Where to invest now ?

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Rajsx
Posts: 355
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Location: Florida

Where to invest now ?

Post by Rajsx » Mon Jan 08, 2018 4:18 pm

Since we sold our prior house last year, almost $ 200K have been sitting in an online bank earning 1.5% with decision paralysis. I have no idea what to invest in ? Let me explain.......,

I am 61, retired now with AA now of 43/57 Stock/Bond%, I have rebalanced regularly in the last few years from the Stock Funds into Bond Funds, landing short Term Bond funds in Taxable as there is no Tax Deferred space available. Unless we buy Annuities, there are no future chances of Tax deferred investing, as there is no earned income anymore.

Several years back I would have sworn not to go below 50% Stocks, but have been ratcheting down the stock % from 75% down to present 43%.
The Investment Statement calls for steady conservative Index Fund Portfolio with 40 to 50% investment portfolio in Stock Funds, as the 2008 market gyrations did make me uncomfortable although not to the point of selling anything major but a tiny portion of about 2% of Stock Portfolio on a bad Market day of S&P(or was it the DOW, I forget) going down 200 points or so.

The investments have done very well as everyone else's have in the last 10 years, we live comfortably with 90 to 100% chances of maintaining our lifestyle till age 90 in Fidelity, Firecalc & other Retirement Calculators.

Long story short, do not know if I want to buy a Bond Fund now, as the prices of bonds are going down as their yields go up, have invested in multiple CDS recently, have gifted some to kids & grand kids, made some capital investments to the now downsized house, the intense noise about the Stocks going down (or correction coming any day) has been going on in my mind.
Something on the lines of when the game is won, why play anymore.

Earlier while working, monthly automatic transfers built the present portfolio, never had a lump sum money sitting in the Bank like the present scenario. Maybe I should just start dollar cost averaging every month from now on in the same proportion of the Asset Allocation. Maybe too much time to think and overthink during retirement is building up this decision paralysis.

I know it is good problem to have, but at the same time do not feel good about the money not doing anything sitting in the Bank & the market has gone up a lot since.

I am sorry for the long post, but I need a little help, a few pointers, or how are others in the accumulation phase handling this , are you still investing in the stocks regularly.

Thank & regards to all
We do not stop laughing because we grow old, we grow old because we stop laughing !!

WhiteMaxima
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Re: Where to invest now ?

Post by WhiteMaxima » Mon Jan 08, 2018 4:26 pm

FDIC insured CDs.

SimplicityNow
Posts: 463
Joined: Fri Aug 05, 2016 10:31 am

Re: Where to invest now ?

Post by SimplicityNow » Mon Jan 08, 2018 8:59 pm

If you are comfortable at your present asset allocation, purchasing 200k worth of CDs may tit that allocation, perhaps a lot depending on the total value of your portfolio.

We really do not have sufficient information regarding your expenses and portfolio size to make any knowledgeable recommendations.

To me, and I could be wrong, it sounds like even at 43/57 you have some trepidation. If this is based on your lack of need, ability and willingness to take risk, perhaps you should revisit your IPS and make it more conservative.

In any event, once you determine what your asset allocation should be, just invest the sum. If you want to avoid bonds you can use CD's or short term bonds if that makes you sleep better at night.

Best of luck.

Bwlonge
Posts: 129
Joined: Wed Nov 22, 2017 6:36 am

Re: Where to invest now ?

Post by Bwlonge » Mon Jan 08, 2018 9:09 pm

I got a bridge to sell ya, you'll love it.

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whodidntante
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Re: Where to invest now ?

Post by whodidntante » Mon Jan 08, 2018 9:15 pm

I don't know. Decide what you want your AA to be and invest it according to that. It sounds like your desired asset allocation does not include 200k in cash.

There is nothing wrong with buying CDs or individual treasury bonds held to maturity if you are concerned about losses in bond funds. It's more work to manage that and get close to optimal returns out of it, but it's sound. Since we are in a rising rate environment right now, it would make sense to periodically do the math to see if breaking CDs early to reinvest at a higher would be profitable and worth the trouble.

itstoomuch
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Location: midValley OR

Re: Where to invest now ?

Post by itstoomuch » Mon Jan 08, 2018 9:22 pm

Don't know either.
BTDT in 2017. We did buy a condo in 2017. And sold property in 2018. Looking at 1031 possibilities so we are holding considerable cash at the title/escrow company at cash returns.
TipToe thru the tulips for my Discretionary account.
Rev012718; 4 Incm stream buckets: SS+pension; dfr'd GLWB VA & FI anntys, by time & $$ laddered; Discretionary; Rentals. LTCi. Own, not asset. Tax TBT%. Early SS. FundRatio (FR) >1.1 67/70yo

mortfree
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Re: Where to invest now ?

Post by mortfree » Mon Jan 08, 2018 9:24 pm

Wellesley VWIAX

Rajsx
Posts: 355
Joined: Wed Mar 21, 2007 10:07 pm
Location: Florida

Re: Where to invest now ?

Post by Rajsx » Tue Jan 09, 2018 10:39 am

Thanks for your opinions,

- Wellesley VWIAX - is a good fund, good track record, at present most(90%) of my investments are in INDEX FUNDS, VWIAX has something like 60% in Bonds, I do not know(yet) what is the duration of those Bond Funds. Apart from Short Term Corporate Bonds & also Short Term Index Funds, keeping a intermediate Bond Fund in taxable has its inefficiencies, most of my Taxable portfolio is in Total Stock Market Index Adm. I have to think about it.
I may as well invest in 60% short term Bonds & 40% in Total stock Market. Thanks anyway.

- CDs are a good way for non committal investment and wait & see what & where about this market, essentially be on the wall & wait sort of thing, that is essentially what I am doing at present for nearly a year , have a lot in CDs & online savings (albeit at lower basis points)

- Our investments total around 5 mil. including Taxable & Tax deferred accounts, all at Vanguard, at 43% Stock & 57% allocation. Our Expenses are around $ 160K/yr, with a son at home waiting for his re launch .

Welcome your suggestions
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livesoft
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Re: Where to invest now ?

Post by livesoft » Tue Jan 09, 2018 10:43 am

So your AA is 43/57 now. Does that put the $200K cash in the 57% like it should? You want stocks to be 40% to 50%.

Thus, it doesn't matter what you do: You can put the $200K into stocks, bonds, CDs, or a savings account and you will still have stocks as 40% to 50%.

You can even do some of each.

Wellesley is not a particularly good answer in that it is just hiding things from you inside a balanced fund. But if it makes you feel good, then that's OK, too.

Whatever you do, I would suggest being very very tax-efficient about it and any future gains and losses.
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Rajsx
Posts: 355
Joined: Wed Mar 21, 2007 10:07 pm
Location: Florida

Re: Where to invest now ?

Post by Rajsx » Tue Jan 09, 2018 11:27 am

Another related question, please advise

What are Bogleheads suggested as a general guide(I know not set in stone) for Asset Allocation, I am 61

- Is it 110 - Age in Stocks ? In my case this Stocks come to 50%
OR
-Is it Age in Bonds ? in my case Stocks will be 40%

Thanks
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livesoft
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Re: Where to invest now ?

Post by livesoft » Tue Jan 09, 2018 11:29 am

It has little to do with age. It might be start at 60% equities and increase to 80% or even 100% by age 100.
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Alexa9
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Re: Where to invest now ?

Post by Alexa9 » Tue Jan 09, 2018 11:33 am

For a 60 year old I like:
40% Stocks: Total Stock Market, International, Small Cap Value, and International Small Cap
60% Bonds: Total Bond Market, Total International Bond Market, CD Ladder
I'm not a fan of TIPS (poor performance) or REITs(already in TSM)

rgs92
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Re: Where to invest now ?

Post by rgs92 » Tue Jan 09, 2018 11:46 am

At the risk of being accused of market timing, just to answer the question directly, Utilities, REITs, and real estate funds (like IYR [Ishares Real Estate ETF] have not had a huge run-up, have nice yields for income, and are a contrarian bet. They may have intrinsically lower volatility than the broad stock market. I will also toss in the Preferred Stock market, like PFF (Ishares US preferred etf index).

Rajsx
Posts: 355
Joined: Wed Mar 21, 2007 10:07 pm
Location: Florida

Re: Where to invest now ?

Post by Rajsx » Tue Jan 09, 2018 1:00 pm

Livesoft ! Congratulations on 58000 + Posts on this Forum
We do not stop laughing because we grow old, we grow old because we stop laughing !!

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