Any reason not to stuff it all into VTSAX?

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dkwhatimdoing
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Any reason not to stuff it all into VTSAX?

Post by dkwhatimdoing »

Other than a small emergency fund?

37 years old married with two toddlers.

$170 in HYSA, $40k in checking account.

$75k in T-bonds, $5k in taxable, $240k 401K, $37k Roth.
UU37CN13
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Re: Any reason not to stuff it all into VTSAX?

Post by UU37CN13 »

Makes 100% sense until 5 years out from retirement.
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btq96r
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Re: Any reason not to stuff it all into VTSAX?

Post by btq96r »

Everything after my emergency fund, and another savings bucket for my next vehicle, I'm all in equities.

I'm not 100% VTSAX, but pretty leaned into it (and the S&P fund through my 401k). But for someone at your age who wants to keep it simple and forgettable, 100% VTSAX (or a Vanguard 500 fund if that's all you have through your 401k) is a decent option. Just get ready to keep steady and not give into panic when market swings hit you proportionally.
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Re: Any reason not to stuff it all into VTSAX?

Post by KneeReplacementTutor »

Totally makes sense if you can handle the volitility of doing so. Makes no sense whatsoever if you can’t.
dharrythomas
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Re: Any reason not to stuff it all into VTSAX?

Post by dharrythomas »

KneeReplacementTutor wrote: Sat Dec 23, 2023 12:19 pm Totally makes sense if you can handle the volitility of doing so. Makes no sense whatsoever if you can’t.
And unfortunately, for any particular circumstance, that is impossible to know in advance with certainty.
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Re: Any reason not to stuff it all into VTSAX?

Post by tonyclifton »

A reason not to do it is if you have to pay a fee to buy it or it is unavailable to you in the account where you want to purchase (like a 401k that doesn’t offer it).
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Re: Any reason not to stuff it all into VTSAX?

Post by Do_Nothing »

Makes perfect sense to me. I've been all in VTSAX/VTI for the better part of 16 years, and am now 4-5 years from retirement. At retirement i'll add in 10% cash equivalents/ short term bonds.

My only regret is listening to pundits and "experts" that 100% US stocks is wrong and you should have more bonds and international. Each time I made a change I immediately regretted it and ended up losing thousands even tho the change was very short term (days or weeks) vs had I just left my allocation alone.
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Re: Any reason not to stuff it all into VTSAX?

Post by anon_investor »

KneeReplacementTutor wrote: Sat Dec 23, 2023 12:19 pm Totally makes sense if you can handle the volitility of doing so. Makes no sense whatsoever if you can’t.
+1.
KlangFool
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Re: Any reason not to stuff it all into VTSAX?

Post by KlangFool »

OP,

Make perfect sense until you are unemployed in the coming recession. Then, you can no longer "Sleep Well At Night" (SWAN). How long can you lasts if you can longer sleep?

On 1/1/2009, my employer laid off 50% of its employee at my location.

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Re: Any reason not to stuff it all into VTSAX?

Post by YeahBuddy »

I don't see a great reason not to. Even unemployment is (usually) temporary and during that time you live of your EF, which becomes your whole portfolio. Above poster did not indicate if they were part of the 50% that were laid off but I'm willing to bet almost all found new employment within 6 months to a year. For me I always have a backup plan - an employer I know I can get hired by same day or within a short period of time. It's good to plan but don't let a doomsday story hold you back.
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Re: Any reason not to stuff it all into VTSAX?

Post by MathWizard »

dkwhatimdoing wrote: Sat Dec 23, 2023 12:05 pm Other than a small emergency fund?

37 years old married with two toddlers.

$170 in HYSA, $40k in checking account.

$75k in T-bonds, $5k in taxable, $240k 401K, $37k Roth.
It worked for me , but I can't guarantee it will work for you.

2008/9 was trying for my wife, but she stayed 100% as well, and let me open the quarterly statements.
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Re: Any reason not to stuff it all into VTSAX?

Post by KlangFool »

YeahBuddy wrote: Sat Dec 23, 2023 3:58 pm
I don't see a great reason not to. Even unemployment is (usually) temporary and during that time you live of your EF, which becomes your whole portfolio. Above poster did not indicate if they were part of the 50% that were laid off but I'm willing to bet almost all found new employment within 6 months to a year. For me I always have a backup plan - an employer I know I can get hired by same day or within a short period of time. It's good to plan but don't let a doomsday story hold you back.
YeahBuddy,

You lost your bet. Many were permanently unemployed or under-employed after that.

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Re: Any reason not to stuff it all into VTSAX?

Post by Call_Me_Op »

dkwhatimdoing wrote: Sat Dec 23, 2023 12:05 pm Other than a small emergency fund?

37 years old married with two toddlers.

$170 in HYSA, $40k in checking account.

$75k in T-bonds, $5k in taxable, $240k 401K, $37k Roth.
What is your current AA - stocks/bonds/cash? At 37, it's fine to have 100% stocks but you also need the emergency fund.
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Murdock7591
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Re: Any reason not to stuff it all into VTSAX?

Post by Murdock7591 »

I'm 66 (retired) and my taxable brokerage account is 100% VTSAX and I add to it regularly.
Kinkajou82
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Re: Any reason not to stuff it all into VTSAX?

Post by Kinkajou82 »

Assuming a long time horizon, no debt/liabilities, sufficient "safety" plans for possible/unplanned expenses, and the intestinal fortitude to tolerate the wild swings that are occasionally expected from equities...

The thing I can think of is a hypothetical "Japan" scenario where you domestic stocks (VTSAX is US equities, right?) are negative or exhibit practically no growth for a very long stretch of time, and international equities would've been the diversifier that would've helped you out.

Edit: Also, the studies that established the 4% rule seem to show a higher SWR rate survivability at 75/25 stocks/bonds than 100/0, if that's your thing.
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Re: Any reason not to stuff it all into VTSAX?

Post by Jtf6 »

I had this exact thought today. And in fact, I ran some numbers to see the difference from what I did vs what I could have done.

For the first 14 years of my career in my TSP I was all in L 2040 fund (mix of stock, bonds, international, fixed income). Then in 2020 I moved in to the C Fund (VFIAX equivalent). I think I only started to max contributions in 2013.

My current balance is $700k in my TSP.

Had I been all C fund since I started with the job, I would have been at $1 million today.

Had I stayed with the L 2040 through this year I would be at $600k.

Now I'm not one to flinch under market crashes (I still own Bitcoin since 2017, gulp), so a more aggressive posture works for me. If you are one to sell when the market is tanking then life cycle or three funds portfolio is the way to go

As for me, I'm going to continue working for another 15-25 years (I'm one of those federal employees who loves his job and I'm a GS 14), I don't plan on ever getting out of the C fund.

I am 45 years old.
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StevieG72
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Re: Any reason not to stuff it all into VTSAX?

Post by StevieG72 »

If you can stomach the dips and will not panic sell, there is nothing wrong with going all in on VTSAX.
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Re: Any reason not to stuff it all into VTSAX?

Post by RiskAnalyst »

Kinkajou82 wrote: Sat Dec 23, 2023 5:44 pm Assuming a long time horizon, no debt/liabilities, sufficient "safety" plans for possible/unplanned expenses, and the intestinal fortitude to tolerate the wild swings that are occasionally expected from equities...

The thing I can think of is a hypothetical "Japan" scenario where you domestic stocks (VTSAX is US equities, right?) are negative or exhibit practically no growth for a very long stretch of time, and international equities would've been the diversifier that would've helped you out.

Edit: Also, the studies that established the 4% rule seem to show a higher SWR rate survivability at 75/25 stocks/bonds than 100/0, if that's your thing.
This is my concern as well. At the most basic level of understanding of diversification ("not putting all your eggs in one basket"), VTSAX/VTI is putting all your eggs in the U.S. basket (notwithstanding that big U.S. companies do business outside the U.S.) and none in the baskets of companies headquartered outside the U.S.

To keep the simplicity and low cost, why not just use VTWAX/VT (Vanguard Total World Stock Index Fund) instead of VTSAX/VTI?
Not a professional risk analyst
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Re: Any reason not to stuff it all into VTSAX?

Post by ThankYouJack »

KlangFool wrote: Sat Dec 23, 2023 3:04 pm
On 1/1/2009, my employer laid off 50% of its employee at my location.
Is that a typo or did your employer actually lay people off on New Years Day?

For the SWAN thing, that varies by person. And if someone isn't sleeping well due to a layoff, I'm not sure they'll sleep any better with a small percentage of fixed.

With that said, I like having some bonds myself just for a black swan type event or for a major bear that I haven't really experienced yet.
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Re: Any reason not to stuff it all into VTSAX?

Post by NYCaviator »

Do_Nothing wrote: Sat Dec 23, 2023 2:34 pm My only regret is listening to pundits and "experts" that 100% US stocks is wrong and you should have more bonds and international. Each time I made a change I immediately regretted it and ended up losing thousands even tho the change was very short term (days or weeks) vs had I just left my allocation alone.
This is an important consideration. We are VTI/VXUS with 33% being international. It's hard to watch when US outperforms international, but we made the choice to hold international and I keep telling myself to stay the course. Who knows what the future holds, but you probably won't do too bad with just VTSAX.
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Re: Any reason not to stuff it all into VTSAX?

Post by KlangFool »

ThankYouJack wrote: Sat Dec 23, 2023 7:17 pm
KlangFool wrote: Sat Dec 23, 2023 3:04 pm
On 1/1/2009, my employer laid off 50% of its employee at my location.
Is that a typo or did your employer actually lay people off on New Years Day?

For the SWAN thing, that varies by person. And if someone isn't sleeping well due to a layoff, I'm not sure they'll sleep any better with a small percentage of fixed.

With that said, I like having some bonds myself just for a black swan type event or for a major bear that I haven't really experienced yet.
ThankYouJack,

Many folks have not experienced a laid off. They assume that they can SWAN with 100% stock and minimal EF.

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Re: Any reason not to stuff it all into VTSAX?

Post by Bama12 »

KlangFool wrote: Sat Dec 23, 2023 7:45 pm
ThankYouJack wrote: Sat Dec 23, 2023 7:17 pm
KlangFool wrote: Sat Dec 23, 2023 3:04 pm
On 1/1/2009, my employer laid off 50% of its employee at my location.
Is that a typo or did your employer actually lay people off on New Years Day?

For the SWAN thing, that varies by person. And if someone isn't sleeping well due to a layoff, I'm not sure they'll sleep any better with a small percentage of fixed.

With that said, I like having some bonds myself just for a black swan type event or for a major bear that I haven't really experienced yet.
ThankYouJack,

Many folks have not experienced a laid off. They assume that they can SWAN with 100% stock and minimal EF.

KlangFool
No Bonds for me.

80% VTI 20% VBR

I keep enough cash for at least 1 year of income.
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Re: Any reason not to stuff it all into VTSAX?

Post by grabiner »

dharrythomas wrote: Sat Dec 23, 2023 2:27 pm
KneeReplacementTutor wrote: Sat Dec 23, 2023 12:19 pm Totally makes sense if you can handle the volitility of doing so. Makes no sense whatsoever if you can’t.
And unfortunately, for any particular circumstance, that is impossible to know in advance with certainty.
Which is why I only recommend this if you have been through a bear market with a lot of stock, and know how you react.

My own first bear market was 2000-2002, when I lost about 1/4 of my 80%-stock portfolio. I increased my stock allocation in 2002 and have had at least the risk of 100% stock ever since 2004. (I don't hold 100% stock but I overweight riskier stocks, which means that I still need to rebalance when the market crashes; I did this in 2008 and 2020.)
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Re: Any reason not to stuff it all into VTSAX?

Post by Beensabu »

How much are you okay with losing?
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Re: Any reason not to stuff it all into VTSAX?

Post by Wiggums »

dkwhatimdoing wrote: Sat Dec 23, 2023 12:05 pm Other than a small emergency fund?

37 years old married with two toddlers.

$170 in HYSA, $40k in checking account.

$75k in T-bonds, $5k in taxable, $240k 401K, $37k Roth.
I would only go 100% if I had sufficient cashflow to provide for my family in a prolonged downturn in the market.
"I started with nothing and I still have most of it left."
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Re: Any reason not to stuff it all into VTSAX?

Post by tibbitts »

grabiner wrote: Sat Dec 23, 2023 9:19 pm Which is why I only recommend this if you have been through a bear market with a lot of stock, and know how you react.
It's only matters if during the bear market you also lose most or all of your work income. It's not a meaningful stress test without that.
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Re: Any reason not to stuff it all into VTSAX?

Post by sunsetting101 »

How dare you ask that question on this site. :P
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Re: Any reason not to stuff it all into VTSAX?

Post by Mountain Doc »

When one asset class has outperformed for a while, it becomes very hard to see the wisdom in diversification.
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Re: Any reason not to stuff it all into VTSAX?

Post by YeahBuddy »

KlangFool wrote: Sat Dec 23, 2023 5:33 pm
YeahBuddy wrote: Sat Dec 23, 2023 3:58 pm
I don't see a great reason not to. Even unemployment is (usually) temporary and during that time you live of your EF, which becomes your whole portfolio. Above poster did not indicate if they were part of the 50% that were laid off but I'm willing to bet almost all found new employment within 6 months to a year. For me I always have a backup plan - an employer I know I can get hired by same day or within a short period of time. It's good to plan but don't let a doomsday story hold you back.
YeahBuddy,

You lost your bet. Many were permanently unemployed or under-employed after that.

KlangFool

Again, that rare story about the great recession from 15 years ago that impacted your department (and not you?) isn't going to compel me to hoard cash.

The same way the recession of the 1920s doesn't make me want to hoard gold coins.

In fact I'd rather have funds in VTSAX earning 10%+ that I could draw from (87% past 5 years) rather than in cash earning little to nothing

Finally, the US isn't facing a recession next year:
--> "many economists and investment analysts expect that the country will likely avoid a recession in 2024".
---> Multiple credible sources agree.

YeahBuddy!
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Re: Any reason not to stuff it all into VTSAX?

Post by Carguy85 »

As long as we can assume bonds are fairly safe and won’t lose a crazy amount like say 15% in a year then that could help in the event of a job loss. :mrgreen: . I think I’d rather have vtsax, no debt whatsoever, and maybe 5-10% in cash in hysa/ cd’s etc. How “sophisticated” do you want to make your financials with trying to get ahead on the spread between leases/loans/mortgages and fixed income? Throw a job loss into that mess….all id have to say is good luck sleeping with that 😀.
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Re: Any reason not to stuff it all into VTSAX?

Post by markjk »

dkwhatimdoing wrote: Sat Dec 23, 2023 12:05 pm Other than a small emergency fund?

37 years old married with two toddlers.

$170 in HYSA, $40k in checking account.

$75k in T-bonds, $5k in taxable, $240k 401K, $37k Roth.
As long as you can handle a decade like 2000 - 2010 and not panic sell. You look to be going from a very conservative allocation to a very aggressive allocation with everything outside of your 401k and Roth (you don't say what you have in those). You will see drops of 35% or more of account value over time going all stock. It's practically guaranteed. Can you hang on or will you panic and sell low for fear of losing everything? That is the key question for all of us to consider going all stock.

Yes, over a long time frame it statistically works out best to be all stock. But, and it's a big but, can you hold on during the down times? Many think they can and then find out they can't at the worst time. Make sure you know yourself enough before going all in. You mention a 401k and Roth, maybe you already know based on those allocations?

I suggest taking a look at price movements of VTSAX from 2000 - 2010. Imagine today was like 2000 and you put your money in. Look at the ups/downs throughout the decade. Make sure you can handle it.
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Re: Any reason not to stuff it all into VTSAX?

Post by KlangFool »

markjk wrote: Sun Dec 24, 2023 4:45 am
dkwhatimdoing wrote: Sat Dec 23, 2023 12:05 pm Other than a small emergency fund?

37 years old married with two toddlers.

$170 in HYSA, $40k in checking account.

$75k in T-bonds, $5k in taxable, $240k 401K, $37k Roth.
As long as you can handle a decade like 2000 - 2010 and not panic sell.
markjk,

If someone is unemployed in the coming recession and used up their emergency fund, they would have to sell their stocks to feed their family. Whether they panic or not will be irrelevant. With a small emergency fund, it would not take much unemployment for that to happen.

Counting on being lucky in the coming recession is not a good strategy.

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Re: Any reason not to stuff it all into VTSAX?

Post by LeslieSmiley »

You are the only one who knows the following:

- annual expenses
- risk tolerance
- estimation of duration of market downturn

Ultimately it comes down to 2 factors:

1. How long can you last while waiting for the market to recover without selling at a loss?

2. How long do you think the market would take to recover?

If you have enough liquidity to satisfy the above durations, then I suppose you could do that with one assumption, that is, you will not panic sell when the market drops.
Last edited by LeslieSmiley on Sun Dec 24, 2023 7:10 am, edited 1 time in total.
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Re: Any reason not to stuff it all into VTSAX?

Post by markjk »

KlangFool wrote: Sun Dec 24, 2023 6:55 am
markjk wrote: Sun Dec 24, 2023 4:45 am
dkwhatimdoing wrote: Sat Dec 23, 2023 12:05 pm Other than a small emergency fund?

37 years old married with two toddlers.

$170 in HYSA, $40k in checking account.

$75k in T-bonds, $5k in taxable, $240k 401K, $37k Roth.
As long as you can handle a decade like 2000 - 2010 and not panic sell.
markjk,

If someone is unemployed in the coming recession and used up their emergency fund, they would have to sell their stocks to feed their family. Whether they panic or not will be irrelevant. With a small emergency fund, it would not take much unemployment for that to happen.

Counting on being lucky in the coming recession is not a good strategy.

KlangFool
Fair point. Employment/income is a big part of the equation. No argument from me. There are many potential conditions to consider. You are focused on the employment side with your comments. I was focusing on the behavioral investing side with mine. The truth is we need to focus on both to make a good overall plan.
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Re: Any reason not to stuff it all into VTSAX?

Post by Outer Marker »

Ask a Japanese investor who retired in 1989 why not be "all in" on a single country's equities. Think it can't happen here? Look at 1966-1982. For my part, I don't see much point in going above 70/30 (which is where I am); and having some international, say 20%, provides important diversification benefits.
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Re: Any reason not to stuff it all into VTSAX?

Post by LeslieSmiley »

Outer Marker wrote: Sun Dec 24, 2023 7:21 am Ask a Japanese investor who retired in 1989 why it is not to be "all in" on a single country's equities. Think it can't happen here? Look at 1966-1982. For my part, I don't see much point in going above 70/30 (which is where I am); and having some international, say 20%, provides important diversification benefits.

And don't forget what happened to Rome!
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Re: Any reason not to stuff it all into VTSAX?

Post by HMSVictory »

KlangFool wrote: Sat Dec 23, 2023 3:04 pm OP,

Make perfect sense until you are unemployed in the coming recession. Then, you can no longer "Sleep Well At Night" (SWAN). How long can you lasts if you can longer sleep?

On 1/1/2009, my employer laid off 50% of its employee at my location.

KlangFool
Unless you work for the .gov then you have no chance of losing your job no matter how bad you are at it! Uncle Sugar is recession proof!

It is a mistake to assume that your industry's level of volatility and or turnover applies to everyone else - it may or may not.
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Re: Any reason not to stuff it all into VTSAX?

Post by mike66 »

I will just share my personal experience. I had this exact thought pre-Covid and had weathered several bear markets though had remained employed so it was relatively low stress. I thought I had nerves of steel and could handle any downturn. Then COVID hit. Due to lockdowns, my business had to close for 8 weeks and I had no income coming in. In addition, we decided to continue with salary for our 50 employees because we knew if we didn't we would lose the majority and never be able to start up again. It was a scary time and I am very glad I was not 100% stock
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Re: Any reason not to stuff it all into VTSAX?

Post by watchnerd »

Biggest reason not to would be if US underperforms ex-US.

This could happen from a decline in the strength of the dollar, making stocks priced in JPY, GBP, etc, worth more in USD
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Re: Any reason not to stuff it all into VTSAX?

Post by Goodenoughforme »

As long as your "small emergency fund" equals 1 year of expenses, I'd say for the long haul it's probably not a bad move. A year of expenses set aside in an emergency fund would at least allow me to sleep at night during an inevitable downturn in the stock market
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Re: Any reason not to stuff it all into VTSAX?

Post by Carguy85 »

Outer Marker wrote: Sun Dec 24, 2023 7:21 am Ask a Japanese investor who retired in 1989 why not be "all in" on a single country's equities. Think it can't happen here? Look at 1966-1982. For my part, I don't see much point in going above 70/30 (which is where I am); and having some international, say 20%, provides important diversification benefits.
Yes indeed it was a very rough time for the near retirement individual that previous to getting a big lump sum of money and investing it all in stocks in 66 had no money invested (especially in 63,64,65) and thought they had enough to retire. Of course this individual without any prior investment experience seeing a downturn right after investing the large lump sum would never contribute any more going back to work or not between 66-82…bad for this individual indeed.
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Re: Any reason not to stuff it all into VTSAX?

Post by Outer Marker »

I think we've gotten a little too comfortable thinking bear markets last only a few months, or at worst a few years. That's not always the case! With regard to 100% equities, I'm reminded of the old Mike Tyson quote: "Everyone's got a plan until they get punched in the mouth."
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Re: Any reason not to stuff it all into VTSAX?

Post by Watty »

dkwhatimdoing wrote: Sat Dec 23, 2023 12:05 pm 37 years old married with two toddlers.
With only a few dips there has not really been a bad stock market or recession since the 2008 financial crisis and housing market crash. At your age you may not have really experienced a bad job and financial market when you were an adult with significant investments unless you work in a field which was greatly impacted by the pandemic.

Most general recommendations for retirement account asset allocation are based on people retiring at 65. You are doing well with your savings now so you may either want or need to retire well before then.

You may feel that you are young and can take lots of risks but keep in mind that there are 13 years until you will be 50. :shock:

You will soon be officially middle age and if you get laid off during a recession job hunting for an older person can be brutal and typically older employees will be hit the hardest when there are layoffs.

It is not exact but in a lot of ways a mortgage is like a negative bond and there are lots of threads about that. I did not do the math but it looks like you have roughly $500K in investments. If you have a $300K mortgage then if you count that as a negative bond very roughly that is an asset allocation of -60% bonds and 160% stocks. Do the math with your actual numbers but you may already be investing very aggressively when you look at it that way. Again that is not exact but there is a lot of truth is the Mortgage as a Negative Bond concept. You are lucky if you have a 3% mortgage but it still means that you are using leverage even if you do not know it.

Be very careful about "group think" on message boards like this. During the Dot Com bubble people posted that absurdly high valuations made sense, during the housing bubble high real estate prices made sense, it is against board rules to discuss crypto here but before that rule was in place people were posting about how great that is, and now people regularly post that 100% stocks is a good idea.

A big reason not to be 100% stocks though is that you are doing great and do not have any need to be super agressive. A fundamental rule in deciding how much risk to take is to evaluate your need to take the risk and you do not have any need to take lots of risk.
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WoodSpinner
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Re: Any reason not to stuff it all into VTSAX?

Post by WoodSpinner »

YeahBuddy wrote: Sun Dec 24, 2023 1:42 am
KlangFool wrote: Sat Dec 23, 2023 5:33 pm
YeahBuddy wrote: Sat Dec 23, 2023 3:58 pm
I don't see a great reason not to. Even unemployment is (usually) temporary and during that time you live of your EF, which becomes your whole portfolio. Above poster did not indicate if they were part of the 50% that were laid off but I'm willing to bet almost all found new employment within 6 months to a year. For me I always have a backup plan - an employer I know I can get hired by same day or within a short period of time. It's good to plan but don't let a doomsday story hold you back.
YeahBuddy,

You lost your bet. Many were permanently unemployed or under-employed after that.

KlangFool

Again, that rare story about the great recession from 15 years ago that impacted your department (and not you?) isn't going to compel me to hoard cash.

The same way the recession of the 1920s doesn't make me want to hoard gold coins.

In fact I'd rather have funds in VTSAX earning 10%+ that I could draw from (87% past 5 years) rather than in cash earning little to nothing

Finally, the US isn't facing a recession next year:
--> "many economists and investment analysts expect that the country will likely avoid a recession in 2024".
---> Multiple credible sources agree.

YeahBuddy!
A lot depends on which stage of life you are in ….

I found this thread (contemporaneous to the GFC) a very good read along with some good lessons learned about managing risk.

viewtopic.php?t=25126

WoodSpinner
Last edited by WoodSpinner on Sun Dec 24, 2023 5:42 pm, edited 1 time in total.
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tibbitts
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Re: Any reason not to stuff it all into VTSAX?

Post by tibbitts »

YeahBuddy wrote: Sun Dec 24, 2023 1:42 am
KlangFool wrote: Sat Dec 23, 2023 5:33 pm
YeahBuddy wrote: Sat Dec 23, 2023 3:58 pm
I don't see a great reason not to. Even unemployment is (usually) temporary and during that time you live of your EF, which becomes your whole portfolio. Above poster did not indicate if they were part of the 50% that were laid off but I'm willing to bet almost all found new employment within 6 months to a year. For me I always have a backup plan - an employer I know I can get hired by same day or within a short period of time. It's good to plan but don't let a doomsday story hold you back.
YeahBuddy,

You lost your bet. Many were permanently unemployed or under-employed after that.

KlangFool

Again, that rare story about the great recession from 15 years ago that impacted your department (and not you?) isn't going to compel me to hoard cash.

The same way the recession of the 1920s doesn't make me want to hoard gold coins.

In fact I'd rather have funds in VTSAX earning 10%+ that I could draw from (87% past 5 years) rather than in cash earning little to nothing

Finally, the US isn't facing a recession next year:
--> "many economists and investment analysts expect that the country will likely avoid a recession in 2024".
---> Multiple credible sources agree.

YeahBuddy!
Stories wouldn't be expected to "compel" you to do anything. You're simply wrong in characterizing KF's experience as "rare", but it's something you have to experience personally to have it affect your behavior going forward. If you experience enough significant events in life not going as you expect you eventually become less confident in your predictions, and put more emphasis on avoiding poor outcomes vs. optimizing better ones.
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Re: Any reason not to stuff it all into VTSAX?

Post by JKD GUY »

Jtf6 wrote: Sat Dec 23, 2023 6:16 pm

Now I'm not one to flinch under market crashes (I still own Bitcoin since 2017, gulp)...............
Good for you. I'm mid 40s and buy/hold into total market and digital assets. Like you mentioned, I've run portfolio numbers and long-term, Bitcoin has always improved the numbers.
"Dishonest money dwindles away, but whoever gathers money little by little makes it grow" Proverbs 13:11
tibbitts
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Re: Any reason not to stuff it all into VTSAX?

Post by tibbitts »

JKD GUY wrote: Sun Dec 24, 2023 11:49 am
Jtf6 wrote: Sat Dec 23, 2023 6:16 pm

Now I'm not one to flinch under market crashes (I still own Bitcoin since 2017, gulp)...............
Good for you. I'm mid 40s and buy/hold into total market and digital assets. Like you mentioned, I've run portfolio numbers and long-term, Bitcoin has always improved the numbers.
But you have to admit that "long term" for an asset that has only existed for a short time isn't exactly conclusive. Not that I'm all that convinced by running numbers for assets that have existed for a century or more, either.
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SquawkIdent
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Re: Any reason not to stuff it all into VTSAX?

Post by SquawkIdent »

Mountain Doc wrote: Sat Dec 23, 2023 9:46 pm When one asset class has outperformed for a while, it becomes very hard to see the wisdom in diversification.
+1

But this time is different…a, no it’s not.

These posts always come out in times like these (CAPE of the S&P 500 is 32.16). Let’s see what the future brings…
JKD GUY
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Re: Any reason not to stuff it all into VTSAX?

Post by JKD GUY »

tibbitts wrote: Sun Dec 24, 2023 11:55 am
JKD GUY wrote: Sun Dec 24, 2023 11:49 am
Jtf6 wrote: Sat Dec 23, 2023 6:16 pm

Now I'm not one to flinch under market crashes (I still own Bitcoin since 2017, gulp)...............
Good for you. I'm mid 40s and buy/hold into total market and digital assets. Like you mentioned, I've run portfolio numbers and long-term, Bitcoin has always improved the numbers.
But you have to admit that "long term" for an asset that has only existed for a short time isn't exactly conclusive. Not that I'm all that convinced by running numbers for assets that have existed for a century or more, either.
True, "long-term" can be subjective and somewhat arbitrary. I'm just stating objectively, that it has increased returns (significantly) over the past ~15 years. I also recognize that it could change in the future but only time will tell.
"Dishonest money dwindles away, but whoever gathers money little by little makes it grow" Proverbs 13:11
YeahBuddy
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Re: Any reason not to stuff it all into VTSAX?

Post by YeahBuddy »

tibbitts wrote: Sun Dec 24, 2023 11:45 am
YeahBuddy wrote: Sun Dec 24, 2023 1:42 am
KlangFool wrote: Sat Dec 23, 2023 5:33 pm
YeahBuddy wrote: Sat Dec 23, 2023 3:58 pm
I don't see a great reason not to. Even unemployment is (usually) temporary and during that time you live of your EF, which becomes your whole portfolio. Above poster did not indicate if they were part of the 50% that were laid off but I'm willing to bet almost all found new employment within 6 months to a year. For me I always have a backup plan - an employer I know I can get hired by same day or within a short period of time. It's good to plan but don't let a doomsday story hold you back.
YeahBuddy,

You lost your bet. Many were permanently unemployed or under-employed after that.

KlangFool

Again, that rare story about the great recession from 15 years ago that impacted your department (and not you?) isn't going to compel me to hoard cash.

The same way the recession of the 1920s doesn't make me want to hoard gold coins.

In fact I'd rather have funds in VTSAX earning 10%+ that I could draw from (87% past 5 years) rather than in cash earning little to nothing

Finally, the US isn't facing a recession next year:
--> "many economists and investment analysts expect that the country will likely avoid a recession in 2024".
---> Multiple credible sources agree.

YeahBuddy!
Stories wouldn't be expected to "compel" you to do anything. You're simply wrong in characterizing KF's experience as "rare", but it's something you have to experience personally to have it affect your behavior going forward. If you experience enough significant events in life not going as you expect you eventually become less confident in your predictions, and put more emphasis on avoiding poor outcomes vs. optimizing better ones.

I disagree but I'll move on to my point that it makes no sense to me to hoard cash that will make 0 or a low % when I can easily tap into multiple other accounts that are making 20%+. And in a true emergency, my entire portfolio becomes my EF. Plus whatever unemployment pays. I believe it's something like 50% of my pay up to $1,000 per week. That's hardly a doomsday situation in which I would need piles of cash. Merry Christmas :D
Light weight baby!
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