Currently invested in 100% stock

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RTAF
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Currently invested in 100% stock

Post by RTAF »

35 years old with a 401K, Roth IRA and a brokerage account. I invest in each account with every paycheck, and allocations are currently 100% stock (500 index funds).

No debt and I have a cash emergency fund in addition to the investments.

I have been told that 100% stock if fine at my age but would appreciate feedback.

Should I split investments into international and bond funds? If so any recommendations on funds / percentages?

Roth and brokerage are with Vanguard.

401K is with fidelity and the following available funds:

FID 500 Index
TRP Growth Stock
Col Mid Cap Index I
JPM Mid Cap Grth R5
DFA US Small Cap I
DFA Emerging Markets I
Dodge & Cox Intl Stk
Fid Intl Index
Dodge and Cox Stock
JPM US Govt MM Cap
Vang Tot Bd Mkt Adm
PIM Real Return Inst
Blkrk Tot Return K
MIP II CL I
TRP Retirement 2005 - 2060
Last edited by RTAF on Sat Sep 21, 2019 7:02 pm, edited 2 times in total.
Nummerkins
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Re: Currently invested in 100% stock

Post by Nummerkins »

I'm also 35 with a 100% US stock market allocation in my Roth/Rollover IRAs. I have nothing to balance and love it. No need to complicate it or introduce drag if you are investing for 25-30 years.
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sometimesinvestor
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Re: Currently invested in 100% stock

Post by sometimesinvestor »

Sometime in your 40s you may wish to decide that stocks are overvalued.At that point move to 80-20
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DanMahowny
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Re: Currently invested in 100% stock

Post by DanMahowny »

Nothing wrong with 100% stock.

The question is, will you remain 100% stock if/when your investments decline 40%, 50%, 60%, or more?
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grettman
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Re: Currently invested in 100% stock

Post by grettman »

DanMahowny wrote: Sat Sep 21, 2019 7:07 pm Nothing wrong with 100% stock.

The question is, will you remain 100% stock if/when your investments decline 40%, 50%, 60%, or more?

Good point. OP may not have been deeply invested during the 2008 crisis..... you never know how you will react until you see almost half your money cut in half.....
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JoMoney
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Re: Currently invested in 100% stock

Post by JoMoney »

RTAF wrote: Sat Sep 21, 2019 6:27 pm... I have a cash emergency fund in addition to the investments...
There's lots of people on here that are 100% stock ... except for all their savings that isn't in stocks :P
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham
HomeStretch
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Re: Currently invested in 100% stock

Post by HomeStretch »

Asset allocation is a personal decision. If you are comfortable with 100% equity, then it is fine.

At age 35, I personally would hold 15-20% bonds/fixed income to reduce portfolio volatility/risk.
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JoMoney
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Re: Currently invested in 100% stock

Post by JoMoney »

I'm just hoping someone comes along and says something to the effect "... all these 100% stock threads must be a sign the market has peaked ..."
You might think it specious reasoning, but so far having someone say that has kept the bull market strong ;)
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham
TheDDC
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Re: Currently invested in 100% stock

Post by TheDDC »

Agree with 100% equities, but why the slice and dice? 37/33 and 100% US here. No regrets. My "bond" holding is my state pension.

If we believe investing is worth it and we believe in getting rich slowly then 100% equities (index funds, not individual stocks) would make sense.

-TheDDC
Rules to wealth building: 75-80% VTSAX piled high and deep, 20-25% VTIAX, 0% given away to banks, minimize amount given to medical-industrial complex
Ferdinand2014
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Re: Currently invested in 100% stock

Post by Ferdinand2014 »

RTAF wrote: Sat Sep 21, 2019 6:27 pm 35 years old with a 401K, Roth IRA and a brokerage account. I invest in each account with every paycheck, and allocations are currently 100% stock (500 index funds).

No debt and I have a cash emergency fund in addition to the investments.

I have been told that 100% stock if fine at my age but would appreciate feedback.

Should I split investments into international and bond funds? If so any recommendations on funds / percentages?

Roth and brokerage are with Vanguard.

401K is with fidelity and the following available funds:

FID 500 Index
TRP Growth Stock
Col Mid Cap Index I
JPM Mid Cap Grth R5
DFA US Small Cap I
DFA Emerging Markets I
Dodge & Cox Intl Stk
Fid Intl Index
Dodge and Cox Stock
JPM US Govt MM Cap
Vang Tot Bd Mkt Adm
PIM Real Return Inst
Blkrk Tot Return K
MIP II CL I
TRP Retirement 2005 - 2060
Your not really 100% stock if you have cash on the side in emergency funds in my opinion. Some might disagree, but I personally look at my portfolio as one which I include cash in emergency money and otherwise. I have 100% of my equities in FXAIX (Fido 500 index fund) ER 0.015. You listed at top as option in your 401k. In my opinion that is all you really need. However if you were inclined towards international or 3 fund, consider adding Fidelity International Index - you don’t list ticker, but I’ll assume it is FSPSX and has an ER of 0.035. For the bond fund I would pick Vanguard total bond market fund. I personally only invest in FXAIX and T-bills (cash). Don’t really see the need to add complication. As for percents, that’s a personal decision and based on your needs and ability to take risk. Benjamin Graham always suggested never more then 75% and never less then 25% stocks. If you add international the range should be 0% to market cap which currently is about 45% of the equity portion.
“You only find out who is swimming naked when the tide goes out.“ — Warren Buffett
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dogagility
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Re: Currently invested in 100% stock

Post by dogagility »

Agree with the others; it's fine to be 100% stock at your age (in addition to your emergency fund).

There are two considerations for this allocation. Psychological... are you willing to stay the course in the face of a large market decline? Life resiliency... would you need to tap this money if you lost your job for an extended period of time (say, 6 months)?
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Stinky
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Re: Currently invested in 100% stock

Post by Stinky »

Welcome to the Board! Glad that you joined us.

I'm fine with 100% stock at your age.

As to domestic vs. international equities, you'll find a diversity of opinions amongst Bogleheads. Some will say 100% US equities is fine; others will say that you should have some international, ranging up to 50% or so international. Note that international has underperformed for several years now; there are a lot of threads along the lines of "is now the time to get out of international". (By way of full disclosure, I'm targeting 35%-40% international in my equity allocation.)
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bgf
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Re: Currently invested in 100% stock

Post by bgf »

I dont count my emergency fund as part of my portfolio because it isnt part of my portfolio. its purpose is to rise and fall over short time periods depending on surprise expenses.

the purpose of my portfolio is capital appreciation over decades to build wealth and fund retirement.

i dont consider my home, cars, or watch as part of my portfolio either.

others can do what they want but my emergency fund has nothing to do with my stock portfolio.

my portfolio is 100% stocks, and im 34. it will stay 100% stock probably until well into my 40s.
“TE OCCIDERE POSSUNT SED TE EDERE NON POSSUNT NEFAS EST"
NYCPete
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Re: Currently invested in 100% stock

Post by NYCPete »

Your stock/bond allocation should be determined by your need and willingness to take risk, not your age. Age is a part of the need and willingness equation, it's not all of it. You were 24 when the last stock market downturn happened. Were you invested at all? Do you have any first hand experience in seeing 1/4 of your savings disappear in a week?

It's too wishy-washy to say 35 is young enough for 100% but not have a plan for when it's not young enough for 100%. This is why rules of thumb like age in bonds or age-10 or age-20 in bonds have stuck around. At least that's a plan.

Count me as someone who thinks you need bonds. And you need a plan for how much bonds in the future. If you don't have a plan, you will have nothing to cling to in the next downturn.

Best,
Peter
To the extent that a fool knows his foolishness, | He may be deemed wise | A fool who considers himself wise | Is indeed a fool. | | Buddha
UpperNwGuy
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Re: Currently invested in 100% stock

Post by UpperNwGuy »

sometimesinvestor wrote: Sat Sep 21, 2019 7:03 pm Sometime in your 40s you may wish to decide that stocks are overvalued.At that point move to 80-20
That sounds like market timing!
MotoTrojan
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Re: Currently invested in 100% stock

Post by MotoTrojan »

I’d simplify regardless. That’s a lot of funds.
dbr
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Re: Currently invested in 100% stock

Post by dbr »

RTAF wrote: Sat Sep 21, 2019 6:27 pm
I have been told that 100% stock if fine at my age but would appreciate feedback.
I would spend some time learning about risk and return in investing so that you can make an informed decision for yourself rather than rely on what other people tell you. Asset allocation is a personal decision involving weighing objectives and consequences. The Larry Swedroe suggestion to consider need, ability, and willingness to take risk makes the most sense to me.

There is a reading list in the Wiki: https://www.bogleheads.org/wiki/Books:_ ... nd_reviews

I like the books by Ferri and Swedroe in particular. Bernstein is good too.
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RTAF
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Re: Currently invested in 100% stock

Post by RTAF »

Thanks everyone for your input!
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arcticpineapplecorp.
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Re: Currently invested in 100% stock

Post by arcticpineapplecorp. »

UpperNwGuy wrote: Sun Sep 22, 2019 9:29 am
sometimesinvestor wrote: Sat Sep 21, 2019 7:03 pm Sometime in your 40s you may wish to decide that stocks are overvalued.At that point move to 80-20
That sounds like market timing!
if so do you consider target date retirement funds to be market timing?

I'm not sure you are understanding the definition of market timing. accorging to the wiki (source: https://www.bogleheads.org/wiki/Market_timing):
investopedia says:

1. The act of attempting to predict the future direction of the market, typically through the use of technical indicators or economic data.

2. The practice of switching among mutual fund asset classes in an attempt to profit from the changes in their market outlook. Some investors, especially academics, believe it is impossible to time the market. Other investors, notably active traders, believe strongly in market timing. Thus, whether market timing is possible is really a matter of opinion. What we can say with certainty is that it's very difficult to be successful at market timing continuously over the long-run. For the average investor who doesn't have the time (or desire) to watch the market on a daily basis, there are good reasons to avoid market timing and focus on investing for the long-run.
sometimesinvestor made a suggestion based on age, not what's happened in the market. Similarly, target date retirement funds make allocation decisions based on age, not market conditions.
It's "Stay" the course, not Stray the Course. Buy and Hold works. You should really try it sometime. Get a plan: www.bogleheads.org/wiki/Investment_policy_statement
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JoeRetire
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Re: Currently invested in 100% stock

Post by JoeRetire »

RTAF wrote: Sat Sep 21, 2019 6:27 pm I have been told that 100% stock if fine at my age but would appreciate feedback.
If you are comfortable with that asset allocation, it's fine. Otherwise, it's not.
It's the end of the world as we know it. | It's the end of the world as we know it. | It's the end of the world as we know it. | And I feel fine.
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Stinky
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Re: Currently invested in 100% stock

Post by Stinky »

JoeRetire wrote: Sun Sep 22, 2019 9:00 pm
RTAF wrote: Sat Sep 21, 2019 6:27 pm I have been told that 100% stock if fine at my age but would appreciate feedback.
If you are comfortable with that asset allocation, it's fine. Otherwise, it's not.
So true.
It's a GREAT day to be alive! - Travis Tritt
jeffh19
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Re: Currently invested in 100% stock

Post by jeffh19 »

I'm also 100% in my 401k and brokerage, basically all my money outside of my emergency fund. I'm 34.

Dont plan on using this money for a while, so the more time in the market with all my money the better.

When the market crashes, time to sell everything I own and live in a cardboard box to put more money in :mrgreen:

As I get older/at appropriate times depending on what the market is doing I'll try to diversify some in bonds or whatever else. Hardcore in save and invest everything I can mode right now though.
l1am
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Re: Currently invested in 100% stock

Post by l1am »

What if you want to retire younger, at like 50? Will you just postpone retirement if the stock market crashes, and keep working until you hit 25x?

I'm the same age as you and pushing for ~70/30 in taxable and ~90/10 in deferred. I'll probably push taxable even heavier towards bonds especially if I'm realistically approaching 25x. It would suck to be like <10 years from potential retirement, your portfolio halves, and you need to work another 10 years.

In general, my logic is that sabotaging early retirement isn't worth the extra returns.
mikeyzito22
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Re: Currently invested in 100% stock

Post by mikeyzito22 »

grettman wrote: Sat Sep 21, 2019 8:56 pm
DanMahowny wrote: Sat Sep 21, 2019 7:07 pm Nothing wrong with 100% stock.

The question is, will you remain 100% stock if/when your investments decline 40%, 50%, 60%, or more?

Good point. OP may not have been deeply invested during the 2008 crisis..... you never know how you will react until you see almost half your money cut in half.....
May not have been? OP would've been 23 at the time. So, yes most likely not deeply invested :)
mathguy3021
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Re: Currently invested in 100% stock

Post by mathguy3021 »

l1am wrote: Sun Sep 22, 2019 9:55 pm What if you want to retire younger, at like 50? Will you just postpone retirement if the stock market crashes, and keep working until you hit 25x?

I'm the same age as you and pushing for ~70/30 in taxable and ~90/10 in deferred. I'll probably push taxable even heavier towards bonds especially if I'm realistically approaching 25x. It would suck to be like <10 years from potential retirement, your portfolio halves, and you need to work another 10 years.

In general, my logic is that sabotaging early retirement isn't worth the extra returns.
I agree 100% with this. If early retirement is the goal and you're getting close to financial independence, it is not worth it to let the stock market determine when you can retire. This is why I have a safer allocation for my age. If stocks crash 50%, and stay down for a long time, it will be hard for me to retire early if I had 100% in stocks. But if I have a large chunk of bonds and cash, I will be able to retire early no matter what the market is doing.
UpperNwGuy
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Re: Currently invested in 100% stock

Post by UpperNwGuy »

arcticpineapplecorp. wrote: Sun Sep 22, 2019 8:57 pm
UpperNwGuy wrote: Sun Sep 22, 2019 9:29 am
sometimesinvestor wrote: Sat Sep 21, 2019 7:03 pm Sometime in your 40s you may wish to decide that stocks are overvalued.At that point move to 80-20
That sounds like market timing!
if so do you consider target date retirement funds to be market timing?

I'm not sure you are understanding the definition of market timing. accorging to the wiki (source: https://www.bogleheads.org/wiki/Market_timing):
investopedia says:

1. The act of attempting to predict the future direction of the market, typically through the use of technical indicators or economic data.

2. The practice of switching among mutual fund asset classes in an attempt to profit from the changes in their market outlook. Some investors, especially academics, believe it is impossible to time the market. Other investors, notably active traders, believe strongly in market timing. Thus, whether market timing is possible is really a matter of opinion. What we can say with certainty is that it's very difficult to be successful at market timing continuously over the long-run. For the average investor who doesn't have the time (or desire) to watch the market on a daily basis, there are good reasons to avoid market timing and focus on investing for the long-run.
sometimesinvestor made a suggestion based on age, not what's happened in the market. Similarly, target date retirement funds make allocation decisions based on age, not market conditions.
I was responding to the idea of making allocation changes because stocks are overvalued, not to the idea of age-based allocation changes.
l1am
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Re: Currently invested in 100% stock

Post by l1am »

mathguy3021 wrote: Sun Sep 22, 2019 10:30 pm I agree 100% with this. If early retirement is the goal and you're getting close to financial independence, it is not worth it to let the stock market determine when you can retire. This is why I have a safer allocation for my age. If stocks crash 50%, and stay down for a long time, it will be hard for me to retire early if I had 100% in stocks. But if I have a large chunk of bonds and cash, I will be able to retire early no matter what the market is doing.
Ye, that's why I now have separate AA's for taxable and deferred - since I'd intend to dip into taxable at retirement, and not touch deferred until age 60+. i.e. it has longer to ride.

You also touched on a more general important point. As you approach retirement the cost becomes higher relative to the potential reward. i.e. the reward might be 25% extra per year in retirement, but the cost might be bumping the probability of working another 5-10 years by 50%.

That said, it all depends on the individual and their goals. I just think OP needs to take this point into his equation.
retiredflyboy
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Re: Currently invested in 100% stock

Post by retiredflyboy »

Yes, 100% stock is fine. Just don’t decide to change when the next bear market hits.
Facts are stubborn things. Everything works until it doesn’t.
usagi
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Re: Currently invested in 100% stock

Post by usagi »

I would suggest you hold at 100% (hint you really are not at 100% is you have an emergency fund - just sayin'). It will be to your benefit to go through a bear market or two before you retire in order to test your stomach. You learn much about yourself through such a trial. You have plenty of time to recover from a recession of bear blip and the experience is well worth it. In the end, you may learn your tolerance limit which is very, very valuable.

I learned much from 1987, 2000, 2008 that led me to feel very comfortable in setting my asset allocation going into retirement.
SilentChimera
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Re: Currently invested in 100% stock

Post by SilentChimera »

I agree with one of the previous posters that said you are not really 100% stock if you have an emergency fund. How big is your emergency fund in comparison with the amount you own in equities? If your emergency fund is the same size as your equity portfolio then in my opinion you are 50/50. My emergency fund is 10% of my portfolio and I consider myself to therefore be 90% stocks rather than 100%. These details are important because 100% stock means different things to different people.
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Re: Currently invested in 100% stock

Post by abuss368 »

RTAF wrote: Sat Sep 21, 2019 6:27 pm 35 years old with a 401K, Roth IRA and a brokerage account. I invest in each account with every paycheck, and allocations are currently 100% stock (500 index funds).

No debt and I have a cash emergency fund in addition to the investments.

I have been told that 100% stock if fine at my age but would appreciate feedback.

Should I split investments into international and bond funds? If so any recommendations on funds / percentages?

Roth and brokerage are with Vanguard.

401K is with fidelity and the following available funds:

FID 500 Index
TRP Growth Stock
Col Mid Cap Index I
JPM Mid Cap Grth R5
DFA US Small Cap I
DFA Emerging Markets I
Dodge & Cox Intl Stk
Fid Intl Index
Dodge and Cox Stock
JPM US Govt MM Cap
Vang Tot Bd Mkt Adm
PIM Real Return Inst
Blkrk Tot Return K
MIP II CL I
TRP Retirement 2005 - 2060
Welcome to the forum!

An investors asset allocation is the most important decision they can make and impacts the overall return and risk of a portfolio. If you sleep well at night and are prepared for a 50% (or greater) decrease int he next downturn then you have an allocation that works for you.
John C. Bogle: “Simplicity is the master key to financial success."
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abuss368
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Re: Currently invested in 100% stock

Post by abuss368 »

RTAF wrote: Sat Sep 21, 2019 6:27 pm 35 years old with a 401K, Roth IRA and a brokerage account. I invest in each account with every paycheck, and allocations are currently 100% stock (500 index funds).

No debt and I have a cash emergency fund in addition to the investments.

I have been told that 100% stock if fine at my age but would appreciate feedback.

Should I split investments into international and bond funds? If so any recommendations on funds / percentages?

Roth and brokerage are with Vanguard.

401K is with fidelity and the following available funds:

FID 500 Index
TRP Growth Stock
Col Mid Cap Index I
JPM Mid Cap Grth R5
DFA US Small Cap I
DFA Emerging Markets I
Dodge & Cox Intl Stk
Fid Intl Index
Dodge and Cox Stock
JPM US Govt MM Cap
Vang Tot Bd Mkt Adm
PIM Real Return Inst
Blkrk Tot Return K
MIP II CL I
TRP Retirement 2005 - 2060
John Bogle has often recommended "age in bonds" or something that increases with age as a starting point. An investors unique circumstances will directly impact that.
John C. Bogle: “Simplicity is the master key to financial success."
pkcrafter
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Re: Currently invested in 100% stock

Post by pkcrafter »

JoMoney wrote: Sat Sep 21, 2019 9:19 pm I'm just hoping someone comes along and says something to the effect "... all these 100% stock threads must be a sign the market has peaked ..."
You might think it specious reasoning, but so far having someone say that has kept the bull market strong ;)
all these 100% stock threads must be a sign the market has peaked :D

RTAF, how long have you been 100% stocks? What fund(s) are you in?

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.
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Stinky
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Re: Currently invested in 100% stock

Post by Stinky »

pkcrafter wrote: Tue Sep 24, 2019 9:15 am
JoMoney wrote: Sat Sep 21, 2019 9:19 pm I'm just hoping someone comes along and says something to the effect "... all these 100% stock threads must be a sign the market has peaked ..."
You might think it specious reasoning, but so far having someone say that has kept the bull market strong ;)
all these 100% stock threads must be a sign the market has peaked

RTAF, how long have you been 100% stocks? What fund(s) are you in?

Paul
RTAF said in his original post that he was 100% in S&P 500. He didn’t list a Total Market fund for his workplace plan.

He also said he’s 35. If he’s 100% stocks now, he was probably that way ever since the beginning of his investing time.
It's a GREAT day to be alive! - Travis Tritt
pkcrafter
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Re: Currently invested in 100% stock

Post by pkcrafter »

Stinky wrote: Tue Sep 24, 2019 9:22 am
pkcrafter wrote: Tue Sep 24, 2019 9:15 am
JoMoney wrote: Sat Sep 21, 2019 9:19 pm I'm just hoping someone comes along and says something to the effect "... all these 100% stock threads must be a sign the market has peaked ..."
You might think it specious reasoning, but so far having someone say that has kept the bull market strong ;)
all these 100% stock threads must be a sign the market has peaked

RTAF, how long have you been 100% stocks? What fund(s) are you in?

Paul
RTAF said in his original post that he was 100% in S&P 500.
Thanks, missed that.
He also said he’s 35. If he’s 100% stocks now, he was probably that way ever since the beginning of his investing time.
Maybe, but when did he begin? It could also be that he recently went to 100%.

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.
beehivehave
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Re: Currently invested in 100% stock

Post by beehivehave »

If you have to ask, maybe 100% is not for you,as you may sell at the worst possible time.
Maybe 20%-25% in fixed income, including emergency funds is better?
Also, would include some international equities, such as Fidelity index.
Say 60/20/20?
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onthecusp
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Re: Currently invested in 100% stock

Post by onthecusp »

100% stock might be ok for you given many of the caveats already expressed. There is another reason to have an allocation to bonds, and that is buying an education in how bonds work. Now, I would not recommend holding a whole life policy or other poor investment "for education," but given the almost universal acceptance of bonds as a reasonable (if not necessary) investment vehicle, holding some in a low cost bond fund lets you see how they perform over time.

The way bonds act is not intuitive for many people. Near to retirement I've only held bonds for a few years and the first couple of years almost convinced me they are the waste of time and money I always thought they were. More recently I see how they act in a rate reduction environment which, counterintuitively to me, is good! So consider a 5 or 10% allocation to bonds and pay attention to them. You will have a better understanding when it is time to up your allocation.
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quisp65
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Re: Currently invested in 100% stock

Post by quisp65 »

It's my only useful tip I feel I offer to this forum.

Since stocks have always outperformed bonds and since stocks have hit a high at least every seven years since 1950....

Don't even think about fixed income till 10 years or less from retirement and buy your fixed income on a market high somewhere within 10 years of retirement.

https://en.wikipedia.org/wiki/Closing_m ... _S%26P_500
Plan: stock index/roughly 7 years cash investments, one-way balance market highs, slide withdrawal rate for comfort
Bir48die
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Re: Currently invested in 100% stock

Post by Bir48die »

I was into my third year of retirement (last Oct) when I moved from 100% equities to 60/40. I'm in agreement at your age 100% is just fine. Disclaimer: I did have a decent % of MLP's in one of my accounts.
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ruralavalon
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Re: Currently invested in 100% stock

Post by ruralavalon »

RTAF wrote: Sat Sep 21, 2019 6:27 pm 35 years old with a 401K, Roth IRA and a brokerage account. I invest in each account with every paycheck, and allocations are currently 100% stock (500 index funds).

No debt and I have a cash emergency fund in addition to the investments.

I have been told that 100% stock if fine at my age but would appreciate feedback.

Should I split investments into international and bond funds? If so any recommendations on funds / percentages?

Roth and brokerage are with Vanguard.

401K is with fidelity and the following available funds:

FID 500 Index
TRP Growth Stock
Col Mid Cap Index I
JPM Mid Cap Grth R5
DFA US Small Cap I
DFA Emerging Markets I
Dodge & Cox Intl Stk
Fid Intl Index
Dodge and Cox Stock
JPM US Govt MM Cap
Vang Tot Bd Mkt Adm
PIM Real Return Inst
Blkrk Tot Return K
MIP II CL I
TRP Retirement 2005 - 2060
At age 35 I suggest about 20% in bonds or other fixed income investments (like CDs, savings accounts, money market fund). This is expected to substantially reduce portfolio volatility (risk), with only a relatively modest decrease in portfolio return. Graph, "An Efficient Frontier: the power of diversification". Please see:
1) Wiki article Bogleheads® investment philosophy, part 3 "Never bear too much or too little risk";
2) Wiki article, "Asset allocation"; and
3) Morningstar (8/10/2019), "The Best Diversifiers for Your Equity Portfolio".


I suggest around 20 - 30% of stocks in international stocks. Vanguard paper (March 2012), "Considerations for investing in non-U.S. equities". Historically, allocating 20% of an equity portfolio to non-U.S. stocks would have captured about 84% of the maximum possible diversification benefit, and allocating 30% of an equity portfolio to non-U.S. stocks would have captured about 99% of the maximum possible diversification benefit (p. 6). (You can find lots of debate here on international allocation, opinions ranging all the way from 00% to 50% of stocks in international stocks. If you want more viewpoints on international stocks please try the Google search box, upper right, this page).

That works out to about 20% bonds, 20% international stocks, and 60% domestic stocks. Asset allocation is a very personal decision. You must decide on an allocation that is comfortable for you based on your own ability, willingness and need to take risk.

For bonds in your 401k I suggest using Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX) ER 0.05%.

For international stocks in your 401k, you could use either:
1) Fidelity® International Index (developed markets only) (FSPSX) ER 0.045%; or
2) Dodge & Cox International Stock (both developed and emerging markets) (DODFX) ER 0.63%, Morningstar (09/06/2019), "Be Thankful That You Don't Compete Against Vanguard".

Edit to correct spelling.
Last edited by ruralavalon on Tue Sep 24, 2019 12:24 pm, edited 2 times in total.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started
bradpevans
Posts: 619
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Re: Currently invested in 100% stock

Post by bradpevans »

DanMahowny wrote: Sat Sep 21, 2019 7:07 pm Nothing wrong with 100% stock.

The question is, will you remain 100% stock if/when your investments decline 40%, 50%, 60%, or more?
At the OP's age (and for a while yet) this also has the impact the current contributions are bought cheap.
In other words, when you are still accumulating then you get to "buy low" in these periods.

Eventually the "portfolio effect" starts to dominate: the incremental return on the money "already invested" becomes much larger than the "new money coming in"

while accumulating
the strategy of more money in stocks for longer periods of time is what *I* like, but it may not be for everyone
KlangFool
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Re: Currently invested in 100% stock

Post by KlangFool »

RTAF wrote: Sat Sep 21, 2019 6:27 pm 35 years old with a 401K, Roth IRA and a brokerage account. I invest in each account with every paycheck, and allocations are currently 100% stock (500 index funds).

No debt and I have a cash emergency fund in addition to the investments.
RTAF,

1) How big is your cash emergency fund?

2) How long can you survive with your emergency fund if you are unemployed in a recession and the stock market is down 50%?

3) How would you feel if you have to sell your stock at a 50% loss in order to pay your living expense while looking for a job?

4) Would you settle for a lowered paying job just because you are about to run out the emergency fund and you will be selling your stock at 50% loss? How much would that costs you?

5) Have you ever been unemployed in a recession?

6) You have to survive in order to succeed. If you do not survive the next recession, you do not get to enjoy the long-term return of the 100% stock.

KlangFool
frcabot
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Re: Currently invested in 100% stock

Post by frcabot »

all these 100% stock threads must be a sign the market has peaked
rascott
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Re: Currently invested in 100% stock

Post by rascott »

I would (do) include something other than 100% large cap US..... plenty of evidence out there that a diversified equity portfolio that isn't all SP500 is beneficial over a lifetime.

What you choose for that is up to you.


I personally see no reason for bonds until approx 10 years out from retirement.... when you can start amping them up.

This isn't counting cash equivalent emergency savings.... maybe a year's worth, ideally. Much of that is based upon your employment stability.
SovereignInvestor
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Re: Currently invested in 100% stock

Post by SovereignInvestor »

quisp65 wrote: Tue Sep 24, 2019 10:37 am It's my only useful tip I feel I offer to this forum.

Since stocks have always outperformed bonds and since stocks have hit a high at least every seven years since 1950....

Don't even think about fixed income till 10 years or less from retirement and buy your fixed income on a market high somewhere within 10 years of retirement.

https://en.wikipedia.org/wiki/Closing_m ... _S%26P_500
I personally am 100% stocks at age 29. But during those periods when it took Sticks 7 years to match old high, binds made many news highs. Like 2007 the S&P tagged the 2000 high but long term bonds were up around 40-50% from 2000-2007. From 2000 to 2013 when S&P was nearly flat long term bonds nearly doubled.
FrugalConservative
Posts: 227
Joined: Thu Aug 17, 2017 9:44 am

Re: Currently invested in 100% stock

Post by FrugalConservative »

100% is fine.

Your fund choices may not be\.

SIMPLIFY.

I guarantee some of those funds have high expense ratios. Index funds first, everything else is a drag on returns.
teamDE
Posts: 323
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Re: Currently invested in 100% stock

Post by teamDE »

We're 38 and 80/20 not counting our EF. It's not like VBTLX is a dog, it's up almost 9% YTD.

35yrs old+ and 100% stocks is very aggressive per conventional BH wisdom.
MotoTrojan
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Re: Currently invested in 100% stock

Post by MotoTrojan »

arcticpineapplecorp. wrote: Sun Sep 22, 2019 8:57 pm
UpperNwGuy wrote: Sun Sep 22, 2019 9:29 am
sometimesinvestor wrote: Sat Sep 21, 2019 7:03 pm Sometime in your 40s you may wish to decide that stocks are overvalued.At that point move to 80-20
That sounds like market timing!
if so do you consider target date retirement funds to be market timing?

I'm not sure you are understanding the definition of market timing. accorging to the wiki (source: https://www.bogleheads.org/wiki/Market_timing):
investopedia says:

1. The act of attempting to predict the future direction of the market, typically through the use of technical indicators or economic data.

2. The practice of switching among mutual fund asset classes in an attempt to profit from the changes in their market outlook. Some investors, especially academics, believe it is impossible to time the market. Other investors, notably active traders, believe strongly in market timing. Thus, whether market timing is possible is really a matter of opinion. What we can say with certainty is that it's very difficult to be successful at market timing continuously over the long-run. For the average investor who doesn't have the time (or desire) to watch the market on a daily basis, there are good reasons to avoid market timing and focus on investing for the long-run.
sometimesinvestor made a suggestion based on age, not what's happened in the market. Similarly, target date retirement funds make allocation decisions based on age, not market conditions.
You may want to read it again. Age was not the only factor mentioned.
LiterallyIronic
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Re: Currently invested in 100% stock

Post by LiterallyIronic »

Nothing wrong with that. I'm 35 and my 401k is 100% stock. IRAs are 90/10, because that was the most aggressive Target Retirement Fund.

You just need to weigh your need, desire, and ability to take risk.
ruralavalon wrote: Wed Sep 25, 2019 10:29 am
frcabot wrote: Tue Sep 24, 2019 5:04 pm all these 100% stock threads must be a sign the market has peaked
Anyone endorsing the asset allocation of 100% stocks ought to state their age and how much they had invested at the start of the last market collapse in 2008.
Already stated age. I graduated college in December 2008 and therefore had $0 invested during the downturn. I also had $0 invested during the run-up. Didn't really start investing more than a few thousand per year until 2017, so I've pretty much watched the market do nothing for me.
Last edited by LiterallyIronic on Wed Sep 25, 2019 10:40 am, edited 1 time in total.
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ruralavalon
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Re: Currently invested in 100% stock

Post by ruralavalon »

frcabot wrote: Tue Sep 24, 2019 5:04 pm all these 100% stock threads must be a sign the market has peaked
Anyone endorsing the asset allocation of 100% stocks ought to state their age and how much they had invested at the start of the last market collapse in 2008.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started
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