VTSAX Owner > Anyone thinking of moving to cash for a bit?

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financialfreedom87
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VTSAX Owner > Anyone thinking of moving to cash for a bit?

Post by financialfreedom87 »

Hi all!

For a long term investor, VTSAX has proven to be a greaat investment. I am newer to investing and while I know that the general refrain for Bogleheads is to hold on and not try to play the market, I wanted to know if anyone on the board is seriously considering a move to cash with VTSAX, VTI or any other related fund or ETF? Things *appear* significantly overvalued at the moment and I'm personally struggling to feel comfortable holding on for the ride!

Looking forward to your thoughts, all!
exodusNH
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Re: VTSAX Owner > Anyone thinking of moving to cash for a bit?

Post by exodusNH »

financialfreedom87 wrote: Wed Nov 17, 2021 10:04 am Hi all!

For a long term investor, VTSAX has proven to be a greaat investment. I am newer to investing and while I know that the general refrain for Bogleheads is to hold on and not try to play the market, I wanted to know if anyone on the board is seriously considering a move to cash with VTSAX, VTI or any other related fund or ETF? Things *appear* significantly overvalued at the moment and I'm personally struggling to feel comfortable holding on for the ride!

Looking forward to your thoughts, all!
When will you get back in?
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Re: VTSAX Owner > Anyone thinking of moving to cash for a bit?

Post by pkcrafter »

financialfreedom87 wrote: Wed Nov 17, 2021 10:04 am Hi all!

For a long term investor, VTSAX has proven to be a greaat investment. I am newer to investing and while I know that the general refrain for Bogleheads is to hold on and not try to play the market, I wanted to know if anyone on the board is seriously considering a move to cash with VTSAX, VTI or any other related fund or ETF? Things *appear* significantly overvalued at the moment and I'm personally struggling to feel comfortable holding on for the ride!

Looking forward to your thoughts, all!
Trying to time the market isn't recommended. What is your current overall asset allocation (AA) right now?


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.
jebmke
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Re: VTSAX Owner > Anyone thinking of moving to cash for a bit?

Post by jebmke »

all the talking heads were predicting the 2021 top at S&P 4,100 a year ago.
When you discover that you are riding a dead horse, the best strategy is to dismount.
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Re: VTSAX Owner > Anyone thinking of moving to cash for a bit?

Post by SuperTrooper87 »

financialfreedom87 wrote: Wed Nov 17, 2021 10:04 am Things *appear* significantly overvalued at the moment and I'm personally struggling to feel comfortable holding on for the ride!

Looking forward to your thoughts, all!
Perhaps it’s time to reevaluate your AA and have a discussion about whether adjusting it would be appropriate.

Have you “won” the game? If so, there was a good post about the recently and the persons regrets for not adjusting.

Are you still accumulating? Does a potential crash significantly alter your near or long term plans?

I’m 34. I anticipate a few more crashes before I reach 60+. I don’t know when they’ll be, so I’m letting it ride as I think I’ll do more damage trying to time them.
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Re: VTSAX Owner > Anyone thinking of moving to cash for a bit?

Post by Silverado »

financialfreedom87 wrote: Wed Nov 17, 2021 10:04 am Hi all!

For a long term investor, VTSAX has proven to be a greaat investment. I am newer to investing and while I know that the general refrain for Bogleheads is to hold on and not try to play the market, I wanted to know if anyone on the board is seriously considering a move to cash with VTSAX, VTI or any other related fund or ETF? Things *appear* significantly overvalued at the moment and I'm personally struggling to feel comfortable holding on for the ride!

Looking forward to your thoughts, all!
Uh, no, not at all. If you are not comfortable with the potential (which will become actual at some point) of a 30-50% or more drop, you have the wrong asset allocation.

I will hold my seven figure position in VTSAX….until 12/5 when I will add to it. Then hold until 1/5 when….you get the picture.
dukeblue219
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Re: VTSAX Owner > Anyone thinking of moving to cash for a bit?

Post by dukeblue219 »

If I may borrow from the cinematic masterpiece that is Men In Black: "There's always an Arquillian Battle Cruiser, or a Corillian Death Ray, or an intergalactic plague that is about to wipe out all life on this miserable little planet, and the only way these people can get on with their happy lives is that they DO NOT KNOW ABOUT IT!"

The market is always overvalued, or crashing, or unstable, or suspiciously flat, and so on. The only way we can get through it is to ride it out. I don't disagree with you, but there's always SOME reason to go to cash. If we listened to that feeling we'd never get the gains.

Perhaps your AA is just too stock-heavy.
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Re: VTSAX Owner > Anyone thinking of moving to cash for a bit?

Post by ruralavalon »

financialfreedom87 wrote: Wed Nov 17, 2021 10:04 am Hi all!

For a long term investor, VTSAX has proven to be a greaat investment. I am newer to investing and while I know that the general refrain for Bogleheads is to hold on and not try to play the market, I wanted to know if anyone on the board is seriously considering a move to cash with VTSAX, VTI or any other related fund or ETF? Things *appear* significantly overvalued at the moment and I'm personally struggling to feel comfortable holding on for the ride!

Looking forward to your thoughts, all!
No, we are absolutely NOT going to cash. Never try to time the stock market.

If you are 100% stocks and "uncomfortable" then you need a fixed income allocation. Fixed income can include bonds, bond funds, I-bonds, CDs, a Stable Value Fund or Guaranteed Income Fund.
Last edited by ruralavalon on Wed Nov 17, 2021 10:37 am, edited 1 time in total.
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Re: VTSAX Owner > Anyone thinking of moving to cash for a bit?

Post by AnnetteLouisan »

I was thinking of it when I first arrived here at the forum in September. In fact, that was one of my first questions. Instead I increased the equity portion of my AA and am moving toward 30 percent. Turns out I’d been making a classic mistake by being so high in cash in the first place and having too low an AA. But it took me around 2 months and a lot of dialogue with patient BHers to really understand it.
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Re: VTSAX Owner > Anyone thinking of moving to cash for a bit?

Post by tibbitts »

financialfreedom87 wrote: Wed Nov 17, 2021 10:04 am I wanted to know if anyone on the board is seriously considering a move to cash with VTSAX, VTI or any other related fund or ETF? Things *appear* significantly overvalued at the moment and I'm personally struggling to feel comfortable holding on for the ride!
Not in terms of equities, but starting last year I bailed on traditional bond funds (GNMA, intermediate investment grade) and put that money into unrestricted TIAA Traditional at 3%. I slightly tweaked my 50% in equities toward international, although the domestic market has done so well that my percentage in international has actually dropped by 2% (to about 25% of equities.)
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Re: VTSAX Owner > Anyone thinking of moving to cash for a bit?

Post by AnnetteLouisan »

I knew the market was overvalued…….in 1996! So I basically stayed “safe” in cash and sacrificed millions in growth. Just terrible! I could be sipping a drink in the Maldives now instead of heading into my next zoom meeting at 11.
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Re: VTSAX Owner > Anyone thinking of moving to cash for a bit?

Post by iceport »

financialfreedom87 wrote: Wed Nov 17, 2021 10:04 am Hi all!

For a long term investor, VTSAX has proven to be a greaat investment. I am newer to investing and while I know that the general refrain for Bogleheads is to hold on and not try to play the market, I wanted to know if anyone on the board is seriously considering a move to cash with VTSAX, VTI or any other related fund or ETF? Things *appear* significantly overvalued at the moment and I'm personally struggling to feel comfortable holding on for the ride!

Looking forward to your thoughts, all!
The best way to reach investing goals is to avoid a few really big mistakes. Minor mistakes can usually be overcome with a little more time and/or additional savings. The big mistakes take a lot more of both — and create a lot more regret.

One of the biggest, most classic mistakes that can be made, always with the best of intentions, is to bail on equities after a big market crash.

Another less dramatic mistake, but one that can be just about as damaging, is selling way too early in anticipation of the next big crash.

(Chasing performance is another biggie.)

As an individual investor, I view my mission to be one of winning by not losing. One way to avoid losing is to refrain from making changes to your long term plan based on short term market conditions.

I hope you can hang on for the ride, financialfreedom87. Just like a roller coaster ride, even if you're terrified as you make the first long climb, anticipating your stomach hitting your throat on the way down, after the first few big drops you might actually learn to enjoy the ride. (But even if you don't, it's never a great idea to jump the ride mid-way through! :wink:)
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Fallible
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Re: VTSAX Owner > Anyone thinking of moving to cash for a bit?

Post by Fallible »

financialfreedom87 wrote: Wed Nov 17, 2021 10:04 am Hi all!
For a long term investor, VTSAX has proven to be a greaat investment. I am newer to investing and while I know that the general refrain for Bogleheads is to hold on and not try to play the market, I wanted to know if anyone on the board is seriously considering a move to cash with VTSAX, VTI or any other related fund or ETF? Things *appear* significantly overvalued at the moment and I'm personally struggling to feel comfortable holding on for the ride! ...
You don't want to invest based on what you think, feel, or predict what the market will do, i.e., based on what you can't know with any certainty. You want to invest based on what is right for you, including your ability, willingness, and need to take risk. Pro Boglehead Larry Swedroe has written a series on the latter three that appears in the BH wiki's pages on "Asset allocation," and "Risk tolerance." It's important reading for those of us who, like you, are "struggling to feel comfortable holding on for the ride." After 30-plus years in the stock market, I can say that struggle is always there in varying degrees, depending on how well we can determine our personal tolerance for risk during a market crash or volatility.

https://www.bogleheads.org/wiki/Asset_allocation
https://www.bogleheads.org/wiki/Risk_tolerance
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Re: VTSAX Owner > Anyone thinking of moving to cash for a bit?

Post by Wiggums »

We are staying invested. It’s impossible to pick the market top or bottom with any consistency. As an index investor, we don’t focus on the market level or short term movements. You should be encouraged by the consumer spending and economic recovery. Some of the interest rate hikes have been priced into the stock market. Investors will be more excited about bonds once the rates improve. Our AA is 65/35 and we are not concerned.
Last edited by Wiggums on Wed Nov 17, 2021 2:52 pm, edited 2 times in total.
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Re: VTSAX Owner > Anyone thinking of moving to cash for a bit?

Post by 3funder »

I hold 50% of my equities in international stocks. I never worry.
Global stocks, US bonds, and time.
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Re: VTSAX Owner > Anyone thinking of moving to cash for a bit?

Post by climber2020 »

financialfreedom87 wrote: Wed Nov 17, 2021 10:04 am Hi all!

For a long term investor, VTSAX has proven to be a greaat investment. I am newer to investing and while I know that the general refrain for Bogleheads is to hold on and not try to play the market, I wanted to know if anyone on the board is seriously considering a move to cash with VTSAX, VTI or any other related fund or ETF? Things *appear* significantly overvalued at the moment and I'm personally struggling to feel comfortable holding on for the ride!

Looking forward to your thoughts, all!
Here is one of my favorite threads that I like to resurrect every now and then: Retreat to cash
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burgrat
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Re: VTSAX Owner > Anyone thinking of moving to cash for a bit?

Post by burgrat »

That's funny, I have been thinking of moving more of my cash to VTSAX!
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Re: VTSAX Owner > Anyone thinking of moving to cash for a bit?

Post by Ferdinand2014 »

financialfreedom87 wrote: Wed Nov 17, 2021 10:04 am Hi all!

For a long term investor, VTSAX has proven to be a greaat investment. I am newer to investing and while I know that the general refrain for Bogleheads is to hold on and not try to play the market, I wanted to know if anyone on the board is seriously considering a move to cash with VTSAX, VTI or any other related fund or ETF? Things *appear* significantly overvalued at the moment and I'm personally struggling to feel comfortable holding on for the ride!

Looking forward to your thoughts, all!
No, I am not considering this.
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nalor511
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Re: VTSAX Owner > Anyone thinking of moving to cash for a bit?

Post by nalor511 »

No. :moneybag
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KingRiggs
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Re: VTSAX Owner > Anyone thinking of moving to cash for a bit?

Post by KingRiggs »

I have some cash in my wallet...it's worth less today than it was yesterday...

I think I'll just stick to my AA. :sharebeer
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Re: VTSAX Owner > Anyone thinking of moving to cash for a bit?

Post by UpperNwGuy »

financialfreedom87 wrote: Wed Nov 17, 2021 10:04 am For a long term investor, VTSAX has proven to be a greaat investment. I am newer to investing and while I know that the general refrain for Bogleheads is to hold on and not try to play the market, I wanted to know if anyone on the board is seriously considering a move to cash with VTSAX, VTI or any other related fund or ETF? Things *appear* significantly overvalued at the moment and I'm personally struggling to feel comfortable holding on for the ride!
I am very comfortable holding on for the ride. Why aren't you? If the market takes a dive, you have a lot more time to recover than an old guy like me.

By the way, my IPS says "ignore valuations."
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Re: VTSAX Owner > Anyone thinking of moving to cash for a bit?

Post by dratkinson »

No.

I should be moving some VTSAX into bonds to stay in balance. But I don't want to pay the tax to do so, so I buy bonds with new money; it's the cheapest move tax-wise.

But it's okay as I wrote into my IPS (Investment Policy Statement) that I'd allow my AA to skew 10 points either way. At the time I was thinking about buying low into a market decline, but I suppose it also work for when the market is overvalued.
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Re: VTSAX Owner > Anyone thinking of moving to cash for a bit?

Post by samsoes »

Ladies and gentlemen, the OP has not chimed-in with subsequent posts. I suggest we step back until s/he does. Clearly, a new account with only two posts at this point. Could be a troll.
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Topic Author
financialfreedom87
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Re: VTSAX Owner > Anyone thinking of moving to cash for a bit?

Post by financialfreedom87 »

hi all - no troll here but did have some personal travel. i am very grateful for the insights and inputs and so am responding in earnest to you all. and am especially thankful for the quick replies, as I have been tardy.

@exodusNH - not sure if your question on when I would get back in was rhetorical - but it made a great point...and did remind me that I have to rember you can't time the market...especially with the long term view i need to have

@pkcrafter - re: timing the market, very clear! right now, i have my company 401k and SEP for my business in target date funds...but my taxable vanguard brokerage account is exclusively VTSAX. I do want to take a critical eye to my allocations across all. if you have any suggestions, I am open to what you might be interested in sharing.

@jebmke - "experts" right??

@SuperTrooper87 - I too am 34 and your note about expecting a few crashes is much appreciated...better to brace for that now. i have enough liquid cash elsewhere that a major crash would not affect my near and mid term plans, so i think the point of reviewing AA and getting some hygiene across retirement plans and brokerage accounts makes sense. curious your broad strategy at this age and long term considering we are of the same age?

@Silverado - my brother in law always says a correction just means stocks are "on sale" - appreciate the reinforcement here!
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financialfreedom87
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Re: VTSAX Owner > Anyone thinking of moving to cash for a bit?

Post by financialfreedom87 »

ruralavalon wrote: Wed Nov 17, 2021 10:34 am
financialfreedom87 wrote: Wed Nov 17, 2021 10:04 am Hi all!

For a long term investor, VTSAX has proven to be a greaat investment. I am newer to investing and while I know that the general refrain for Bogleheads is to hold on and not try to play the market, I wanted to know if anyone on the board is seriously considering a move to cash with VTSAX, VTI or any other related fund or ETF? Things *appear* significantly overvalued at the moment and I'm personally struggling to feel comfortable holding on for the ride!

Looking forward to your thoughts, all!
No, we are absolutely NOT going to cash. Never try to time the stock market.

If you are 100% stocks and "uncomfortable" then you need a fixed income allocation. Fixed income can include bonds, bond funds, I-bonds, CDs, a Stable Value Fund or Guaranteed Income Fund.
Message received! I am checking into options for fixed income.
dukeblue219 wrote: Wed Nov 17, 2021 10:25 am If I may borrow from the cinematic masterpiece that is Men In Black: "There's always an Arquillian Battle Cruiser, or a Corillian Death Ray, or an intergalactic plague that is about to wipe out all life on this miserable little planet, and the only way these people can get on with their happy lives is that they DO NOT KNOW ABOUT IT!"

The market is always overvalued, or crashing, or unstable, or suspiciously flat, and so on. The only way we can get through it is to ride it out. I don't disagree with you, but there's always SOME reason to go to cash. If we listened to that feeling we'd never get the gains.

Perhaps your AA is just too stock-heavy.
I have stayed out of bonds but I am going to do my research on increasing my allocation from, well, zero...
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windaar
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Re: VTSAX Owner > Anyone thinking of moving to cash for a bit?

Post by windaar »

financialfreedom87 wrote: Wed Nov 17, 2021 10:04 amI know that the general refrain for Bogleheads is to hold on and not try to play the market
Not a "general refrain" but a core component of Boglehead philosophy. And one that has worked very well for me. Make sure your AA is in line with your risk allocation and then stay the course!
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Re: VTSAX Owner > Anyone thinking of moving to cash for a bit?

Post by esteen »

I am not thinking of moving to cash, and I agree with the other posters that this is a perfect time to re-evaluate your long term asset allocation to ensure you sleep well at night, crash or no crash. Because a crash will happen at some point, and it'll probably be when you least expect it.
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Re: VTSAX Owner > Anyone thinking of moving to cash for a bit?

Post by Nicolas »

No, not selling. Whenever I’ve done this I’ve ultimately lost. As others have said, you need to be right twice and I’ve never been right even once.
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Re: VTSAX Owner > Anyone thinking of moving to cash for a bit?

Post by Candor »

Going to cash is almost never a good idea. If you're "struggling to feel comfortable" then you probably have the wrong AA. It only gets harder the more $$ you have and the closer to retirement you get especially if you have an inappropriate AA.

20-30 years from now you will likely be wishing you had bought more at these low levels.
The fool, with all his other faults, has this also - he is always getting ready to live. - Epicurus
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Re: VTSAX Owner > Anyone thinking of moving to cash for a bit?

Post by Beensabu »

No. US Total Market is ~10-15% of my portfolio. There's a funny thing that happens when you slice things up to ~20% chunks or so, with different bits meant to address different things. You sort of stop caring so much about what happens to one part of it.

Now, if it was 100%? I don't know how anybody is doing that without being a nervous wreck.
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Re: VTSAX Owner > Anyone thinking of moving to cash for a bit?

Post by Kookaburra »

Cash represents a guaranteed real loss of 6% these days. That doesn’t sound appealing to me.
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Re: VTSAX Owner > Anyone thinking of moving to cash for a bit?

Post by arcticpineapplecorp. »

financialfreedom87 wrote: Wed Nov 17, 2021 10:04 am Hi all!

For a long term investor, VTSAX has proven to be a greaat investment. I am newer to investing and while I know that the general refrain for Bogleheads is to hold on and not try to play the market, I wanted to know if anyone on the board is seriously considering a move to cash with VTSAX, VTI or any other related fund or ETF? Things *appear* significantly overvalued at the moment and I'm personally struggling to feel comfortable holding on for the ride!

Looking forward to your thoughts, all!
your question supposes the decision must be of the all or nothing persuasion. As in, either in the market, or not in the market (in cash). How many things in life are all or nothing, black or white? Is investing to be all or nothing?

Or is investing about determining how much risk you have the need, ability and willingness to take. You put that amount of assets at risk, and keep other assets safe. You have an asset allocation. You determine how much to put at risk based on those three factors.

You might not have the need to have 100% in stocks. What if you can meet your goals with a lower amount in stocks? Why would you put more in stocks than you need? If you can meet your goal with 60/40 for instance, why take more risk than that?

If you don't have the ability to take the risk (job security, outside savings to rely upon, debt levels and so on) of 100% in stock, you shouldn't have 100% in stock. That doesn't mean you have to have 0% in stock either.

If you don't have the willingness for 100% in stocks, then what lower amount? 90%? 80%? 70%, and so on.

regarding struggling to feel comfortable holding on for the ride, it's been said that if you want the return of the market, you really do have to take the risk. If you don't want to take the risk, that's fine. But then you can't have the returns. That's how it works. If the returns were certain, there'd be no risk. But if there wasn't risk, the returns would be low. The returns aren't certain, which is why there's risk, which is why the returns tend to be higher than other less risky assets.

perhaps it's time to revisit your IPS, if you have one. If not, you should write an IPS or you'll be wanting to change your portfolio everytime the market is higher or lower than you think it ought to be:
https://www.bogleheads.org/wiki/IPS

The IPS should keep you on track.
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Re: VTSAX Owner > Anyone thinking of moving to cash for a bit?

Post by dogagility »

financialfreedom87 wrote: Wed Nov 17, 2021 10:04 am I wanted to know if anyone on the board is seriously considering a move to cash with VTSAX, VTI or any other related fund or ETF?
That's a definite no for me.
financialfreedom87 wrote: Wed Nov 17, 2021 10:04 am Things *appear* significantly overvalued at the moment and I'm personally struggling to feel comfortable holding on for the ride!
My family does not base our investment decisions on feelings, appearances, valuations, or similar ilk. Tinkering and market timing is very likely to reduce your portfolio return over the long term.

I suggest you think about the long term (decades) and choose an asset allocation you can hold for the long term. At your age (34), I assume you won't be retiring for about another 25 years. With this long investment horizon, an equity asset allocation between 70-100% is typical. Just understand that market crashes are normal and don't panic sell.
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Re: VTSAX Owner > Anyone thinking of moving to cash for a bit?

Post by ToolTimeFlannel »

[/quote]
Not in terms of equities, but starting last year I bailed on traditional bond funds (GNMA, intermediate investment grade) and put that money into unrestricted TIAA Traditional at 3%. I slightly tweaked my 50% in equities toward international, although the domestic market has done so well that my percentage in international has actually dropped by 2% (to about 25% of equities.)
[/quote]

Is that money now tied up for 10 years? Are you in/close to retirement?
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Re: VTSAX Owner > Anyone thinking of moving to cash for a bit?

Post by virgingorda »

I would do so only if I needed the money for a big expenditure in the near future. If you are really getting cold feet, you could sell some of your "winnings" but be sure you have held what you sell for more than a year so as to have a (likely) smaller impact on your tax bill.
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Re: VTSAX Owner > Anyone thinking of moving to cash for a bit?

Post by Parkinglotracer »

Mr Bogle rolls over in his grave …

I did re balance.
sizzlefuzz
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Re: VTSAX Owner > Anyone thinking of moving to cash for a bit?

Post by sizzlefuzz »

Absolutely not... given my age/time horizon I'm staying the course with what I've got. If I were 10 years older I would look at taking some risk off the table and moving more to fixed income, but would def stay in the market either way as opposed to moving to cash.
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Re: VTSAX Owner > Anyone thinking of moving to cash for a bit?

Post by JSPECO9 »

You should reconsider your asset allocation. Do you hold the three-fund portfolio?
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Re: VTSAX Owner > Anyone thinking of moving to cash for a bit?

Post by ruralavalon »

financialfreedom87 wrote: Mon Nov 22, 2021 6:12 pm
ruralavalon wrote: Wed Nov 17, 2021 10:34 am
financialfreedom87 wrote: Wed Nov 17, 2021 10:04 am Hi all!

For a long term investor, VTSAX has proven to be a greaat investment. I am newer to investing and while I know that the general refrain for Bogleheads is to hold on and not try to play the market, I wanted to know if anyone on the board is seriously considering a move to cash with VTSAX, VTI or any other related fund or ETF? Things *appear* significantly overvalued at the moment and I'm personally struggling to feel comfortable holding on for the ride!

Looking forward to your thoughts, all!
No, we are absolutely NOT going to cash. Never try to time the stock market.

If you are 100% stocks and "uncomfortable" then you need a fixed income allocation. Fixed income can include bonds, bond funds, I-bonds, CDs, a Stable Value Fund or Guaranteed Income Fund.
Message received! I am checking into options for fixed income.
dukeblue219 wrote: Wed Nov 17, 2021 10:25 am If I may borrow from the cinematic masterpiece that is Men In Black: "There's always an Arquillian Battle Cruiser, or a Corillian Death Ray, or an intergalactic plague that is about to wipe out all life on this miserable little planet, and the only way these people can get on with their happy lives is that they DO NOT KNOW ABOUT IT!"

The market is always overvalued, or crashing, or unstable, or suspiciously flat, and so on. The only way we can get through it is to ride it out. I don't disagree with you, but there's always SOME reason to go to cash. If we listened to that feeling we'd never get the gains.

Perhaps your AA is just too stock-heavy.
I have stayed out of bonds but I am going to do my research on increasing my allocation from, well, zero...
The first place to look is in any available employer plan (401k, 403b, 457b, TSP). Look for a short-term or intermediate-term bond fund with good credit quality and low expense ratio, or a Stable Value Fund or Guaranteed Income Fund which pays a reasonable interest rate, or both.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
blueberrypi
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Re: VTSAX Owner > Anyone thinking of moving to cash for a bit?

Post by blueberrypi »

I think about it all the time, but I don't. Doing nothing IS my strategy.
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Alto Astral
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Re: VTSAX Owner > Anyone thinking of moving to cash for a bit?

Post by Alto Astral »

I sold $50k worth today. Part of it will go to i bonds
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burritoLover
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Re: VTSAX Owner > Anyone thinking of moving to cash for a bit?

Post by burritoLover »

If it were that easy to determine when a crash was eminent due to “significant overvalaution”, then we’d all happily move our portfolio to cash and wait it out and then get back in at the exact optimal time. No one would be talking about having to weather a 50% losses in equities. It would just be a normal portfolio decision. Unfortunately that is not reality and you (or even financial geniuses) making decisions to move to all-cash rarely ever works out.
"Your money is like a bar of soap. The more you handle it, the less you’ll have." - Gene Fama
000
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Re: VTSAX Owner > Anyone thinking of moving to cash for a bit?

Post by 000 »

I don't think we've reached the peak yet, but I wouldn't bet bigly on it.
Capitulation of bears is part of the market topping process.
Triple digit golfer
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Re: VTSAX Owner > Anyone thinking of moving to cash for a bit?

Post by Triple digit golfer »

Absolutely not. I will not make any asset allocation changes based on valuations. I will only change my asset allocation per my IPS, which states to rebalance when my allocation is off 3% and to ignore valuations, interest rates, and any other market conditions.
mikejuss
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Re: VTSAX Owner > Anyone thinking of moving to cash for a bit?

Post by mikejuss »

No--but it sounds like you need to give your asset allocation a hard think-through.
stimulacra
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Re: VTSAX Owner > Anyone thinking of moving to cash for a bit?

Post by stimulacra »

What does "moving to cash" mean exactly?

I'm more inclined to rethink my asset allocation than liquidating everything in my brokerage and going to cash.
casun
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Re: VTSAX Owner > Anyone thinking of moving to cash for a bit?

Post by casun »

no, i am not thinking of moving to cash.
NostraHistoria
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Re: VTSAX Owner > Anyone thinking of moving to cash for a bit?

Post by NostraHistoria »

In investing, you buy and hold forever.
averagedude
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Re: VTSAX Owner > Anyone thinking of moving to cash for a bit?

Post by averagedude »

Moving to cash pretty much means that you are going to get a negative real return of minus 6 percent in the short term. No thank you.
rockstar
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Re: VTSAX Owner > Anyone thinking of moving to cash for a bit?

Post by rockstar »

Has the market come even close to hitting the 200 or 300 day moving averages? Nope.

We're having a couple of down days. If you want to get out, make it based on actual metrics, not gut feel. And most important, if you do get out, make sure you also have metrics to get back into the market. There have been posts here by folks that got out in March 2020 that still haven't bought back into the market. Have a solid plan that you can follow.

Otherwise, find a good AA that works for you and buy and hold forever.
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