Where to go in this investing environment

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TominToledo
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Joined: Tue Dec 01, 2020 9:10 pm
Location: Toledo, OH

Where to go in this investing environment

Post by TominToledo »

I'm 55 and have recently taken some profits on long term stocks that had appreciated by 100% or more. In many cases, I sold the amount equal to my original investment, so I still own many of these dividend paying companies. I am still about 90% invested in stocks (about 2.5M) and 10% cash from the recent sales. Given how poorly bonds are doing in general, I'm interested to know what other gainfully employed 55 year old men/woman are doing to maintain decent returns and whether they are shifting their investments toward a more conservative mix at this age. I owe 300K on a 30 yr fixed 2% loan. That is our only debt. We have 4 children, 2 are post college and well employed and the other two are in college with very good prospects for finding work. The out of pocket college costs remaining will be minimal. I max out my 401k and the company match is 16% which is intended to replace a significant pension that was eliminated in bankruptcy 15 years ago. Future PBGC payments in retirement will be less than $750 per month, so not much. The bottom line is this....should I still be 100p in stocks with retirement 10 years away? I know in the past the answer would be 60/40 or 50/50 Stocks/Bonds at this point in my life. But clearly the landscape has changed and I'm curious to know what my peers are thinking about this. Thanks in advance for your thoughts. Tom
Wanderingwheelz
Posts: 1523
Joined: Mon Mar 04, 2019 9:52 am

Re: Where to go in this investing environment

Post by Wanderingwheelz »

At age 55 with $2.5MM I think I’d be at least 10% in cash/bonds. Some here are 40%-60% cash/bonds at the age and liquid net worth.

The fact that you sold stocks based on price/valuation might be an indication that your asset allocation isn’t suitable any longer.
chassis
Posts: 643
Joined: Tue Mar 24, 2020 4:28 pm

Re: Where to go in this investing environment

Post by chassis »

@TominToledo

100% equities plus cash.

Equities for me means stocks or stock funds.

I fit a number of your demographic criteria.
Last edited by chassis on Mon Nov 22, 2021 9:53 pm, edited 1 time in total.
livesoft
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Re: Where to go in this investing environment

Post by livesoft »

Maybe this is a bond-buying opportunity? How would one know?
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rossington
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Re: Where to go in this investing environment

Post by rossington »

TominToledo wrote: Mon Nov 22, 2021 5:27 pm I'm 55 and have recently taken some profits on long term stocks that had appreciated by 100% or more. In many cases, I sold the amount equal to my original investment, so I still own many of these dividend paying companies. I am still about 90% invested in stocks (about 2.5M) and 10% cash from the recent sales. Given how poorly bonds are doing in general, I'm interested to know what other gainfully employed 55 year old men/woman are doing to maintain decent returns and whether they are shifting their investments toward a more conservative mix at this age. I owe 300K on a 30 yr fixed 2% loan. That is our only debt. We have 4 children, 2 are post college and well employed and the other two are in college with very good prospects for finding work. The out of pocket college costs remaining will be minimal. I max out my 401k and the company match is 16% which is intended to replace a significant pension that was eliminated in bankruptcy 15 years ago. Future PBGC payments in retirement will be less than $750 per month, so not much. The bottom line is this....should I still be 100p in stocks with retirement 10 years away? I know in the past the answer would be 60/40 or 50/50 Stocks/Bonds at this point in my life. But clearly the landscape has changed and I'm curious to know what my peers are thinking about this. Thanks in advance for your thoughts. Tom
This should be completely obvious, but I'll remind you...
You should be fine assuming your current and future income will cover all your necessary expenses including the mortgage. The portfolio, even if stocks drop by 50% still should help in case of an emergency. At 90/10 you have a lot of risk here.
BUT when you retire and your working income has stopped...and you are still 90/10...could you live with a 50% drop in stocks?
(Bonds are part of a portfolio to mitigate the effects of stock volatility....not to significantly increase the size of one's portfolio).
"Success is going from failure to failure without loss of enthusiasm." Winston Churchill.
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Wiggums
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Joined: Thu Jan 31, 2019 8:02 am

Re: Where to go in this investing environment

Post by Wiggums »

I retired at 56 and still investing in the market. We spent less during the pandemic. Same with our college age kids. I never sold to take profits. When will you get back in? Maybe that says your AA is too high as you get closer to retirement age?
Last edited by Wiggums on Sat Nov 27, 2021 6:52 pm, edited 3 times in total.
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Ed 2
Posts: 2022
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Re: Where to go in this investing environment

Post by Ed 2 »

I am 51 years old . My equity / bond -fixed income allocation approximately 90/10. Not going to change a thing , even if the sky is falling.
It’s all individual, your life expectancy, risk tolerance, investment experience...
My timeframe to invest is infinity. Why? Because the size of my portfolio and projected portfolio will be just enough and I am investing now for my kids and their kids.
When you will be 75-80 you may ask your 55 years self “ why I was worry about short term things and questioning myself with every DOW tick?”
Again, you trying to time the market, no matter your excuses are, go back to YouTube videos with Jack.
P.s. I am not only investing in equity’s and bonds, I invest in my health. My equity/ health allocation is 50/50. Running 3 miles a day, 8 miles every Sunday. You should worry first about health conditions and risks , then about what market overvalued or undervalued.
"The fund industry doesn't have a lot of heroes, but he (Bogle) is one of them," Russ Kinnel
vas
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Re: Where to go in this investing environment

Post by vas »

Risk tolerance is a personal thing but 90% equities and $300K debt at 55 must take a stout heart. You mentioned retiring in 10 years but you never know. A lot of things can change in 10 years and you might want an earlier exit plan. I'm 57, similar investable assets, no debt, and an asset allocation of 65/45. No intention of working another ten years; maybe 2 or 3. Your returns lately have undoubtedly out paced mine, but mine have been decent and I'm meeting my goals with far less market risk. I'd recommend considering a range of scenarios and make sure you're comfortable with the downside risk.
I'm Good Enough, I'm Smart Enough, and Doggone It, People Like Me!
chassis
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Re: Where to go in this investing environment

Post by chassis »

Ed 2 wrote: Tue Nov 23, 2021 6:40 am I am 51 years old . My equity / bond -fixed income allocation approximately 90/10. Not going to change a thing , even if the sky is falling.
It’s all individual, your life expectancy, risk tolerance, investment experience...
My timeframe to invest is infinity. Why? Because the size of my portfolio and projected portfolio will be just enough and I am investing now for my kids and their kids.
When you will be 75-80 you may ask your 55 years self “ why I was worry about short term things and questioning myself with every DOW tick?”
Again, you trying to time the market, no matter your excuses are, go back to YouTube videos with Jack.
P.s. I am not only investing in equity’s and bonds, I invest in my health. My equity/ health allocation is 50/50. Running 3 miles a day, 8 miles every Sunday. You should worry first about health conditions and risks , then about what market overvalued or undervalued.
This is a great post.

Investing horizon = perpetuity

Health matters (don’t be fat, control what you control - diet and exercise)

Take the long view
mikejuss
Posts: 1437
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Re: Where to go in this investing environment

Post by mikejuss »

Don't overthink this: you speak of "decent returns." Well, of late, stocks have been providing positively indecent returns that aren't going to last forever. Take some of those gains and purchase bonds. Remember this adage: be greedy when others are cautious and be cautious when others are greedy. Today's stock returns call for the latter approach.
vas
Posts: 288
Joined: Thu Mar 06, 2014 12:51 pm

Re: Where to go in this investing environment

Post by vas »

OP may enjoy this thread as well: viewtopic.php?f=1&t=363081
I'm Good Enough, I'm Smart Enough, and Doggone It, People Like Me!
Ed 2
Posts: 2022
Joined: Sat May 15, 2010 9:34 am

Re: Where to go in this investing environment

Post by Ed 2 »

chassis wrote: Tue Nov 23, 2021 1:49 pm
Ed 2 wrote: Tue Nov 23, 2021 6:40 am I am 51 years old . My equity / bond -fixed income allocation approximately 90/10. Not going to change a thing , even if the sky is falling.
It’s all individual, your life expectancy, risk tolerance, investment experience...
My timeframe to invest is infinity. Why? Because the size of my portfolio and projected portfolio will be just enough and I am investing now for my kids and their kids.
When you will be 75-80 you may ask your 55 years self “ why I was worry about short term things and questioning myself with every DOW tick?”
Again, you trying to time the market, no matter your excuses are, go back to YouTube videos with Jack.
P.s. I am not only investing in equity’s and bonds, I invest in my health. My equity/ health allocation is 50/50. Running 3 miles a day, 8 miles every Sunday. You should worry first about health conditions and risks , then about what market overvalued or undervalued.
This is a great post.

Investing horizon = perpetuity

Health matters (don’t be fat, control what you control - diet and exercise)

Take the long view
absolutely, most of us bogleheads are fixated regarding risks at the stock market, same time I can see most of us obese and have very poor diet. Having bad health and good investment habits doesn’t make sense to me personally.
"The fund industry doesn't have a lot of heroes, but he (Bogle) is one of them," Russ Kinnel
student
Posts: 6050
Joined: Fri Apr 03, 2015 6:58 am

Re: Where to go in this investing environment

Post by student »

I am mid-50's. My target is 60/40 but I am currently 62% stocks, 30% TIAA Traditional, 2% bonds and 6% cash.
BernardShakey
Posts: 483
Joined: Tue Jun 25, 2019 10:52 pm
Location: CA

Re: Where to go in this investing environment

Post by BernardShakey »

Ed 2 wrote: Tue Nov 23, 2021 4:33 pm
chassis wrote: Tue Nov 23, 2021 1:49 pm
Ed 2 wrote: Tue Nov 23, 2021 6:40 am I am 51 years old . My equity / bond -fixed income allocation approximately 90/10. Not going to change a thing , even if the sky is falling.
It’s all individual, your life expectancy, risk tolerance, investment experience...
My timeframe to invest is infinity. Why? Because the size of my portfolio and projected portfolio will be just enough and I am investing now for my kids and their kids.
When you will be 75-80 you may ask your 55 years self “ why I was worry about short term things and questioning myself with every DOW tick?”
Again, you trying to time the market, no matter your excuses are, go back to YouTube videos with Jack.
P.s. I am not only investing in equity’s and bonds, I invest in my health. My equity/ health allocation is 50/50. Running 3 miles a day, 8 miles every Sunday. You should worry first about health conditions and risks , then about what market overvalued or undervalued.
This is a great post.

Investing horizon = perpetuity

Health matters (don’t be fat, control what you control - diet and exercise)

Take the long view
absolutely, most of us bogleheads are fixated regarding risks at the stock market, same time I can see most of us obese and have very poor diet. Having bad health and good investment habits doesn’t make sense to me personally.
Just make sure you cross train weekly so your love of running isn't cut short by injury. Speaking from experience. Something like 80% of older runners get injured and many have to give it up. And read the study by O'Keefe from a few years back. Eye opener. Keep the miles below 25 per week and steady state pace above 7:30 / mile. I do agree with your sentiments though.
An important key to investing is having a well-calibrated sense of your future regret.
Ed 2
Posts: 2022
Joined: Sat May 15, 2010 9:34 am

Re: Where to go in this investing environment

Post by Ed 2 »

BernardShakey wrote: Tue Nov 23, 2021 5:08 pm
Ed 2 wrote: Tue Nov 23, 2021 4:33 pm
chassis wrote: Tue Nov 23, 2021 1:49 pm
Ed 2 wrote: Tue Nov 23, 2021 6:40 am I am 51 years old . My equity / bond -fixed income allocation approximately 90/10. Not going to change a thing , even if the sky is falling.
It’s all individual, your life expectancy, risk tolerance, investment experience...
My timeframe to invest is infinity. Why? Because the size of my portfolio and projected portfolio will be just enough and I am investing now for my kids and their kids.
When you will be 75-80 you may ask your 55 years self “ why I was worry about short term things and questioning myself with every DOW tick?”
Again, you trying to time the market, no matter your excuses are, go back to YouTube videos with Jack.
P.s. I am not only investing in equity’s and bonds, I invest in my health. My equity/ health allocation is 50/50. Running 3 miles a day, 8 miles every Sunday. You should worry first about health conditions and risks , then about what market overvalued or undervalued.
This is a great post.

Investing horizon = perpetuity

Health matters (don’t be fat, control what you control - diet and exercise)

Take the long view
absolutely, most of us bogleheads are fixated regarding risks at the stock market, same time I can see most of us obese and have very poor diet. Having bad health and good investment habits doesn’t make sense to me personally.
Just make sure you cross train weekly so your love of running isn't cut short by injury. Speaking from experience. Something like 80% of older runners get injured and many have to give it up. And read the study by O'Keefe from a few years back. Eye opener. Keep the miles below 25 per week and steady state pace above 7:30 / mile. I do agree with your sentiments though.
I know. I am running marathons))
"The fund industry doesn't have a lot of heroes, but he (Bogle) is one of them," Russ Kinnel
dogagility
Posts: 1873
Joined: Fri Feb 24, 2017 6:41 am

Re: Where to go in this investing environment

Post by dogagility »

TominToledo wrote: Mon Nov 22, 2021 5:27 pm I'm 55 and have recently taken some profits on long term stocks that had appreciated by 100% or more. In many cases, I sold the amount equal to my original investment, so I still own many of these dividend paying companies. I am still about 90% invested in stocks (about 2.5M) and 10% cash from the recent sales. Given how poorly bonds are doing in general, I'm interested to know what other gainfully employed 55 year old men/woman are doing to maintain decent returns and whether they are shifting their investments toward a more conservative mix at this age. I owe 300K on a 30 yr fixed 2% loan. That is our only debt. We have 4 children, 2 are post college and well employed and the other two are in college with very good prospects for finding work. The out of pocket college costs remaining will be minimal. I max out my 401k and the company match is 16% which is intended to replace a significant pension that was eliminated in bankruptcy 15 years ago. Future PBGC payments in retirement will be less than $750 per month, so not much. The bottom line is this....should I still be 100p in stocks with retirement 10 years away? I know in the past the answer would be 60/40 or 50/50 Stocks/Bonds at this point in my life. But clearly the landscape has changed and I'm curious to know what my peers are thinking about this. Thanks in advance for your thoughts. Tom
Clearly? This time is not different... I don't base long-term investment decisions on current feelings.

10 years from retirement with a 2.5 million dollar portfolio with a 90:10 asset allocation? That's aggressive but within the realm of reasonable.

You're taking on additional (unwarranted) risk by being invested in individual stocks and not index funds.

Suggest modeling your retirement spend in relationship to your portfolio size across different asset allocations. Then choose an appropriate asset allocation based upon that information.
The more flexibility you have the less you need to know what happens next. -- Morgan Housel
RubyTuesday
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Joined: Fri Oct 19, 2012 11:24 am

Re: Where to go in this investing environment

Post by RubyTuesday »

There’s a lot of unsolicited health advice in this thread.

OP, AA is personal based on need and ability to take risk. 90/10 would be too risky for me that close to planned retirement, but difficult for anyone to advise without more info on expenses in addition to assets and debts.
“Doing nothing is better than being busy doing nothing.” – Lao Tzu
livesoft
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Re: Where to go in this investing environment

Post by livesoft »

livesoft wrote: Mon Nov 22, 2021 6:53 pm Maybe this is a bond-buying opportunity? How would one know?
Total US Bond Market Index ETF is up about 1% since one could have bought after the above statement. :twisted:
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Sandtrap
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Re: Where to go in this investing environment

Post by Sandtrap »

TominToledo wrote: Mon Nov 22, 2021 5:27 pm I'm 55
and have recently taken some profits on long term stocks that had appreciated by 100% or more. In many cases, I sold the amount equal to my original investment, so

I still own many of these dividend paying companies.

I am still about 90% invested in stocks (about 2.5M) and 10% cash from the recent sales.

Given how poorly bonds are doing in general, I'm interested to know what other gainfully employed 55 year old men/woman are doing to maintain decent returns and whether they are shifting their investments toward a more conservative mix at this age.

I owe 300K on a 30 yr fixed 2% loan. That is our only debt.

We have 4 children, 2 are post college and well employed and the other two are in college with very good prospects for finding work. The out of pocket college costs remaining will be minimal.

I max out my 401k and the company match is 16% which is intended to replace a significant pension that was eliminated in bankruptcy 15 years ago.

Future PBGC payments in retirement will be less than $750 per month, so not much.

The bottom line is this....should I still be 100p in stocks with retirement 10 years away?

I know in the past the answer would be 60/40 or 50/50 Stocks/Bonds at this point in my life.


But clearly the landscape has changed and I'm curious to know what my peers are thinking about this.

Thanks in advance for your thoughts. Tom
On topic and Actionable:

Your narrative was spaced above to parse out the information.
You can edit your original post using the "pencil icon" to this format if you want a portfolio review or asking a question in that context.
Asking Portfolio Questions
https://www.bogleheads.org/forum/viewt ... =1&t=6212

1. Per a portfolio review:
Read: "The Ages of the Investor: Life Cycle Investing" by Bernstein. (not the bears).
https://smile.amazon.com/Ages-Investor- ... =ABIS_BOOK

2. If your retirement is 10 years away, you ask "should you be 100% in stocks/equities?
Anything between 80/20 and 30/70 depending on; your pension, SS, Annuity income, portfolio size and withdrawal rate, outside income streams, etc.
Without your "portfolio review" format and the missing information, no concrete suggestions can be had without assumptions.

3. What others are doing relative to today's investing environment depends on their own IPS. Have you done this for yourself?
Define General Investment Goals and Objectives (what is your plan?)
https://www.bogleheads.org/wiki/Invest ... statement
IPS Statement Worksheet PDF at Morningstar
http://news.morningstar.com/pdfs/inves ... pr2016.pdf

I hope this is helpful.
j :D
Wiki Bogleheads Wiki: Everything You Need to Know
ColoradoRick
Posts: 152
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Re: Where to go in this investing environment

Post by ColoradoRick »

TominToledo wrote: Mon Nov 22, 2021 5:27 pm I'm 55 and have recently taken some profits on long term stocks that had appreciated by 100% or more. In many cases, I sold the amount equal to my original investment, so I still own many of these dividend paying companies. I am still about 90% invested in stocks (about 2.5M) and 10% cash from the recent sales. Given how poorly bonds are doing in general, I'm interested to know what other gainfully employed 55 year old men/woman are doing to maintain decent returns and whether they are shifting their investments toward a more conservative mix at this age. I owe 300K on a 30 yr fixed 2% loan. That is our only debt. We have 4 children, 2 are post college and well employed and the other two are in college with very good prospects for finding work. The out of pocket college costs remaining will be minimal. I max out my 401k and the company match is 16% which is intended to replace a significant pension that was eliminated in bankruptcy 15 years ago. Future PBGC payments in retirement will be less than $750 per month, so not much. The bottom line is this....should I still be 100p in stocks with retirement 10 years away? I know in the past the answer would be 60/40 or 50/50 Stocks/Bonds at this point in my life. But clearly the landscape has changed and I'm curious to know what my peers are thinking about this. Thanks in advance for your thoughts. Tom
Hey Tom in Toledo! I was born in Toledo and raised in West End (near Sylvania & Bennett the old Dana plant.) Feel free to PM if the mood strikes you. Looks like you've done great. Only you can know what your risk tolerance is, but in 2009 at age 59, I was 80/20 with individual stocks and our net worth dropped 40%. NOT FUN. So when I retired at 62-1/2 I had dialed it down to 50/50 which enabled me to sleep at night. I have dialed it back up to 65/35 and we have 10 yrs in CDs/cash. Low returns don't bother me that much because stocks have succeeded beyond wildest dreams. Have a CD ladder where proceeds have gone to money market as I didn't want to take interest rate risk. Talk it over with your wife and decide where on the sliding scale you want to be.
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Peter Foley
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Re: Where to go in this investing environment

Post by Peter Foley »

With your age and retirement horizon 80/20 is plenty aggressive.

Bond yields are very low. However, paying off your mortgage is almost the equivalent of investing in bonds. Most people want their mortgage paid off before they retire.
chassis
Posts: 643
Joined: Tue Mar 24, 2020 4:28 pm

Re: Where to go in this investing environment

Post by chassis »

TominToledo wrote: Mon Nov 22, 2021 5:27 pm I'm 55 and have recently taken some profits on long term stocks that had appreciated by 100% or more. In many cases, I sold the amount equal to my original investment, so I still own many of these dividend paying companies. I am still about 90% invested in stocks (about 2.5M) and 10% cash from the recent sales. Given how poorly bonds are doing in general, I'm interested to know what other gainfully employed 55 year old men/woman are doing to maintain decent returns and whether they are shifting their investments toward a more conservative mix at this age. I owe 300K on a 30 yr fixed 2% loan. That is our only debt. We have 4 children, 2 are post college and well employed and the other two are in college with very good prospects for finding work. The out of pocket college costs remaining will be minimal. I max out my 401k and the company match is 16% which is intended to replace a significant pension that was eliminated in bankruptcy 15 years ago. Future PBGC payments in retirement will be less than $750 per month, so not much. The bottom line is this....should I still be 100p in stocks with retirement 10 years away? I know in the past the answer would be 60/40 or 50/50 Stocks/Bonds at this point in my life. But clearly the landscape has changed and I'm curious to know what my peers are thinking about this. Thanks in advance for your thoughts. Tom
@TominToledo

Consider your Social Security guaranteed income stream as a bond holding. Calculate the net present value of your, and your spouse's, SS income streams. Chances are the NPV of these streams is in the neighborhood of $1m, or more depending on your earnings history.

When compared with your $2.5m in stocks, you are already holding a large proportion of your financial position in a bond-like instrument. I would not invest new money, or exchange existing money into, bonds because of their current and near-mid term poor returns.
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