Anyone Moving from 100% stocks?

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alex123711
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Anyone Moving from 100% stocks?

Post by alex123711 »

Anyone moving or considering moving away from 100% stocks due to market overheating/ bubble in the top 7 stocks?
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dogagility
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Re: Anyone Moving from 100% stocks?

Post by dogagility »

What bubble?
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J295
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Re: Anyone Moving from 100% stocks?

Post by J295 »

100% equity is a wild ride. We did it from 1979 through 2013. The allocation changed upon early retirement, not due to market conditions. My personal belief is market conditions should, as a general rule, not impact a 100% equity commitment.

I believe I have the saying correct: It’s time in the market, not market timing that’s important.

Good luck.
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alex123711
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Re: Anyone Moving from 100% stocks?

Post by alex123711 »

Good point, its hard when the top stocks such as NVDIA seem so overvalued though. Wonder what Bogle would do in this situation? What was his preferred allocation mix?
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retired@50
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Re: Anyone Moving from 100% stocks?

Post by retired@50 »

alex123711 wrote: Fri Feb 09, 2024 6:50 pm Good point, its hard when the top stocks such as NVDIA seem so overvalued though. Wonder what Bogle would do in this situation? What was his preferred allocation mix?
Consider adding international stock. No bubble there...

Regards,
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PTCGeorge
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Re: Anyone Moving from 100% stocks?

Post by PTCGeorge »

I am 48 and staying 100% in VFIAX. I can take volatility for at least another decade. Contribute regularly every month.
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alex123711
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Re: Anyone Moving from 100% stocks?

Post by alex123711 »

retired@50 wrote: Fri Feb 09, 2024 6:54 pm
alex123711 wrote: Fri Feb 09, 2024 6:50 pm Good point, its hard when the top stocks such as NVDIA seem so overvalued though. Wonder what Bogle would do in this situation? What was his preferred allocation mix?
Consider adding international stock. No bubble there...

Regards,
I only have the total world index
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Squirrel208
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Re: Anyone Moving from 100% stocks?

Post by Squirrel208 »

alex123711 wrote: Fri Feb 09, 2024 6:33 pm Anyone moving or considering moving away from 100% stocks due to market overheating/ bubble in the top 7 stocks?
This seems to be yet another market timing investment question phrased as though perhaps this time something is uniquely different, when in fact it likely isn't. If you have the risk capacity and tolerance to invest in 100% stocks you won't lay awake imagining the sounds of overheating bubbles and other market noises in the middle of the night.

So sure, some will hear or see the market noise and react, and others will roll over and fall back asleep again. <shrugs>

Is there an actionable investment question here somewhere?
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Yesterdaysnews
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Re: Anyone Moving from 100% stocks?

Post by Yesterdaysnews »

In 10 years the price for these mega cap tech stocks will look extremely cheap.

Scared money doesn't make money.
JoeNJ28
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Re: Anyone Moving from 100% stocks?

Post by JoeNJ28 »

Nope staying 100% equity there always “expensive stocks in a bubble” those are usually your stock market leaders. Let it ride I am not smart enough to time economic events, I should be an economist.
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arcticpineapplecorp.
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Re: Anyone Moving from 100% stocks?

Post by arcticpineapplecorp. »

alex123711 wrote: Fri Feb 09, 2024 6:33 pm Anyone moving or considering moving away from 100% stocks due to market overheating/ bubble in the top 7 stocks?
whatever your allocation is should be based on your need, ability and willingness to take risk, not on exogenous events like a perceived bubble. read more here:

How much risk do you need to take: https://www.cbsnews.com/news/asset-allo ... -you-need/
How much risk do you have the ability to take: https://www.cbsnews.com/news/asset-allo ... -you-take/
How much risk do you have the willingness to take: https://www.cbsnews.com/news/asset-allo ... tolerance/
How to deal with conflicts between the need, ability and willingness to take risk: https://www.cbsnews.com/news/asset-allo ... ing-goals/

if you're not prepared for losing 50% of your money which happens when you have 100% stocks and then stocks fall 50% as they have in the past...then you probably shouldn't be 100% in stocks, right? You can look at how different allocations have performed when stocks lost 50%:

Image

do you need to be 100% in stock to meet your goals? if so, could you be undersaving? If you simply saved more, you could take less risk.
It's hard to accept the truth when the lies were exactly what you wanted to hear. Investing is simple, but not easy. Buy, hold & rebalance low cost index funds & manage taxable events. Asking Portfolio Questions | Wiki
Johm221122
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Re: Anyone Moving from 100% stocks?

Post by Johm221122 »

alex123711 wrote: Fri Feb 09, 2024 6:33 pm Anyone moving or considering moving away from 100% stocks due to market overheating/ bubble in the top 7 stocks?
I moved off 100% stocks in retirement accounts 4 months ago (give or take a week). My retirement accounts were probably 90% of my net worth.

Nothing to do with the market in general but my portfolio balance. I added enough fixed income to my existing cash/I bonds to give me 10 years of fixed income. That is enough were I could retire if I wanted with just this fixed income till Social Security kicks in

I'm putting all new contributions and CD interest in to stocks. And I don't use just S&P 500 I diversify with international and mid/small cap stocks.
bendix
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Re: Anyone Moving from 100% stocks?

Post by bendix »

alex123711 wrote: Fri Feb 09, 2024 6:50 pm Good point, its hard when the top stocks such as NVDIA seem so overvalued though. Wonder what Bogle would do in this situation? What was his preferred allocation mix?
I dont think that´s a problem at all. Folks who piled into NVDA take their wins or losses and pile into the next thing. The money doesnt leave the market, its just in some other stock. Thus, if you own a well diversified ETF, you might be ok.
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retired@50
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Re: Anyone Moving from 100% stocks?

Post by retired@50 »

alex123711 wrote: Fri Feb 09, 2024 7:12 pm
retired@50 wrote: Fri Feb 09, 2024 6:54 pm
alex123711 wrote: Fri Feb 09, 2024 6:50 pm Good point, its hard when the top stocks such as NVDIA seem so overvalued though. Wonder what Bogle would do in this situation? What was his preferred allocation mix?
Consider adding international stock. No bubble there...

Regards,
I only have the total world index
In that case, since the fund is 39% non-US, you may have less exposure to top US stocks than many of the "US only" investors in the forum.

Regards,
If liberty means anything at all it means the right to tell people what they do not want to hear. -George Orwell
Tundrama
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Re: Anyone Moving from 100% stocks?

Post by Tundrama »

Nope.

Entered this world with nothing.

I’m fine with leaving this world with nothing.

I’m an index inmate.

The index made me a millionaire a decade ago and if she waivers, so be it.

This is a fact. It has always been harder for me emotionally to watch the market go up when I wasn’t fully invested, verses watching stocks go down, when I was fully invested. It’s how I’m built and I accept that. I don’t fight it. All my friends doing that late career 60/40 or 50/50, they can have at it. It’s boring to me and like I said, if it’s simply about having enough grains of rice in the bottom of the bowl, many of us are way past that anyway.

‘One flew over the cuckoo’s nest’…play the game!
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Re: Anyone Moving from 100% stocks?

Post by z3r0c00l »

alex123711 wrote: Fri Feb 09, 2024 6:33 pm Anyone moving or considering moving away from 100% stocks due to market overheating/ bubble in the top 7 stocks?
Never was 100% stocks and never will be for precisely this sort of emotional problem you seem to be grappling with. But if I did, I would stick with it.

The whole point of 100% stocks is to ride out the storms and reach the distant shore wealthy and retired. You elected to sail in a Dragonfly 40 C-Ultimate, while others of us are using larger, slower, steadier monohulls with more ballast. You will almost certainly beat us to the other side, but not without a rougher ride. I value the comfort in that, you seem to have leaned in the direction of speed.

You went 100% stocks, it would seem, in the correct understanding that stocks normally go up most of the time. Now they have gone up for a little while and you decide to sell? That is exactly what stocks are supposed to do. And I would add, that stocks are basically sideways since December 2021. (Actually slightly below that level, inflation adjusted.)

Yes, NVDA is in a bubble right now, it has gone up 17 fold in 5 years. Let's say it goes to zero overnight due to an accounting scandal. Your portfolio would go down by a whopping 4%. That's a bad day for stocks, but nothing more. ATI and Intel will take up the market share, or something new will come around. The magnificent 7 are 33% of the SP500 right now. Let's say they drop in aggregate by 50% and your portfolio then drops by 17%. That would be, historically, a pretty common correction and therefore no big deal either. Do you even remember the last 3 10%+ corrections? I don't.
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JonFund
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Re: Anyone Moving from 100% stocks?

Post by JonFund »

As a recent retire, I've been in a 50/50 mix of equites and bonds/cash for the last few years, but it is worth noting that the NASDAQ index has been up 14 out of the last 15 weeks. The last time that occurred was in 1972. The market is being moved by just a handful of stocks, (i.e., "magnificent 7").
If you look at the daily advance/decline ratio, you'll see that the breadth of the market is horrible. My point is, while "the market" looks overbought, it is largely just those several stocks that are leading it. The lion's share of individual stocks are reasonably priced.
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windaar
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Re: Anyone Moving from 100% stocks?

Post by windaar »

We just need to change the name of this site to "Timingheads" and be done with it!
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Re: Anyone Moving from 100% stocks?

Post by mikejuss »

windaar wrote: Sat Feb 10, 2024 9:09 am We just need to change the name of this site to "Timingheads" and be done with it!
Profile photo checks out. :wink:
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Re: Anyone Moving from 100% stocks?

Post by mikejuss »

In the first place, I was never 100% stocks--and I truly don't understand why anyone else is. The added return is small (vs, say, 80/20), and, should life throw you a financial curveball, owning some bonds can be very useful.
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Re: Anyone Moving from 100% stocks?

Post by Go_Irish21 »

I'll likely be switching from 0% to 20% in bonds sometime in the near future, but not because of any Magnificent 7 or valuation concerns. My main reason is just that it feels prudent, while 100% stocks is starting to feel somewhat reckless.
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Re: Anyone Moving from 100% stocks?

Post by Livelife2fullest »

alex123711 wrote: Fri Feb 09, 2024 6:33 pm Anyone moving or considering moving away from 100% stocks due to market overheating/ bubble in the top 7 stocks?
I’m 45 and my AA has fluctuated between 100 and 80/20. When there is a major downturn, such as March 2020, it’s nice having the non-equities to not only soften the blow but to allocate back to equities. Market timing or readjusting asset allocation, call it what you’d like.

I’m close to 80/20 right now.
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Vulcan
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Re: Anyone Moving from 100% stocks?

Post by Vulcan »

alex123711 wrote: Fri Feb 09, 2024 7:12 pm
retired@50 wrote: Fri Feb 09, 2024 6:54 pm Consider adding international stock. No bubble there...
I only have the total world index
With our current 84/16 (VT/Bonds) portfolio we (48/44yo) have been lagging behind our intended glidepath (73/27 this year with 66/34 maximum at age 55) because... well bond funds...

But I am now admitting to myself that maxing out I Bonds is just not gonna be enough to catch up to the glide path, and have increased bonds buying (and reduced stocks buying) to begin the process.

This additional bond buying that should get us to 80/20 by 2025 will all be in TIPS funds.
If you torture the data long enough, it will confess to anything. ~Ronald Coase
CookieDough
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Re: Anyone Moving from 100% stocks?

Post by CookieDough »

This sounds like a SWAN (sleep well at night) question.

If you're considering market timing at 100% stocks, then it might be prudent to adjust your AA to a point where you don't consider market timing. When you can ignore market fluctuations and valuations, and still sleep well at night, you're probably where you need to be.

To me, the key is to make peace with not 100% optimizing potential future growth, trading off a bit of that bumpy, stressful growth potential for a smoother ride, as a previous commenter said.

It's okay to leave a little money on the table if doing so improves your life. The money exists to serve your life, not the other way around.
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Re: Anyone Moving from 100% stocks?

Post by aristotelian »

I sold a bit to keep to my allocation. The market is still barely higher than the previous high at the end of 2021 so I don't see it as a bubble, but maybe it will be in hindsight. If it is, the Fed has plenty of room to drop rates.
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Gennaro Dillinger
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Re: Anyone Moving from 100% stocks?

Post by Gennaro Dillinger »

Feels like there is always talk of a bubble one way or the other. I ignore it now.
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Re: Anyone Moving from 100% stocks?

Post by TG2 »

alex123711 wrote: Fri Feb 09, 2024 6:33 pm Anyone moving or considering moving away from 100% stocks due to market overheating/ bubble in the top 7 stocks?
No. I have been 100% since I started, and I will be 100% until I'm finished. If you think you need to be in bonds, be in bonds. If you don't, don't worry about it. Sounds like you are worrying about it.
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WingsFan4Life
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Re: Anyone Moving from 100% stocks?

Post by WingsFan4Life »

If one were to add bonds, it seems like a good time to do it.
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Re: Anyone Moving from 100% stocks?

Post by FireSekr »

No.

I have more regret keeping extra cash in my bank account waiting for a drop only to see the s&p go up, compared to when I just put money in s&p and it drops. I am in this for the long haul and large drops in my portfolio don’t bother me in the least as I know longer run I’ll likely come out ahead.

I have been 100% s&p for at least 10 years if not more, (aside from the $500 I keep in my checking). As soon as my paycheck is deposited and my bills are paid, I buy more s&p with whatever cash is left immediately. No timing the market. When I have cash it gets invested
gavinsiu
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Re: Anyone Moving from 100% stocks?

Post by gavinsiu »

Move from 100% stock not because of marketing condition but because I am closer to retirement.
Actin
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Re: Anyone Moving from 100% stocks?

Post by Actin »

100% equity and will be buying more every week for the next 30 years
DIYtrixie
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Re: Anyone Moving from 100% stocks?

Post by DIYtrixie »

Johm221122 wrote: Fri Feb 09, 2024 9:44 pm
alex123711 wrote: Fri Feb 09, 2024 6:33 pm Anyone moving or considering moving away from 100% stocks due to market overheating/ bubble in the top 7 stocks?
I moved off 100% stocks in retirement accounts 4 months ago (give or take a week). My retirement accounts were probably 90% of my net worth.

Nothing to do with the market in general but my portfolio balance. I added enough fixed income to my existing cash/I bonds to give me 10 years of fixed income. That is enough were I could retire if I wanted with just this fixed income till Social Security kicks in

I'm putting all new contributions and CD interest in to stocks. And I don't use just S&P 500 I diversify with international and mid/small cap stocks.
One of the benefits of 100% equities is not needing to think about where to put bonds and fixed income. This wiki article was really helpful when I started to add bonds and FE:
https://www.bogleheads.org/wiki/Tax-eff ... _placement
From your response above it’s not clear to me whether this is on your radar already or not.
Elysium
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Re: Anyone Moving from 100% stocks?

Post by Elysium »

Never been 100% stocks, unless we want to make buckets and then I can say this bucket is so and so and therefore 100% stocks :wink:

I am about 80/20 (78/22 now), been there since 2005, went down to 70% at one time using a variation of the age in bonds or some like that, then realized I am not closer to goals in dollar terms, so why be conservative, then went to use a goal based AA formula that tells me how much I should be. I am still 3% above that.

Anyhow, in dollar terms, my plan is to get to 5-6 years living expenses in a bond tent for retirement by age 60, and leave the rest in 100% stocks until retirement when I start the glidepath on that portion. I am pretty close, at that point the overall allocation would get to 2/3rd equity, 1/3rd bonds. Then the 2/3rd equity portion would glide to a 60/40 in another 5 years from age 60. At that time I will leave it there and use both 4% withdrawal and SS to fund retirement expenses. The 1/3rd bond tent will be spent fully by then. That's the goal, hope to get the bond tent fully funded by this year end, a strong market performance can help it, if not have to revisit.
Johm221122
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Re: Anyone Moving from 100% stocks?

Post by Johm221122 »

DIYtrixie wrote: Sun Feb 11, 2024 11:23 am
Johm221122 wrote: Fri Feb 09, 2024 9:44 pm
alex123711 wrote: Fri Feb 09, 2024 6:33 pm Anyone moving or considering moving away from 100% stocks due to market overheating/ bubble in the top 7 stocks?
I moved off 100% stocks in retirement accounts 4 months ago (give or take a week). My retirement accounts were probably 90% of my net worth.

Nothing to do with the market in general but my portfolio balance. I added enough fixed income to my existing cash/I bonds to give me 10 years of fixed income. That is enough were I could retire if I wanted with just this fixed income till Social Security kicks in

I'm putting all new contributions and CD interest in to stocks. And I don't use just S&P 500 I diversify with international and mid/small cap stocks.
One of the benefits of 100% equities is not needing to think about where to put bonds and fixed income. This wiki article was really helpful when I started to add bonds and FE:
https://www.bogleheads.org/wiki/Tax-eff ... _placement
From your response above it’s not clear to me whether this is on your radar already or not.
Most of this is I Bonds and Traditional IRA.

But some of these CDs are taxable but I'm in 12% tax bracket because of 401k contributions. I just started doing taxable investing recently because I increased my savings rate and this money (along with I bonds which will mature just before I retire) will be to have control of my taxable income for ACA substities
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whodidntante
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Re: Anyone Moving from 100% stocks?

Post by whodidntante »

For those who have 100% stocks, why so little?
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HomerJ
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Re: Anyone Moving from 100% stocks?

Post by HomerJ »

arcticpineapplecorp. wrote: Fri Feb 09, 2024 8:56 pm
alex123711 wrote: Fri Feb 09, 2024 6:33 pm Anyone moving or considering moving away from 100% stocks due to market overheating/ bubble in the top 7 stocks?
whatever your allocation is should be based on your need, ability and willingness to take risk, not on exogenous events like a perceived bubble.
This.

Pick an asset allocation that you can hold even if the market crashes 50% starting tomorrow.

Because it might.

This is ALWAYS true.

If retirement is many years away, and you have decent emergency fund to handle any temporary job losses, you might still be 100% stocks knowing that the market could crash 50% tomorrow.

If you are nearing retirement, one would be wise to have some money in safer assets that you could spend while waiting for a stock crash to recover.

Any other Asset Allocation besides 100% stocks, one can and should rebalance periodically as well. That can help with the feeling that at least you are "locking in" some gains as the market goes higher and higher. And it keeps your risk profile consistent.

Once you have an Asset Allocation that you can hold through the next market crash (and there WILL BE a next market crash), you no longer have to worry about the next market crash or try to predict when it's going to happen.

It's a nice feeling.
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HomerJ
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Re: Anyone Moving from 100% stocks?

Post by HomerJ »

z3r0c00l wrote: Sat Feb 10, 2024 8:11 am
alex123711 wrote: Fri Feb 09, 2024 6:33 pm Anyone moving or considering moving away from 100% stocks due to market overheating/ bubble in the top 7 stocks?
Never was 100% stocks and never will be for precisely this sort of emotional problem you seem to be grappling with.
Me too. Sell to your "sleep at night peacefully" point. When I was younger, that was 80/20, then 70/30, then finally 50/50 as I approached retirement.
Last edited by HomerJ on Sun Feb 11, 2024 12:16 pm, edited 1 time in total.
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MrCheapo
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Re: Anyone Moving from 100% stocks?

Post by MrCheapo »

alex123711 wrote: Fri Feb 09, 2024 6:33 pm Anyone moving or considering moving away from 100% stocks due to market overheating/ bubble in the top 7 stocks?
I understand your concern. Having lived through the "lost decade" in the 2000s where the stock market indices actually went down I am too worried.

But the thing to realize is that even during that awful period VTI and SPY were returning dividends and were only marginally behind real estate. From Portfolio Visualizer
CAGR
Vanguard Real Estate ETF $10,000 $13,303 4.87%
VTI ETF $10,000 $12,362 3.60%
SPDR S&P 500 ETF Trust $10,000 $11,730 2.70%
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HomerJ
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Re: Anyone Moving from 100% stocks?

Post by HomerJ »

MrCheapo wrote: Sun Feb 11, 2024 11:56 am
alex123711 wrote: Fri Feb 09, 2024 6:33 pm Anyone moving or considering moving away from 100% stocks due to market overheating/ bubble in the top 7 stocks?
I understand your concern. Having lived through the "lost decade" in the 2000s where the stock market indices actually went down I am too worried.
Were you accumulating or retired during the 2000s?

Because accumulating during the 2000s was a GREAT thing...

Just like if the OP is like 35 or something, the stock market going down isn't a huge deal (as long as he keeps his job of course).
"The best tools available to us are shovels, not scalpels. Don't get carried away." - vanBogle59
Johm221122
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Re: Anyone Moving from 100% stocks?

Post by Johm221122 »

MrCheapo wrote: Sun Feb 11, 2024 11:56 am
alex123711 wrote: Fri Feb 09, 2024 6:33 pm Anyone moving or considering moving away from 100% stocks due to market overheating/ bubble in the top 7 stocks?
I understand your concern. Having lived through the "lost decade" in the 2000s where the stock market indices actually went down I am too worried.

But the thing to realize is that even during that awful period VTI and SPY were returning dividends and were only marginally behind real estate. From Portfolio Visualizer
CAGR
Vanguard Real Estate ETF $10,000 $13,303 4.87%
VTI ETF $10,000 $12,362 3.60%
SPDR S&P 500 ETF Trust $10,000 $11,730 2.70%
I am also worried about the S&P 500

But as always I have enough diversification that I feel comfortable with the risk of one single asset class in my portfolio.
Boglehead1967
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Re: Anyone Moving from 100% stocks?

Post by Boglehead1967 »

I am 90/10 stocks cash. But, most is in index funds vs individual stocks.
All new funds go to VTSAX/VTI, increasing diversification.
The individual stocks will be diversified from when I don’t have to pay 23.8% capital gains tax once retired.
ColoradoMan
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Re: Anyone Moving from 100% stocks?

Post by ColoradoMan »

WingsFan4Life wrote: Sat Feb 10, 2024 4:38 pm If one were to add bonds, it seems like a good time to do it.
Why do you say this?
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Re: Anyone Moving from 100% stocks?

Post by ruralavalon »

alex123711 wrote: Fri Feb 09, 2024 6:33 pm Anyone moving or considering moving away from 100% stocks due to market overheating/ bubble in the top 7 stocks?
Since starting to use mutual funds I have never had 100% in stocks. An asset allocation of 100% stocks is very risky in my opinion.

My asset allocation is 60/40, I am not changing my asset allocation.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
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Re: Anyone Moving from 100% stocks?

Post by ruralavalon »

ColoradoMan wrote: Sun Feb 11, 2024 1:33 pm
WingsFan4Life wrote: Sat Feb 10, 2024 4:38 pm If one were to add bonds, it seems like a good time to do it.
Why do you say this?
Bond fund share prices are down, and yields are up.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
ColoradoMan
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Re: Anyone Moving from 100% stocks?

Post by ColoradoMan »

ruralavalon wrote: Sun Feb 11, 2024 1:50 pm
ColoradoMan wrote: Sun Feb 11, 2024 1:33 pm
WingsFan4Life wrote: Sat Feb 10, 2024 4:38 pm If one were to add bonds, it seems like a good time to do it.
Why do you say this?
Bond fund share prices are down, and yields are up.
I been thinking the same thing. And as I am on the verge of retirement, getting ready to go from 100% VTSAX to an 80/20 AA.
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Re: Anyone Moving from 100% stocks?

Post by snowday2022 »

whodidntante wrote: Sun Feb 11, 2024 11:44 am For those who have 100% stocks, why so little?
Good question. I’ve thought about buying LETFs etc but it all seems too complex for a relatively minor increase in return. Vs less than 100% stocks you can have a relatively minor decrease in return but again increases complexity.

Plus those with mortgages are effectively >100
chassis
Posts: 2145
Joined: Tue Mar 24, 2020 4:28 pm

Re: Anyone Moving from 100% stocks?

Post by chassis »

alex123711 wrote: Fri Feb 09, 2024 6:33 pm Anyone moving or considering moving away from 100% stocks due to market overheating/ bubble in the top 7 stocks?
No.
mtwistercapitalist
Posts: 34
Joined: Wed Jan 13, 2021 8:34 pm

Re: Anyone Moving from 100% stocks?

Post by mtwistercapitalist »

Anyone moving or considering moving away from 100% stocks due to market overheating/ bubble in the top 7 stocks?
Am in my 20s and already have an 80% stock and 20% bond allocation in my registered tax-advantaged accounts
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