Am I being greedy?

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InvestorNewb
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Am I being greedy?

Post by InvestorNewb » Mon Jan 22, 2018 4:34 pm

I have more than doubled my investments since I started investing in 2012. It is all thanks to this forum and my own dumb luck of getting in at the right time. The risk of being 100% invested in stocks has paid off well. With that said, I can't help but always wanting to reach the next milestone. I have a sense that this "want" will never go away and that it will keep me invested in stocks for as long as I keep seeing the balance go up.

I've told some of my family members and they think I'm crazy for not taking some off the table and putting the money to good use. I'm a renter in my mid 30s and I do not own any physical assets apart from my 10 year-old car. I live in a tiny apartment that I don't mind, but having some more space would be nice. Family members think I'm cheap given my situation.

My plan is to get to $2M and then re-evaluate. I need another 77.78% to reach that number. It doesn't seem that far away if this bull market continues for another 3-4 years.

Are there any other 100% stock investors who decide on reaching a number and then re-formulate their plan when the target is reached? I know this isn't the status quo way of investing, but I am enjoying the ride too much right now to get off of it. I'm in the front seat with a big smile on my face.
My Portfolio: VTI [US], VXUS [Int'l], VNQ [REIT], VCN [Canada] (largest to smallest)

H-Town
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Re: Am I being greedy?

Post by H-Town » Mon Jan 22, 2018 4:37 pm

If you can stomach a 50-80% drop in value, you're not too greedy. Remember that you're your own worst enemy when it comes to wealth management.
Last edited by H-Town on Mon Jan 22, 2018 4:45 pm, edited 1 time in total.

minimalistmarc
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Re: Am I being greedy?

Post by minimalistmarc » Mon Jan 22, 2018 4:39 pm

thangngo wrote:
Mon Jan 22, 2018 4:37 pm
If you can stomach a 50-80% drop in value, you're not too greedy. Remember that you're the worst enemy when it comes to wealth management.
80% that's nothing, I can stomach a 99.99% drop!

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bengal22
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Re: Am I being greedy?

Post by bengal22 » Mon Jan 22, 2018 4:41 pm

Mid-30's. Go for it. Just don't panic when the correction comes. And it will. I for one played it a little safer.
"Earn All You Can; Give All You Can; Save All You Can." .... John Wesley

N10sive
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Re: Am I being greedy?

Post by N10sive » Mon Jan 22, 2018 4:42 pm

If you can stomach it why not? However, while I cant find the link, Vanguard has a historical analysis of stocks/bonds allocations. I switched to 80/20 once I read through that as the benefit of being 100% isn't much better than an 80/20 allocation but offers the safety of the bond allocation. I'm 31.

indexonlyplease
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Re: Am I being greedy?

Post by indexonlyplease » Mon Jan 22, 2018 4:42 pm

I think we all wish we knew that answer.

I was 100% stocks up until 3 years ago. Then I found this site and changed my AA and now have fixed income. I was only 100% stock because I did not know any better and did not know anything about fixed income except for what a cd was. And I wanted no part of cds. Now my thinking is different because of this site.
Last edited by indexonlyplease on Mon Jan 22, 2018 4:43 pm, edited 1 time in total.

Grt2bOutdoors
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Re: Am I being greedy?

Post by Grt2bOutdoors » Mon Jan 22, 2018 4:43 pm

minimalistmarc wrote:
Mon Jan 22, 2018 4:39 pm
thangngo wrote:
Mon Jan 22, 2018 4:37 pm
If you can stomach a 50-80% drop in value, you're not too greedy. Remember that you're the worst enemy when it comes to wealth management.
80% that's nothing, I can stomach a 99.99% drop!
And the last time you did was when and what proportion of your assets declined by 99.9% in value?
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

indexonlyplease
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Re: Am I being greedy?

Post by indexonlyplease » Mon Jan 22, 2018 4:44 pm

Grt2bOutdoors wrote:
Mon Jan 22, 2018 4:43 pm
minimalistmarc wrote:
Mon Jan 22, 2018 4:39 pm
thangngo wrote:
Mon Jan 22, 2018 4:37 pm
If you can stomach a 50-80% drop in value, you're not too greedy. Remember that you're the worst enemy when it comes to wealth management.
80% that's nothing, I can stomach a 99.99% drop!
And the last time you did was when and what proportion of your assets declined by 99.9% in value?
anyone can stomach 99.9% of nothing.

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Meg77
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Re: Am I being greedy?

Post by Meg77 » Mon Jan 22, 2018 4:44 pm

If you're comfortable with 100% stocks, then you should stay the course indefinitely. But it will be difficult to know how comfortable you really are with that asset allocation until you encounter a downturn.

I was 100% stocks for the first 10+ years of my investing life. I was younger, I had high risk tolerance, I knew I didn't need the funds for decades, and I was adding way more to my balance each year than the market was returning anyway (adding new money to investments matters way more than asset allocation or even fees until you are well into the 6 figure portfolio range).

I only shifted my (our) asset allocation to 10% bonds in the last few years after getting married to a person 6 years older than I am. I am comfortable with this and will simply keep buying more when (not if) the stock market drops 20%. I bought throughout the 2008-2009 recession as well - eagerly in fact - so I have proven this to myself.

A few points:
-Yes, your "want" may never go away, at least until you reach financial independence. With every new milestone comes a new goal. That's the way it is with all things; it's human nature to a large degree. There's nothing inherently wrong with that though. It's how we make progress. It can be addicting to watch your net worth start to snowball. Just know there will always be ups and downs - don't get married to the number on the page today.

-Taking money off the table when times are good is a gambling mentality. Cash in some chips while you're up in hopes of investing on a dip - that's market timing. Bogleheads will always tell you to buy and hold. Buy, buy, buy, hold hold hold - until you retire of course and need to sell a bit each year to meet your needs. If you have another goal such as buying a home or paying off debt, then certainly you can and should sell some stock to make that goal a reality. But if you don't, then let it ride. You only get hurt on a roller coaster if you jump off.

-Whether you are cheap is another discussion. You may be, in which case you may or may not want to loosen up the purse strings. Your savings rate is one decision; your asset allocation is another.

-It's definitely appropriate to reevaluate your asset allocation when life changes. One change could be reaching "your number," whatever that may mean for you. Another could be getting married to someone with a different risk tolerance, reaching a certain age, or retiring.

Good luck to you!
"An investment in knowledge pays the best interest." - Benjamin Franklin

chicagoan23
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Re: Am I being greedy?

Post by chicagoan23 » Mon Jan 22, 2018 5:36 pm

InvestorNewb wrote:
Mon Jan 22, 2018 4:34 pm
I have more than doubled my investments since I started investing in 2012. It is all thanks to this forum and my own dumb luck of getting in at the right time. The risk of being 100% invested in stocks has paid off well. With that said, I can't help but always wanting to reach the next milestone. I have a sense that this "want" will never go away and that it will keep me invested in stocks for as long as I keep seeing the balance go up.

I've told some of my family members and they think I'm crazy for not taking some off the table and putting the money to good use. I'm a renter in my mid 30s and I do not own any physical assets apart from my 10 year-old car. I live in a tiny apartment that I don't mind, but having some more space would be nice. Family members think I'm cheap given my situation.

My plan is to get to $2M and then re-evaluate. I need another 77.78% to reach that number. It doesn't seem that far away if this bull market continues for another 3-4 years.

Are there any other 100% stock investors who decide on reaching a number and then re-formulate their plan when the target is reached? I know this isn't the status quo way of investing, but I am enjoying the ride too much right now to get off of it. I'm in the front seat with a big smile on my face.
It's all about your need and ability to take risk. You have the ability when the markets are performing well.....do you still have the need?

I like looking at portfolio theory analyses and realizing that the extra few points per year I may forego in the long run by shifting 20% to bonds can be pretty much offset by the partial retention of portfolio value that bonds provide during big stock market crashes.

At $1.1 million or so, would you rather grab an extra potential $20k to $30k per year expecting to ride out this bull market at 100% stocks vs going 80/20.....or potentially lose $350k in a 30% bear market drop vs. losing $220k in a 30% bear with an 80/20 allocation? If you have the need to maximize returns by staying at 100% risky assets then do it; if you no longer have that need to take maximum risk but instead would prefer to avoid the big loss, then I would shift into something a little less risky.

MotoTrojan
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Re: Am I being greedy?

Post by MotoTrojan » Mon Jan 22, 2018 5:41 pm

Need, willingness, and ability to take risk.

What are your needs? What growth do you need to meet your financial goals and how much time can that take?

I’d transition to 80/20 or even further, unless you NEED $10M to retire happy.

grettman
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Re: Am I being greedy?

Post by grettman » Mon Jan 22, 2018 5:51 pm

I am in a similar situation. I am over 90% equities. I have been aggressive for years.... I suffered the big paper losses of the .COM bust and in 2008.

I didn't blink.

Will you?

If not, then continue as you have. Your AA is a personal decision based on your goals and the level of risk you want to take.

For my kids 529s, I took a little off the top and put it into a "cash" account inside the 529 because one of my kids will need it in a few years.

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Pajamas
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Re: Am I being greedy?

Post by Pajamas » Mon Jan 22, 2018 5:53 pm

InvestorNewb wrote:
Mon Jan 22, 2018 4:34 pm
I have more than doubled my investments since I started investing in 2012. It is all thanks to this forum and my own dumb luck of getting in at the right time. The risk of being 100% invested in stocks has paid off well. With that said, I can't help but always wanting to reach the next milestone. I have a sense that this "want" will never go away and that it will keep me invested in stocks for as long as I keep seeing the balance go up.

I've told some of my family members and they think I'm crazy for not taking some off the table and putting the money to good use.
What better use for you personally is there than investing your money to ensure your future financial security?
I'm a renter in my mid 30s and I do not own any physical assets apart from my 10 year-old car. I live in a tiny apartment that I don't mind, but having some more space would be nice. Family members think I'm cheap given my situation.
Don't listen to other people or society telling you to spend more money and what to spend it on. Reconsider even discussing your finances with friends or family in the future. It's really none of their business and their judgmental comments are inappropriate but expected given that you choose to discuss your finances with them.
My plan is to get to $2M and then re-evaluate. I need another 77.78% to reach that number. It doesn't seem that far away if this bull market continues for another 3-4 years.
Bull markets don't last forever. The current one is already notable. You may feel differently after a bear market. On the other hand, you might not.
Are there any other 100% stock investors who decide on reaching a number and then re-formulate their plan when the target is reached? I know this isn't the status quo way of investing, but I am enjoying the ride too much right now to get off of it. I'm in the front seat with a big smile on my face.
I was in the same situation you are in when I was your age and for many years afterwards and still lean that way. When you are older and have enough to meet your needs, you might find that you just naturally feel differently. On the other hand, you might not. You don't have to worry about that now, but do acknowledge that your attitudes and feelings can and probably will change about many things.
Last edited by Pajamas on Mon Jan 22, 2018 6:04 pm, edited 1 time in total.

stocknoob4111
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Re: Am I being greedy?

Post by stocknoob4111 » Mon Jan 22, 2018 5:59 pm

N10sive wrote:
Mon Jan 22, 2018 4:42 pm
I switched to 80/20 once I read through that as the benefit of being 100% isn't much better than an 80/20 allocation but offers the safety of the bond allocation. I'm 31.
I read that too in many different places, that the long term returns after around 75/25 is marginally greater and not worth the higher risk profile.

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Watty
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Re: Am I being greedy?

Post by Watty » Mon Jan 22, 2018 6:11 pm

N10sive wrote:
Mon Jan 22, 2018 4:42 pm
If you can stomach it why not?
Because going 100% stocks compared to 80% only gains you about 0.7% (at least in the past) but it greatly reduces your portfolio volatility.

https://personal.vanguard.com/us/insigh ... llocations

Even if you can stomach the extra volatility there is a chance that something like a job layoff or disability will unexpectedly limit your ability wide market swings.

Rob Bertram
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Re: Am I being greedy?

Post by Rob Bertram » Mon Jan 22, 2018 6:19 pm

Greedy might be the wrong word. But you might be investing for the wrong reasons if you don't have a plan to take money off the table once you've hit a certain level. Though, I definitely agree with dialing the risk up to the max while in the accumulation phase.

I'm leveraged, so 240% equities here. (Also leveraged on bonds.) I definitely have a strategy for reducing risk once I hit my number. There is no point for taking risk if I don't need to. I'm not trying to be the richest guy in the graveyard.

TheAncientOne
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Re: Am I being greedy?

Post by TheAncientOne » Mon Jan 22, 2018 6:26 pm

The stock market does not know how much you "need" to make your goal. I'm a strong believer in heavy equity exposure when you're young as long as you can deal with the inevitable bear markets and have a job or career that will not be at risk when the next recession hits. If I were in your shoes, I'd probably downshift new money to a 60 or 70% equity investment just because the market has gone up so much recently, and I'd want to have cash available for what I would think is a not too distant downturn. Also, lots of folks think they can handle a downturn without fear but you don't know for sure until the bullets are flying.

Afty
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Re: Am I being greedy?

Post by Afty » Mon Jan 22, 2018 6:47 pm

Personally at your age I would hold at least some bonds. The ratio from TR2050 is a decent place to start -- it's currently 90/10 stocks/bonds. Personally I would be a bit more conservative and aim for 80/20, but your risk tolerance may be higher than mine.

delamer
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Re: Am I being greedy?

Post by delamer » Mon Jan 22, 2018 7:02 pm

Two things that you should recognize:

Neither you nor anyone else has any way of knowing when you will reach the $2 million mark. Your formulation of 3 to 4 years is pure speculation.

You have never experienced a significant downturn in your assets if you began investing in 2012. Therefore, you have no way of knowing how you’ll react when the inevitable downturn occurs.

Truthfully, I’d call you naive rather than greedy.

TG2
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Re: Am I being greedy?

Post by TG2 » Mon Jan 22, 2018 7:27 pm

I have been effectively 100% in stocks since I started in 1987, so I obviously don't have any problem with the concept. This statement though does give me pause:
With that said, I can't help but always wanting to reach the next milestone. I have a sense that this "want" will never go away and that it will keep me invested in stocks for as long as I keep seeing the balance go up.
That sounds more like a gambler than an investor. Or an addict, seeking the next "high."

If you are going to be 100% in stocks, it should be because you believe in the idea, that you have evaluated your risk, and that you are comfortable assuming it. I am. I have never taken a dime out of the market, though will have to begin next year. Even with a 60% market drop I will easily have enough to live on as I do currently. Absent such a drop I am on track to make more in retirement than I did while working. The difference with me, though, is that there is no need or excitement involved. There is no "number." I will note the passing of a milestone, but that's all, really. There is no emotion. I am ruled by the logic and the math over the long term.

I would be particularly concerned about the part where you say, "...as long as I keep seeing the balance go up." What are your plans when the balance goes down? It will absolutely happen at some point, and go down quite a bit. How will you handle that? I handled it in the past by staying invested and buying more. I am retired now so won't be buying, but I don't need to sell a lot either. What will you do?

BogleMelon
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Re: Am I being greedy?

Post by BogleMelon » Mon Jan 22, 2018 7:40 pm

I am not 100%, I am 85% in stocks and 38 years. I have setup my IPS so that I shift to more bonds at certain milestones and vise versa (market down = more stock allocation).
"One of the funny things about stock market, every time one is buying another is selling, and both think they are astute" - William Feather

dcw213
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Re: Am I being greedy?

Post by dcw213 » Mon Jan 22, 2018 7:46 pm

OP, I can't recall the specific timing but I remember several threads you created during relatively minor pullbacks in the market over the last 5 years where you seemed to be extremely anxious during the declines and came off as if the paper losses were taking a big toll on you.

Perhaps this was when you were just starting off and have gained a bit more experience and composure, but some of the things you wrote I recall sticking with me as someone who reacted to the highs and lows with great emotion (i.e. euphoria and fear).

I don't mean for this to be disparaging or negative, by all means it seems as if you are doing great so congratulations! Please take the comments seriously that you have to seriously soul search and consider how you would react to a 50% drop. It can and will likely happen at some point. If you think that will cause you to react emotionally (whether that means panic selling or entering a deep depression as your number slips out of reach) you should reconsider in my opinion.

In 2008 I had little invested but It was a lot to me at the time. I thought I knew what a bear market could be like, but realized I truly didn't. I felt stupid, taken advantage of by the system, many emotions that were not pleasant and it consumed me for a long time. It was a great learning experience in hindsight and I am much more appropriately allocated for my risk tolerance now.

Just thought I'd add my thoughts, but congrats on great progress to date.

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Noobvestor
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Re: Am I being greedy?

Post by Noobvestor » Mon Jan 22, 2018 7:49 pm

Fellow veteran noob here checking in. It's not an all-or-nothing proposition. You can establish a glide path that takes both age and distance to goal into account. For example, you might go to 20% bonds now, and 30% when you hit $X, then 40% when you hit $Y, etc...

As for physical assets: I don't think that really matters - what matters are safe assets, like bonds and cash. Finally,
InvestorNewb wrote:
Mon Jan 22, 2018 4:34 pm
My plan is to get to $2M and then re-evaluate. I need another 77.78% to reach that number. It doesn't seem that far away if this bull market continues for another 3-4 years.
This seems wildly optimistic to me. The bull run could on that far - anything's possible - but it doesn't seem very likely. Much more likely we'll see a crash or correction before it goes up 77% from here.
"In the absence of clarity, diversification is the only logical strategy" -= Larry Swedroe

cherijoh
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Re: Am I being greedy?

Post by cherijoh » Mon Jan 22, 2018 7:54 pm

minimalistmarc wrote:
Mon Jan 22, 2018 4:39 pm
thangngo wrote:
Mon Jan 22, 2018 4:37 pm
If you can stomach a 50-80% drop in value, you're not too greedy. Remember that you're the worst enemy when it comes to wealth management.
80% that's nothing, I can stomach a 99.99% drop!
An 80% drop means a 500% recovery to get back to where you started. (I couldn't tell if that was sarcasm or if you were math-challenged and don't understand how returns work).

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David Jay
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Re: Am I being greedy?

Post by David Jay » Mon Jan 22, 2018 7:59 pm

Like others, I was 100% stocks into my mid-50s. But you need a steel spine during the downturns that will come.
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius

TG2
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Re: Am I being greedy?

Post by TG2 » Mon Jan 22, 2018 8:08 pm

cherijoh wrote:
Mon Jan 22, 2018 7:54 pm
minimalistmarc wrote:
Mon Jan 22, 2018 4:39 pm
thangngo wrote:
Mon Jan 22, 2018 4:37 pm
If you can stomach a 50-80% drop in value, you're not too greedy. Remember that you're the worst enemy when it comes to wealth management.
80% that's nothing, I can stomach a 99.99% drop!
An 80% drop means a 500% recovery to get back to where you started. (I couldn't tell if that was sarcasm or if you were math-challenged and don't understand how returns work).
Technically it would require a 400% recovery, but I'm betting on sarcasm. :happy

cherijoh
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Re: Am I being greedy?

Post by cherijoh » Mon Jan 22, 2018 8:16 pm

delamer wrote:
Mon Jan 22, 2018 7:02 pm
Two things that you should recognize:

Neither you nor anyone else has any way of knowing when you will reach the $2 million mark. Your formulation of 3 to 4 years is pure speculation.

You have never experienced a significant downturn in your assets if you began investing in 2012. Therefore, you have no way of knowing how you’ll react when the inevitable downturn occurs.

Truthfully, I’d call you naive rather than greedy.
+1

Rather than setting potentially unrealistic goals for a portfolio size by a fixed date, IMO you should be setting goals to invest a specified % of your salary or a specified dollar amount per year. Those are achievable goals and will hopefully take the focus off needing to keep a risky portfolio in order to meet your goal.

Grt2bOutdoors
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Re: Am I being greedy?

Post by Grt2bOutdoors » Mon Jan 22, 2018 8:21 pm

You need a plan. Luck is not a plan. What is plan b if dumb luck does not strike twice?
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

TheHouse7
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Re: Am I being greedy?

Post by TheHouse7 » Mon Jan 22, 2018 8:25 pm

N10sive wrote:
Mon Jan 22, 2018 4:42 pm
If you can stomach it why not? However, while I cant find the link, Vanguard has a historical analysis of stocks/bonds allocations. I switched to 80/20 once I read through that as the benefit of being 100% isn't much better than an 80/20 allocation but offers the safety of the bond allocation. I'm 31.
+1 I'm 30
"PSX will always go up 20%, why invest in anything else?!" -Father-in-law early retired.

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randomizer
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Re: Am I being greedy?

Post by randomizer » Mon Jan 22, 2018 8:40 pm

I wouldn’t count on this bull lasting another 3 or 4 years.
87.5:12.5, EM tilt — HODL the course!

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tennisplyr
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Re: Am I being greedy?

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

Ahh the fear and greed in the market. When the drop came in 2008, I was happy I was @50/50 but then again I was in my fifties. You do have time on your side which many don't have.
Those who move forward with a happy spirit will find that things always work out.

J295
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Re: Am I being greedy?

Post by J295 » Mon Jan 22, 2018 9:34 pm

Op has been investing since 2012 .... It's been a pretty nice ride indeed .... like shooting fish i a barrel on the equity side.

I consider myself fairly experienced and seasoned to stress professionally, athletically, and investing wise. Have owned equities since 1979. I can still recall the strong negative feelings/stress around Black Monday (1987), the tech run up and then crash around 2000, and the harshness of 2007-2008. I'm more than willing to admit it was quite stressful for me.

To Op ... I have no idea what type of ride you may be in for if you are shooting for $2M at 100% equities; but be quite aware the big drops can come quickly and be followed by other large and prolonged drops.

Greed and fear are unwelcome traveling companions on our investing journey.

fmzip
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Re: Am I being greedy?

Post by fmzip » Mon Jan 22, 2018 10:09 pm

InvestorNewb wrote:
Mon Jan 22, 2018 4:34 pm
Am I being greedy? I need another 77.78% to reach that number. It doesn't seem that far away if this bull market continues for another 3-4 years.

My answer is YES :shock:

protagonist
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Re: Am I being greedy?

Post by protagonist » Mon Jan 22, 2018 10:35 pm

I used to kayak with an olympic level kayaker.

One time, when we were scouting a class 5 rapid, I asked him if he thought I might die if I tried running it.

His reply was "If you think you might die, you probably will."

Wise advice.

If you think you might be greedy, you probably are.

(btw, I just noticed this was my 5000th post. Who woulda thought????)

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Noobvestor
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Re: Am I being greedy?

Post by Noobvestor » Mon Jan 22, 2018 11:03 pm

protagonist wrote:
Mon Jan 22, 2018 10:35 pm
I used to kayak with an olympic level kayaker.

One time, when we were scouting a class 5 rapid, I asked him if he thought I might die if I tried running it.

His reply was "If you think you might die, you probably will."

Wise advice.

If you think you might be greedy, you probably are.

(btw, I just noticed this was my 5000th post. Who woulda thought????)
Happy 5,000 :sharebeer
"In the absence of clarity, diversification is the only logical strategy" -= Larry Swedroe

protagonist
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Re: Am I being greedy?

Post by protagonist » Tue Jan 23, 2018 12:59 am

Noobvestor wrote:
Mon Jan 22, 2018 11:03 pm
protagonist wrote:
Mon Jan 22, 2018 10:35 pm
I used to kayak with an olympic level kayaker.

One time, when we were scouting a class 5 rapid, I asked him if he thought I might die if I tried running it.

His reply was "If you think you might die, you probably will."

Wise advice.

If you think you might be greedy, you probably are.

(btw, I just noticed this was my 5000th post. Who woulda thought????)
Happy 5,000 :sharebeer
aw. Never thought you would notice. Thanks!!

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Hyperborea
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Re: Am I being greedy?

Post by Hyperborea » Tue Jan 23, 2018 2:35 am

chicagoan23 wrote:
Mon Jan 22, 2018 5:36 pm
At $1.1 million or so, would you rather grab an extra potential $20k to $30k per year expecting to ride out this bull market at 100% stocks vs going 80/20.....or potentially lose $350k in a 30% bear market drop vs. losing $220k in a 30% bear with an 80/20 allocation? If you have the need to maximize returns by staying at 100% risky assets then do it; if you no longer have that need to take maximum risk but instead would prefer to avoid the big loss, then I would shift into something a little less risky.
The math is off. I'm not sure if it's an error or an exaggeration to make a point.

100/0 = $1.1M / $0
80/20 = $880K / $220K

In a 30% downturn:

100/0 loses = $1.1M * 0.3 = $330K
80/20 loses = $880K * 0.3 = $264K

So, about about half the difference.

For the OP, if you can hold at 100% then I would do it - in fact I did right up to the point I retired early. However, it's important to "know yourself" and be willing to hold on even if it looks bleak. If you sell out at the bottom with a 100/0 then it's far worse than if you had held a 50/50 and didn't sell. You also need to have enough of an emergency fund to cover a reasonable set of emergencies.
"Plans are worthless, but planning is everything." - Dwight D. Eisenhower

MichDad
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Re: Am I being greedy?

Post by MichDad » Tue Jan 23, 2018 1:44 pm

TG2 wrote:
Mon Jan 22, 2018 7:27 pm
I have been effectively 100% in stocks since I started in 1987, so I obviously don't have any problem with the concept. This statement though does give me pause:
With that said, I can't help but always wanting to reach the next milestone. I have a sense that this "want" will never go away and that it will keep me invested in stocks for as long as I keep seeing the balance go up.
That sounds more like a gambler than an investor. Or an addict, seeking the next "high."

If you are going to be 100% in stocks, it should be because you believe in the idea, that you have evaluated your risk, and that you are comfortable assuming it. I am. I have never taken a dime out of the market, though will have to begin next year. Even with a 60% market drop I will easily have enough to live on as I do currently. Absent such a drop I am on track to make more in retirement than I did while working. The difference with me, though, is that there is no need or excitement involved. There is no "number." I will note the passing of a milestone, but that's all, really. There is no emotion. I am ruled by the logic and the math over the long term.

I would be particularly concerned about the part where you say, "...as long as I keep seeing the balance go up." What are your plans when the balance goes down? It will absolutely happen at some point, and go down quite a bit. How will you handle that? I handled it in the past by staying invested and buying more. I am retired now so won't be buying, but I don't need to sell a lot either. What will you do?
I see I'm a bit more conservative than TG2. I was 100 percent invested in US and international equities in my retirement portfolio from the time I began saving for retirement in 1987 (~ age 32) until 2017 (~ age 62). My wife and I now have about 34 percent of our combined retirement assets in the TSP’s G Fund (currently earning about 2.35 percent per year). For thirty years, I experienced some wild swings but always stayed the course by not leaving equities and by continuing to dollar-cost-average into the equities markets. I was able to stomach the swings well and my wife was willing to let me handle all this with minimal input from her. We’re now weeks away from retirement.

Basically, we saved and earned what we consider to be a lot of money by simply and consistently contributing the near maximum allowed into our respective 401(k) plans and our Roth IRAs.

If US and international equities markets were to plummet simultaneously 90 percent today, we’d still have my COLA’d government pension, our Social Security benefits, and over $1 million in the G Fund to tide us over. We also have very substantial equity in our home. I view this as our downside risk. Our plan is to wait until I turn age 70 to begin to collect Social Security benefits and my wife begins collecting her spousal benefit. If the equities markets plummet and we find we need current income, we can always begin to collect Social Security earlier than planned.

It bears repeating what I’ve written in previous threads. All the above may have been sheer luck – I don’t know – but it’s worked nicely for us. Of course, we’re not there yet. I have encouraged young relatives to consider the above approach that has, thus far, worked for us.

MichDad

delamer
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Re: Am I being greedy?

Post by delamer » Tue Jan 23, 2018 1:57 pm

MichDad wrote:
Tue Jan 23, 2018 1:44 pm
TG2 wrote:
Mon Jan 22, 2018 7:27 pm
I have been effectively 100% in stocks since I started in 1987, so I obviously don't have any problem with the concept. This statement though does give me pause:
With that said, I can't help but always wanting to reach the next milestone. I have a sense that this "want" will never go away and that it will keep me invested in stocks for as long as I keep seeing the balance go up.
That sounds more like a gambler than an investor. Or an addict, seeking the next "high."

If you are going to be 100% in stocks, it should be because you believe in the idea, that you have evaluated your risk, and that you are comfortable assuming it. I am. I have never taken a dime out of the market, though will have to begin next year. Even with a 60% market drop I will easily have enough to live on as I do currently. Absent such a drop I am on track to make more in retirement than I did while working. The difference with me, though, is that there is no need or excitement involved. There is no "number." I will note the passing of a milestone, but that's all, really. There is no emotion. I am ruled by the logic and the math over the long term.

I would be particularly concerned about the part where you say, "...as long as I keep seeing the balance go up." What are your plans when the balance goes down? It will absolutely happen at some point, and go down quite a bit. How will you handle that? I handled it in the past by staying invested and buying more. I am retired now so won't be buying, but I don't need to sell a lot either. What will you do?
I see I'm a bit more conservative than TG2. I was 100 percent invested in US and international equities in my retirement portfolio from the time I began saving for retirement in 1987 (~ age 32) until 2017 (~ age 62). My wife and I now have about 34 percent of our combined retirement assets in the TSP’s G Fund (currently earning about 2.35 percent per year). For thirty years, I experienced some wild swings but always stayed the course by not leaving equities and by continuing to dollar-cost-average into the equities markets. I was able to stomach the swings well and my wife was willing to let me handle all this with minimal input from her. We’re now weeks away from retirement.

Basically, we saved and earned what we consider to be a lot of money by simply and consistently contributing the near maximum allowed into our respective 401(k) plans and our Roth IRAs.

If US and international equities markets were to plummet simultaneously 90 percent today, we’d still have my COLA’d government pension, our Social Security benefits, and over $1 million in the G Fund to tide us over. We also have very substantial equity in our home. I view this as our downside risk. Our plan is to wait until I turn age 70 to begin to collect Social Security benefits and my wife begins collecting her spousal benefit. If the equities markets plummet and we find we need current income, we can always begin to collect Social Security earlier than planned.

It bears repeating what I’ve written in previous threads. All the above may have been sheer luck – I don’t know – but it’s worked nicely for us. Of course, we’re not there yet. I have encouraged young relatives to consider the above approach that has, thus far, worked for us.

MichDad
I have a COLAed pension also, and my husband has a partially-COLAed one.

It is important to acknowledge that it is relatively easy to maintain a very high equity exposure, even as you get close to retirement, when you will have SS and a significant COLAed pensions in retirement. This is especially true if you can live comfortably on them, without touching your nest egg, as we can.

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Toons
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Re: Am I being greedy?

Post by Toons » Tue Jan 23, 2018 2:04 pm

My plan is to get to $2M and then re-evaluate

Stick To Your Plan.
If your risk tolerance is 100% equities through bull and bear markets,
Go For It.
Let Us Know When You Reach Your Milestone. :thumbsup :thumbsup
"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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Noobvestor
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Re: Am I being greedy?

Post by Noobvestor » Tue Jan 23, 2018 2:14 pm

Toons wrote:
Tue Jan 23, 2018 2:04 pm
My plan is to get to $2M and then re-evaluate

Stick To Your Plan.
If your risk tolerance is 100% equities through bull and bear markets,
Go For It.
Let Us Know When You Reach Your Milestone. :thumbsup :thumbsup
Of course, it's always possible that by failing to diversify, this target amount will never be reached. So not just when, but also: if.
"In the absence of clarity, diversification is the only logical strategy" -= Larry Swedroe

MichDad
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Re: Am I being greedy?

Post by MichDad » Tue Jan 23, 2018 2:17 pm

delamer wrote:
Tue Jan 23, 2018 1:57 pm

I have a COLAed pension also, and my husband has a partially-COLAed one.

It is important to acknowledge that it is relatively easy to maintain a very high equity exposure, even as you get close to retirement, when you will have SS and a significant COLAed pensions in retirement. This is especially true if you can live comfortably on them, without touching your nest egg, as we can.
But here's the rub. When I started out saving for retirement in 1987, I didn't think I'd ever see the COLA'd pension. I honestly thought I'd leave the government for private practice. It wasn't until about ten years later when I started to think I'd remain with the government and reap the benefits of the pension. Yet, at no time before 2017 did I consider changing my all equities strategy.

That said, I agree that having a COLA'd pension allows one to take on the additional risk of an all equities portfolio.

MichDad

Easy Rhino
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Re: Am I being greedy?

Post by Easy Rhino » Tue Jan 23, 2018 2:22 pm

Yeah, you're probably being greedy. Not being judgemental. we all get greedy sometimes. It's really fun seeing the numbers go up.
InvestorNewb wrote:
Mon Jan 22, 2018 4:34 pm
it will keep me invested in stocks for as long as I keep seeing the balance go up.
emphasis mine.

If investing since 2012, you only seen two corrections, not even a full bear market or crash:
http://www.yardeni.com/pub/sp500corrbear.pdf

You've got to try to figure out how you will react, in your heart, after your stocks plummet by 50% or more. Some people will be fine, but lots of people will be induced to change their course.

you're in your 30's and have few needs to reduce your stock exposure. All-stocks would be inappropriate, but having bonds would be fine too.

I started adding some bonds to my portfolio in my early-mid 30's, just because I wanted to be able to rebalance in case of a crash. To give me something to do. I think I'm doing age - 15 in bonds.

3funder
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Re: Am I being greedy?

Post by 3funder » Tue Jan 23, 2018 3:54 pm

I don't care if I lose money in the short-term, and I'm age minus 15 in bonds. Having $1,000,000+ at your age is ridiculous. I'm 33, and my wife and I have a combined $400,000 or so. Why is this relevant? Because we're crushing the average American, and you're crushing us. Go 80/20, regardless of how you feel about the bull market.

Easy Rhino
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Re: Am I being greedy?

Post by Easy Rhino » Tue Feb 06, 2018 2:34 pm

InvestorNewb, you still reading this? Just wondering if the recent market volatility has affected your plans at all.

CantPassAgain
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Re: Am I being greedy?

Post by CantPassAgain » Tue Feb 06, 2018 2:41 pm

Easy Rhino wrote:
Tue Feb 06, 2018 2:34 pm
InvestorNewb, you still reading this? Just wondering if the recent market volatility has affected your plans at all.
I'll predict that he's sticking to his plan. He's been here for several years and if he went through late 2015/2016 fine with 100% stocks this current downturn (so far) should roll off his back....

Prove me right InvestorNewb!

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InvestorNewb
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Re: Am I being greedy?

Post by InvestorNewb » Tue Feb 06, 2018 2:55 pm

Easy Rhino wrote:
Tue Feb 06, 2018 2:34 pm
InvestorNewb, you still reading this? Just wondering if the recent market volatility has affected your plans at all.
CantPassAgain wrote:
Tue Feb 06, 2018 2:41 pm
Easy Rhino wrote:
Tue Feb 06, 2018 2:34 pm
InvestorNewb, you still reading this? Just wondering if the recent market volatility has affected your plans at all.
I'll predict that he's sticking to his plan. He's been here for several years and if he went through late 2015/2016 fine with 100% stocks this current downturn (so far) should roll off his back....

Prove me right InvestorNewb!
CantPassAgain is right. :beer I am still 100% stocks and I haven't sold any shares.

My motivation for staying in the market is threefold:

a) I know I can't time the market
b) I don't want to miss the rebound
c) Dividends are being paid out next month and I enjoy seeing my increased cash flow (despite market downturns)

I am able to keep a healthy mindset by avoiding checking my account balance completely. I also remember how high the balance was last time and it was the market that took me there... and it will be the market that takes me there again in the future.
My Portfolio: VTI [US], VXUS [Int'l], VNQ [REIT], VCN [Canada] (largest to smallest)

Finridge
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Re: Am I being greedy?

Post by Finridge » Tue Feb 06, 2018 3:57 pm

InvestorNewb wrote:
Mon Jan 22, 2018 4:34 pm
I have more than doubled my investments since I started investing in 2012. It is all thanks to this forum and my own dumb luck of getting in at the right time. The risk of being 100% invested in stocks has paid off well. With that said, I can't help but always wanting to reach the next milestone. I have a sense that this "want" will never go away and that it will keep me invested in stocks for as long as I keep seeing the balance go up.

I've told some of my family members and they think I'm crazy for not taking some off the table and putting the money to good use. I'm a renter in my mid 30s and I do not own any physical assets apart from my 10 year-old car. I live in a tiny apartment that I don't mind, but having some more space would be nice. Family members think I'm cheap given my situation.

My plan is to get to $2M and then re-evaluate. I need another 77.78% to reach that number. It doesn't seem that far away if this bull market continues for another 3-4 years.

Are there any other 100% stock investors who decide on reaching a number and then re-formulate their plan when the target is reached? I know this isn't the status quo way of investing, but I am enjoying the ride too much right now to get off of it. I'm in the front seat with a big smile on my face.

You are going into this with your eyes open. You have examined your asset allocation and decided that where you are in life now, 100/0 is what is best for you because you can bear the volatility.

Stay the course!

No, you are not crazy, and this is why its not a good idea to talk to family members about your personal situation unless necessary. I would expect that it's the case that 95% of the Bogleheads here would have family members out there who would think we are "cheap" should buy a lot more stuff--if we were to tell them how much we had in our portfolios. That's just how how most people are--if they get a dollar bill they feel the need to spend it.

And they want "more stuff" and think everyone else should also. But I don't need more "stuff." Getting a bigger house likely will not make you happier. The security you will get from being financially independent is better then getting a lot of "stuff" that you don't want or need and get only to fill other people's expectations as to how you should live.

From your post, it sounds like you have about $500,000 in your portfolio. To many other people, you are "rich" now. But looking at this as retirement funds and using the 4% rule, it equates to $20,000 per year for 30 years. A nice supplement to Social Security, but not enough to live on. So stick to your plans and work your way up to $2,000,000 (and then some).
Last edited by Finridge on Tue Feb 06, 2018 4:05 pm, edited 1 time in total.

panchilly
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Re: Am I being greedy?

Post by panchilly » Tue Feb 06, 2018 4:04 pm

InvestorNewb wrote:
Mon Jan 22, 2018 4:34 pm
I have more than doubled my investments since I started investing in 2012. It is all thanks to this forum and my own dumb luck of getting in at the right time. The risk of being 100% invested in stocks has paid off well. With that said, I can't help but always wanting to reach the next milestone. I have a sense that this "want" will never go away and that it will keep me invested in stocks for as long as I keep seeing the balance go up.

I've told some of my family members and they think I'm crazy for not taking some off the table and putting the money to good use. I'm a renter in my mid 30s and I do not own any physical assets apart from my 10 year-old car. I live in a tiny apartment that I don't mind, but having some more space would be nice. Family members think I'm cheap given my situation.

My plan is to get to $2M and then re-evaluate. I need another 77.78% to reach that number. It doesn't seem that far away if this bull market continues for another 3-4 years.

Are there any other 100% stock investors who decide on reaching a number and then re-formulate their plan when the target is reached? I know this isn't the status quo way of investing, but I am enjoying the ride too much right now to get off of it. I'm in the front seat with a big smile on my face.
I think you are being very greedy here... Too greedy. I think you should diversify into some physical assets (real estate)

You are still a renter and you'll always need a place to live. Why not take some of that money off of the table and buy yourself a nice home in an in-demand metro area that is likely to see appreciation? Take advantage of still low interest rates on a 30 year loan to hedge potential future inflation. Then keep on investing!
Last edited by panchilly on Tue Feb 06, 2018 4:36 pm, edited 1 time in total.

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DaftInvestor
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Re: Am I being greedy?

Post by DaftInvestor » Tue Feb 06, 2018 4:10 pm

If you feel you can stomach a big drop then there is nothing wrong with a 100/0 stock/bond allocation (especially in your 20's or 30's). Personally I've never been 100% stock but was at 90/10 for many years.
I don't know why you use the word "greedy" - you haven't even reached your milestone yet. And even if you surpass your milestone there is nothing greedy about wanting to build wealth provided you aren't doing so in an underhanded way and continue to contribute to society while doing so.

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