. Then look at where the markets were one week later. Then several months later. Then a year later. Paul Samuelson said "The stock market has predicted 9 of the last 5 recessions". Think about that for a while.

2. “Those who have knowledge don’t predict, and those who predict don’t have knowledge”--Lao Tzu

3. “It is very hard to predict, especially the future." - old Danish Proverb and associated with Niels Bohr

How about looking at the last big downturn we had? The U.S. stock market fell 55% between 10/12/07 and 3/6/09, while the total bond market index fund was UP 7.56% (chart below, blue line is the U.S. stock market and orange line is the U.S. bond market). I'm not saying this will happen exactly this way in the future ("History doesn't repeat itself but it often rhymes"--attributed to Mark Twain) but high quality short to intermediate bonds should provide stability when downturns occur. What do you think?

Image

source:
https://quotes.morningstar.com/chart/fu ... A%5B%5D%7D
Last edited by arcticpineapplecorp. on Sat Aug 11, 2018 11:48 am, edited 3 times in total.
"Invest we must." -- Jack Bogle | “The purpose of investing is not to simply optimise returns and make yourself rich. The purpose is not to die poor.” -- William Bernstein

2015
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Re: Preparing for a bear market

Post by 2015 » Sat Aug 11, 2018 11:41 am

if you haven't taken the time to study the behavioral aspects of investing and your own mind, it doesn't matter what your AA is, you virtually guaranteed to do something counterproductive during the next bear market. This is one prediction that can be made with absolute certainty. Go back and read the 08/09 threads here to see how the mentally unprepared fared.

The most cleverly designed portfolio is no match for the person staring back at you in the mirror.

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Toons
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Re: Preparing for a bear market

Post by Toons » Sat Aug 11, 2018 11:49 am

No One knows what the future of the financial markets holds.
Find your sleep well asset allocation point and ,,,,
Sleep Well.

:mrgreen:
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee

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munemaker
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Re: Preparing for a bear market

Post by munemaker » Sat Aug 11, 2018 11:54 am

If you do a checkup with Vanguard every year and follow their advice, I am sure you will be fine.

However, I doubt they would be advising you to shift your assets around based on what you think could happen in the market.

Also, your portfolio was at 70% equities which seems to be out of line with your risk tolerance.

delamer
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Re: Preparing for a bear market

Post by delamer » Sat Aug 11, 2018 12:04 pm

Rather than increase your bond holdings (especially if corporate debt is your concern), maybe a cushion of 3 to 4 years of expenses in cash instead?


MotoTrojan
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Re: Preparing for a bear market

Post by MotoTrojan » Sat Aug 11, 2018 12:21 pm

livesoft wrote:
Sat Aug 11, 2018 7:10 am
With annual expenses at 3% of investments, you are already overly prepared for a bear market for your ages. There is nothing else you need to do. There is really nothing else that you can do.
+1. I’d stay around 60/40.

Where did you see 3% pretax being a 95% success rate? Most consider even 3.33% to be perpetually safe. I guess longterm medical cost risk?

beardsworth
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Re: Preparing for a bear market

Post by beardsworth » Sat Aug 11, 2018 12:31 pm

2015 wrote: . . . Go back and read the 08/09 threads here to see how the mentally unprepared fared.
The following thread occurred some time after the crisis of 2008-2009, during another period of market turbulence, but is one of the best things I've seen on the subject of "evaluating your jitters," and typical of the intelligence this forum has come to expect from just about every discussion initiated by the poster nisiprius.

viewtopic.php?t=79939

2015 wrote:The most cleverly designed portfolio is no match for the person staring back at you in the mirror.
That statement could be interpreted in more than one way :) , but one of the ways is this: Regardless of what advice anyone else may give, the OP has the unique advantage of being the world's #1 expert on the finances, goals, risk tolerance, and sleeping requirements of Dalelatham.

gmaynardkrebs
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Re: Preparing for a bear market

Post by gmaynardkrebs » Sat Aug 11, 2018 12:42 pm

Dalelatham wrote:
Sat Aug 11, 2018 2:43 am
... today’s New York Times (The Big, Dangerous Bubble in Corporate Debt) have me worried that this may not be the time to reallocate to bonds as the best way of reducing our risk if there is a downturn. Any advice?
However dangerous the alleged bubble in corporate debt, the danger to equity holders is greater. Bondholders are paid first. The most effective way to reduce risk is to lower your equity exposure.

rgs92
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Re: Preparing for a bear market

Post by rgs92 » Sat Aug 11, 2018 12:55 pm

Even a substantial bubble in corporate debt does not matter much at all because this is in the bond market, the investment-grade bond market.
All but high-yield bonds are not a particularly volatile asset class per se, so this will be a minor fluctuation at the most to your total portfolio.
So if this is what is causing you to worry, it should not.

2015
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Re: Preparing for a bear market

Post by 2015 » Sat Aug 11, 2018 7:14 pm

beardsworth wrote:
Sat Aug 11, 2018 12:31 pm
2015 wrote:

2015 wrote:The most cleverly designed portfolio is no match for the person staring back at you in the mirror.
That statement could be interpreted in more than one way :) , but one of the ways is this: Regardless of what advice anyone else may give, the OP has the unique advantage of being the world's #1 expert on the finances, goals, risk tolerance, and sleeping requirements of Dalelatham.
Very well put.

Investing, similar to what has been described in game theory, is replete with smart, highly competent individuals all operating in a system where any analytical "edge" is soon duplicated and depleted (for the majority of investors, including everyone here). Nevertheless, in investing, the playing field for a behavioral edge is wide open. To paraphrase Wayne Gretsky, the investing "puck" is submersed in lots of action due to the human propensity to always "do something". Therefore, skating to where the investing puck is not; that is, engaging in the least activity possible to accomplish investing goals, is where the true edge lies. To do this, one must know one's own mind, be keenly aware of where one's circle of investing competence ends, and develop a high degree of intrapersonal intelligence. No spreadsheet, chart, or graph will ever give you that.

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GoldStar
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Re: Preparing for a bear market

Post by GoldStar » Sat Aug 11, 2018 7:22 pm

Since you pay attention to the media hype and worry about it 70/30 was provbably too risky for you and 50/50 is probabably better. Although personally I see no signs of a recession with the economy booming, unemployment low, best business growth environment in decades, etc. NYTs has turned into an alarmist paper so read with a grain of salt.
You can mix in some CDs with your bonds.

gmaynardkrebs
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Re: Preparing for a bear market

Post by gmaynardkrebs » Sat Aug 11, 2018 7:53 pm

GoldStar wrote:
Sat Aug 11, 2018 7:22 pm
Since you pay attention to the media hype and worry about it 70/30 was provbably too risky for you and 50/50 is probabably better. Although personally I see no signs of a recession with the economy booming, unemployment low, best business growth environment in decades, etc. ...
The overwhelming driver of stock market returns for the last two decades has been P/E expansion as opposed to the economic factors you cite. Things look good now, but things always look good at the top.

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celia
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Re: Preparing for a bear market

Post by celia » Sat Aug 11, 2018 10:59 pm

You might be interested in a recent blog post by Vanguard:

Why it's so hard to predict the next bear market.

looking
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Re: Preparing for a bear market

Post by looking » Sun Aug 12, 2018 12:47 am

Dalelatham wrote:
Sat Aug 11, 2018 2:43 am
My wife and I retired nine years ago and are now 65. Our financial investments are all in a diversified portfolio of Vanguard index funds. In addition, we have income from an inflation indexed pension and social security plus about $800,000 equity in our house. Until recently we were firm believers in riding out any downturns and did so during the 2008 meltdown without selling any stock funds. I do a financial checkup with Vanguard every year and we are able to easily keep our annual expenses at about 3% of our investments, giving us a 95% chance of ensuring our assets won’t be exhausted before we die.

Until a month ago, we were comfortable maintaining a 70/30 mix between stock and bond index funds. But we are increasingly concerned that there may be a recession in the next three years and it seems like we are taking more risk than needed. For that reason, we recently reallocated to a 50/50 mix. Our bond portfolio is now 66/34% domestic/international bonds, 76/24% intermediate term/short term bonds, and 40/60% high/medium credit quality bonds. Again, all of it is in Vanguard’s indexed funds.

I know I should not take advise from relatives or the popular press, but both my brother in law and today’s New York Times (The Big, Dangerous Bubble in Corporate Debt) have me worried that this may not be the time to reallocate to bonds as the best way of reducing our risk if there is a downturn.

Any advice?
bear market

just normal bear comes and goes so AA with portfolio just ride out

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GoldStar
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Re: Preparing for a bear market

Post by GoldStar » Sun Aug 12, 2018 8:45 am

gmaynardkrebs wrote:
Sat Aug 11, 2018 7:53 pm
GoldStar wrote:
Sat Aug 11, 2018 7:22 pm
Since you pay attention to the media hype and worry about it 70/30 was provbably too risky for you and 50/50 is probabably better. Although personally I see no signs of a recession with the economy booming, unemployment low, best business growth environment in decades, etc. ...
The overwhelming driver of stock market returns for the last two decades has been P/E expansion as opposed to the economic factors you cite. Things look good now, but things always look good at the top.
I wasn't talking about stock market returns but recession indicators.

gmaynardkrebs
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Re: Preparing for a bear market

Post by gmaynardkrebs » Sun Aug 12, 2018 10:30 am

GoldStar wrote:
Sun Aug 12, 2018 8:45 am
gmaynardkrebs wrote:
Sat Aug 11, 2018 7:53 pm
GoldStar wrote:
Sat Aug 11, 2018 7:22 pm
Since you pay attention to the media hype and worry about it 70/30 was provbably too risky for you and 50/50 is probabably better. Although personally I see no signs of a recession with the economy booming, unemployment low, best business growth environment in decades, etc. ...
The overwhelming driver of stock market returns for the last two decades has been P/E expansion as opposed to the economic factors you cite. Things look good now, but things always look good at the top.
I wasn't talking about stock market returns but recession indicators.
Okay, sorry, I thought you meant they were a precursor to the stock market going down. Of course, sometimes they are, but not nearly as big a factor as I used to think.

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