who here is tempted to pullback on stocks?

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sambb
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who here is tempted to pullback on stocks?

Post by sambb » Wed Nov 20, 2013 8:30 pm

I know that bogleheads do not time the market. This thread isn't for you, or the "stay the course" comments. I know that, i get that, and I live that. My question is simply - if you are tempted to take profits and shift some to cash, are you going to do it or are you going to resist? I am trying to resist, but the profits have been really good,and I am tempted. End of 2000s were rough with the pullback.. concerned, but still in my asset alloc by my IPS.

john94549
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Re: who here is tempted to pullback on stocks?

Post by john94549 » Wed Nov 20, 2013 8:39 pm

Short answer: no, I'm not; yes, I am.

manwithnoname
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Re: who here is tempted to pullback on stocks?

Post by manwithnoname » Wed Nov 20, 2013 8:41 pm

sambb wrote:I know that bogleheads do not time the market. This thread isn't for you, or the "stay the course" comments. I know that, i get that, and I live that. My question is simply - if you are tempted to take profits and shift some to cash, are you going to do it or are you going to resist? I am trying to resist, but the profits have been really good,and I am tempted. End of 2000s were rough with the pullback.. concerned, but still in my asset alloc by my IPS.
why are you concerned?

s & p Is up 25% so far in 2013. Are you concerned that it will decline since it has gained so much in 2013, it must go down next year?

Why do you think market will go down instead of up?

If you do get out when will you get back in?

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InvestorNewb
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Re: who here is tempted to pullback on stocks?

Post by InvestorNewb » Wed Nov 20, 2013 8:48 pm

I'm trying to stay true to my philosophy of never selling a single share until I get to retirement. After a year in the market, I've stayed true to that and plan on doing the same going forward.
My Portfolio: VTI [US], VXUS [Int'l], VNQ [REIT], VCN [Canada] (largest to smallest)

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Re: who here is tempted to pullback on stocks?

Post by rkhusky » Wed Nov 20, 2013 8:50 pm

I will sell stocks when it is time to rebalance into bonds.

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Re: who here is tempted to pullback on stocks?

Post by plnelson » Wed Nov 20, 2013 8:58 pm

sambb wrote:I know that bogleheads do not time the market. This thread isn't for you, or the "stay the course" comments. I know that, i get that, and I live that. My question is simply - if you are tempted to take profits and shift some to cash, are you going to do it or are you going to resist? I am trying to resist, but the profits have been really good,and I am tempted. End of 2000s were rough with the pullback.. concerned, but still in my asset alloc by my IPS.
At this point many Bogleheads are probably "pulling back" in the form of rebalancing. My equity portfolios have gone through the roof this year so I've been selling stocks like crazy just keep my asset allocations.

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Re: who here is tempted to pullback on stocks?

Post by racy » Wed Nov 20, 2013 9:17 pm

I have taken the opportunity to create a "safe portfolio" and a "risk portfolio" (William Bernstein, "when you've won the game, why keep playing it?). I put what we'll need for necessary living expenses, over & above SS, into short term bonds. The risk portfolio is invested for growth 60 equities /40 bonds.
Having divided necessity funding from discretionary/legacy funding somehow makes me more comfortable.

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Re: who here is tempted to pullback on stocks?

Post by Random Walker » Wed Nov 20, 2013 9:18 pm

I think this is a very interesting question. Buy, hold, rebalance, TLH does not mean avoid changing the AA ever. As people progress through accumulation phase and get closer to retirement, they should consider getting less aggressive with the AA. If ones goals are much closer to being attained do to more than expected market returns, then it is very rational to take some profits. I think the key is not to make AA changes based on how the market has behaved alone. The key is to make AA changes based on how the market has moved, how personal circumstance has changed, and how market moves may have affected personal circumstance. If one has taken market risk, profited from market risk, and now is closer to meeting their own goals than expected, the rational thing to do is cool off the AA.
The big run up means future expected returns are actually lower. So ironically, if a person is further away from their financial goals than they want to be despite the market run up, they may have to get more aggressive with their AA.

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Re: who here is tempted to pullback on stocks?

Post by z3r0c00l » Wed Nov 20, 2013 9:22 pm

I am tempted, or more than that I find it a bit harder to invest new money in stocks right now. But I will resist that emotion and stick with the plan, because it makes sense.

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Re: who here is tempted to pullback on stocks?

Post by bottlecap » Wed Nov 20, 2013 9:25 pm

It's always tempting, but what are you going to do once you "profit"? Lose to inflation in cash? Go to bonds which everyone worries are going to take a hit? Spend it? I do not have enough saved yet where I can just sell and not invest in anything, so what's the point? Taking profits now will only hurt the end balance of my nest egg in the long run.

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Re: who here is tempted to pullback on stocks?

Post by 12thman » Wed Nov 20, 2013 9:43 pm

plnelson wrote:
sambb wrote:I know that bogleheads do not time the market. This thread isn't for you, or the "stay the course" comments. I know that, i get that, and I live that. My question is simply - if you are tempted to take profits and shift some to cash, are you going to do it or are you going to resist? I am trying to resist, but the profits have been really good,and I am tempted. End of 2000s were rough with the pullback.. concerned, but still in my asset alloc by my IPS.
At this point many Bogleheads are probably "pulling back" in the form of rebalancing. My equity portfolios have gone through the roof this year so I've been selling stocks like crazy just keep my asset allocations.
+1 Ive been putting all new contributions into bonds to re-balance my Roth.

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sambb
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Re: who here is tempted to pullback on stocks?

Post by sambb » Wed Nov 20, 2013 9:44 pm

There is a point. The point is, similar to late 2000s, if market goes down, you get back in. Yes, you can do well this way. Is it timing, sure. And bogleheads are anti-timing. That being said, do you think we are more likely to have a 20% rise or decline?
I am within my asset allocation, but it has been a long time to get to these levels. Who wouldnt be tempted to get some profits.
I understand the ideas that timing is bad and stay the course - dont have to mention those. I am interested in hearing from any bogleheads that occasionally do time the market (and you may be in the closet financially-forumwise). Are you going to do it this time?

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Re: who here is tempted to pullback on stocks?

Post by TheTimeLord » Wed Nov 20, 2013 10:11 pm

sambb wrote:That being said, do you think we are more likely to have a 20% rise or decline?
The former not the latter.
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Re: who here is tempted to pullback on stocks?

Post by zaboomafoozarg » Wed Nov 20, 2013 10:13 pm

sambb wrote:I am interested in hearing from any bogleheads that occasionally do time the market (and you may be in the closet financially-forumwise). Are you going to do it this time?
I'll admit, I had a bad feeling about stocks back in September, so I elected to do an early rebalance from ~80/20 to 75/25. Stocks are up 5% since then. So nope, not going to do it this time.

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Re: who here is tempted to pullback on stocks?

Post by hoopy » Wed Nov 20, 2013 10:30 pm

Not exactly market-timing in the way you meant it, but due to the run-up in equities I am dollar-cost averaging a large sum of money into the market.

I have this money from the sale of some property. If I had sold a year ago, I would have probably lump-sum-ed it into the market. I'm not entirely comfortable with putting in a large percentage of my portfolio at today's market prices, so dollar-cost averaging over the next few months helps me feel better about it.

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Re: who here is tempted to pullback on stocks?

Post by Ged » Wed Nov 20, 2013 10:47 pm

Well, I retired recently. It was a year or so earlier than I had originally planned because my employer is circling the drain and people were jumping ship leaving things a mess.

So with that plus the recent market highs I decided it would be a good time to rebalance and also cut my allocation a bit more than I would have normally. I'm still a bit less than age in bonds. It's quite possible that the next time I rebalance I will go to age in bonds. At this particular point in life I'm pretty sensitive to risk.

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Re: who here is tempted to pullback on stocks?

Post by bengal22 » Wed Nov 20, 2013 10:49 pm

I plan on remaining true to my AA plan and only selling equities when I rebalance. It was only 3 months ago when we had a ton of noise regarding the impending freefall of bonds. I think it is best to shut out the noise and think long term and "stay the course."
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Re: who here is tempted to pullback on stocks?

Post by cheese_breath » Wed Nov 20, 2013 10:51 pm

I'm waiting until end of month when I total up all my accounts. If I've reached my equities upper band I'll sell some and rebalance. If not I won't.
The surest way to know the future is when it becomes the past.

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Re: who here is tempted to pullback on stocks?

Post by rob » Wed Nov 20, 2013 11:00 pm

Tempted yeah sure but I'm just starting the re-balance back to my targets without making any allocation changes.
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Re: who here is tempted to pullback on stocks?

Post by staythecourse » Wed Nov 20, 2013 11:04 pm

I am not sure why folks find this year so surprising?

Ken Fischer (yes that one) has an excellent book called something like "People forget, but Market never forget" which goes over stock market history in the U.S. It has an excellent chart showing returns back to 1900 or so show stocks are negative a third of the time, 0 to +20 a third of the time, and >+20 a third of the time.

So what is so unusual this year more then others necessitating a change in one's plan?

As in the analogy of Mr. Market leaning over the fence as your next door neighboor who cares what it is now up 20% or down 20%. The only values you should care about is the price you buy and the price you sell. If you don't need the money now why would you consider selling??

Good luck.
Last edited by staythecourse on Wed Nov 20, 2013 11:48 pm, edited 1 time in total.
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Re: who here is tempted to pullback on stocks?

Post by GerryL » Wed Nov 20, 2013 11:10 pm

I like the hold-steady approach because I'm the type of person who would constantly be second guessing my decisions. I just keep the monthly investments running on automatic. Since I reorganized my holdings a few months ago when I did an in-service roll over from my company 401k to my IRA, I probably won't even need to rebalance in January because my 60/40 allocation is pretty much on target. I would call my style not so much set-and-forget as set-and-don't-fuss-so-much. So there is no temptation to pull back on anything.

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Re: who here is tempted to pullback on stocks?

Post by Sriracha » Wed Nov 20, 2013 11:16 pm

I sprang into action back in early August when our trigger point was reached re: equities/fixed. Scary to buy bonds, but I did it. As of mid October, we eclipsed our 2013 contribution goal for tax-deferred and taxable accounts. It was tempting to cease all further contributions and just save on schedule in a cash-equivalent, but I decided to buy international instead. As of that point, we were a few percentage points off of our target USA/international split - not enough to trigger a rebalance - but the difference was still apparent. Once we hit our target USA/international split, I'll then have to face the music and decide what to do with our new money -- is I a man or a mouse? At least I haven't seriously thought about taking profits, though. :happy
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Re: who here is tempted to pullback on stocks?

Post by Happy2BeFree » Wed Nov 20, 2013 11:26 pm

In the past week, I've shaved 6% off my 56/44 AA to get to 50/50. It's not much, but it makes me feel more balanced.

Two planners had suggested 60/40 to me, so I was letting the market do the lifting. The further I got from 50% equities, though, the more nervous I got. Good lesson. It confirmed that 50/50 was the right balance for me (especially after a strong bull), so I took some profits to get back down to it. Also, I'm selling off some high ER funds in the process. Win-win. :D

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Re: who here is tempted to pullback on stocks?

Post by Garco » Thu Nov 21, 2013 12:35 am

I pulled back on stocks in a major way two years ago (based on approaching retirement), so I'm about 50-50 now. I've leached a little bit (~3-4%) from stocks during 2013 to stay at ~50%. But I don't feel that there's good reason to make a major cutback in stocks (5% or more, say). My portfolio is balanced. Stocks have been bouyant but not bubblicious like the end of the 1990's. In December, however, I'll look at my AA as a whole and decide what to do.

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Re: who here is tempted to pullback on stocks?

Post by NightOwl » Thu Nov 21, 2013 12:51 am

sambb wrote:I know that bogleheads do not time the market. This thread isn't for you, or the "stay the course" comments. I know that, i get that, and I live that. My question is simply - if you are tempted to take profits and shift some to cash, are you going to do it or are you going to resist? I am trying to resist, but the profits have been really good,and I am tempted. End of 2000s were rough with the pullback.. concerned, but still in my asset alloc by my IPS.
I'm committed to rebalancing per my defined bands, and to "pulling back" 1% per year of age on my stock allocation, both preferably with new money so as not to generate capital gains tax.

I'm not a fan of "this thread isn't for you." If you post on bogleheads.org, you should be ready for comments from all posters here, including those of us who don't think that you should depart from your IPS. To the extent that the pain you felt in the "end of 2000s" modified your behavior, that should be reflected in your IPS. Given that you have an IPS, I think that you should stay the course -- otherwise you don't "know that, get that, and live that" at all.

NightOwl
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Re: who here is tempted to pullback on stocks?

Post by pswift » Thu Nov 21, 2013 1:47 am

I don't intend to sell any stock or bonds until retirement or at least until additional contributions don't suffice for rebalancing. But as others have mentioned, I feel increasingly hesitant to invest new money in stocks right now. Nonetheless my limited experience in investing has already demonstrated that trying to time the market is incredibly difficulty (a fool's errand?), so I'm doing my best to stay true to my IPS with all new contributions.

I had been planning to move a fairly significant amount of funds to my primary investing account as soon as they became available, and I ended up finally having the funds available in my brokerage account last week just in time for new market highs. I was sorely tempted to wait for a market correction. But that's the same feeling I had in early January 2013. I immediately purchased the international equity, and it took me a couple days to finally pull the trigger on the US equity.

I fully expect a market correction at some point, but I'll be damned if I know when!
So steady as she goes.

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Re: who here is tempted to pullback on stocks?

Post by kdmusic » Thu Nov 21, 2013 1:52 am

There is a number we may reach by the end of the year. If we reach it, I'll do the January rebalance to 50/50 instead of to 60/40, just because even modest returns in the next 10 years would get us where we need to be to retire. All of this previously in the ips, though. So yes, that would be taking profits. Here's a question, though -- if we drop below the number _after_ I've rebalanced to 50/50, does that mean I should go back to 60/40? :confused _That_ is _not_ in the ips.

kdm

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Re: who here is tempted to pullback on stocks?

Post by Van-Guard23 » Thu Nov 21, 2013 3:25 am

My IPS schedules our rebalancing for January of every year...but I am almost at the "losing sleep" point so my wife and I decided to execute a no cost inter-fund transfer for our TSP, from L2030 to the G Fund. This is close to 30% of our portfolio, bringing our fixed income (to include CDs, cash, I Bonds and TSP G Fund) to 60% of our total portfolio...a bit too conservative for mid to late 40s couple. But if it helps us/me sleep, then so be it.
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Re: who here is tempted to pullback on stocks?

Post by Winthorpe » Thu Nov 21, 2013 3:54 am

I'm not tempted to pullback. Historically, the S&P 500 has been at or near all-time highs more often than not. Think about it that way.

I'll be accumulating for at least another 10 years. I'm currently 90:10 stock:bond. It's not nearly as fun buying stock as it was late 2008/early 2009, but I will keep buying in my 90:10 ratio as usual.

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Re: who here is tempted to pullback on stocks?

Post by stemikger » Thu Nov 21, 2013 5:33 am

Of course you are always tempted after they are at a high, but we all must remember that we don't know what we don't know. So Stay the Course or even better, protect yourself from yourself and put it all in a Target Retirement Fund and eliminate the temptation.
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Re: who here is tempted to pullback on stocks?

Post by IlliniDave » Thu Nov 21, 2013 5:51 am

It's a complicated question. In a sense I started pulling back a couple months ago when I shifted how I was directing new contributions. Some changes in my 401k fund choices provided an opportunity to change things up. In my taxable accounts I've directed all distributions to a money market account.

I could "call" the above rebalancing (I've not strayed from the AA parameters of my IPS and I don't have rigid rebalancing mechanics). I could "call" some of it a positioning for tax efficiency (not directly reinvesting distributions makes TLH easier). I could "say" I'm responding to changes in my life situation (I'm about to enter T-5 years and counting, so more conservative positioning is arguably appropriate).

But I'd be disingenuous if I said that the recent surge in valuations in an environment of relatively subdued long-term return prospects for stocks have nothing to do with my strategy.

Today, I am not tempted to do anything more than chip away at the edges. But over the next year or two I'll be watching things closely. I am considering deriving an "equity cap" to superimpose onto my AA--a curve of growing dollars versus time that I will keep my equity exposure at or below. I'm not expecting that I'll move from equities to cash if I go that route, but to bonds, if stock prices increase too much.
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Re: who here is tempted to pullback on stocks?

Post by Aptenodytes » Thu Nov 21, 2013 6:18 am

Van-Guard23 wrote:My IPS schedules our rebalancing for January of every year...but I am almost at the "losing sleep" point so my wife and I decided to execute a no cost inter-fund transfer for our TSP, from L2030 to the G Fund. This is close to 30% of our portfolio, bringing our fixed income (to include CDs, cash, I Bonds and TSP G Fund) to 60% of our total portfolio...a bit too conservative for mid to late 40s couple. But if it helps us/me sleep, then so be it.
This is a good example of why it may be imprudent to put off rebalancing so long. If your AA can get out of whack by such a high degree before it comes time to rebalance, why not move up the schedule and do it every quarter or so?

But then I would have thought that someone in their mid-40s could maintain balance just with new contributions. Sounds like maybe your new contributions are pushing you further out of balance rather than steering you closer to balance. You might want to reconsider how you steer new contributions.

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Re: who here is tempted to pullback on stocks?

Post by YDNAL » Thu Nov 21, 2013 6:38 am

sambb wrote:My question is simply - if you are tempted to take profits and shift some to cash, are you going to do it or are you going to resist?
Anyone *tempted* to shift the Asset Allocation from Stocks to Cash, must be [first] correct in doing this, then correct a second time to revert back.

In this regard, do you have *need* to increase Equity risk at some unknown future point in time per IPS? When would that be?
sambb wrote:I am trying to resist, but the profits have been really good,and I am tempted. End of 2000s were rough with the pullback.. concerned, but still in my asset alloc by my IPS.
Van-Guard23 wrote:My IPS schedules our rebalancing for January of every year...but I am almost at the "losing sleep" point so my wife and I decided to execute a no cost inter-fund transfer for our TSP, from L2030 to the G Fund.
Markets do what they do regardless of the *calendar*. Our *ability & need* for risk should care less what month we rebalance.
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Re: who here is tempted to pullback on stocks?

Post by JoMoney » Thu Nov 21, 2013 7:17 am

For those with a long-term investing horizon, maybe something to consider from Jeremy Siegel's Stocks For the Long Run:
Jeremy Sigel wrote:Many investors, although convinced of the long-term superiority of equity, believe that they should not invest in stocks when stock prices appear at a peak. But this is not true for the long-term investor. ... The after-inflation total return over 30-year holding periods after major stock market peaks of the last century. Had you put $100 in stocks, bonds, or bills at those times and waited 30 years, you would still be significantly better off in stocks than any other investment. From the 1929 peak, the total real return on stocks would have been $565 versus $141 in bonds or $79 in bills. From the January 1966 peak, stocks would have still garnered an advantage of greater than 2 to 1. On average, over the six major stock market peaks reached since 1900, stocks beat bonds and bills handily. The upward movement of stock values over time overwhelms the short-term fluctuations in the market. There is no compelling reason for long-term investors to significantly reduce their stockholdings, no matter how high the market seems.
Of course, if investors can identify peaks and troughs in the market, they can outperform the ''buy-and-hold" investor. But, needless to say, few investors can do this. And even if an investor sells stocks at the peak, this does not guarantee superior returns. As difficult as it is to sell when stock prices are high and everyone is optimistic, it is more difficult to buy at market bottoms, when pessimism is widespread and few have the confidence to venture back into stocks.
A number of "market timers" boasted how they yanked all their money out of stocks before the 1987 stock crash. But many did not get back into the market until it had already passed its previous highs. Despite the satisfaction of having sold before the crash, many of these "market seers" realized returns inferior to those investors who never tried to time the market cycles.
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Re: who here is tempted to pullback on stocks?

Post by smpatel » Thu Nov 21, 2013 7:41 am

I follow absolute amount into equities, if it goes beyond it by certain amount I take profits. Last few years have been fantastic, these are all non taxable events!

Don't play the percentage game. The challenge has been about putting money to work but I figured the best investment right now is spending on needs/vacations as money supply is abundant but growth on fixed income side is next to nothing.

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Re: who here is tempted to pullback on stocks?

Post by berntson » Thu Nov 21, 2013 8:13 am

JoMoney wrote:For those with a long-term investing horizon, maybe something to consider from Jeremy Siegel's Stocks For the Long Run:
Jeremy Sigel wrote:Many investors, although convinced of the long-term superiority of equity, believe that they should not invest in stocks when stock prices appear at a peak. But this is not true for the long-term investor. ... The after-inflation total return over 30-year holding periods after major stock market peaks of the last century. Had you put $100 in stocks, bonds, or bills at those times and waited 30 years, you would still be significantly better off in stocks than any other investment. From the 1929 peak, the total real return on stocks would have been $565 versus $141 in bonds or $79 in bills. From the January 1966 peak, stocks would have still garnered an advantage of greater than 2 to 1. On average, over the six major stock market peaks reached since 1900, stocks beat bonds and bills handily. The upward movement of stock values over time overwhelms the short-term fluctuations in the market. There is no compelling reason for long-term investors to significantly reduce their stockholdings, no matter how high the market seems.
Of course, if investors can identify peaks and troughs in the market, they can outperform the ''buy-and-hold" investor. But, needless to say, few investors can do this. And even if an investor sells stocks at the peak, this does not guarantee superior returns. As difficult as it is to sell when stock prices are high and everyone is optimistic, it is more difficult to buy at market bottoms, when pessimism is widespread and few have the confidence to venture back into stocks.
A number of "market timers" boasted how they yanked all their money out of stocks before the 1987 stock crash. But many did not get back into the market until it had already passed its previous highs. Despite the satisfaction of having sold before the crash, many of these "market seers" realized returns inferior to those investors who never tried to time the market cycles.
:thumbsup

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Re: who here is tempted to pullback on stocks?

Post by Call_Me_Op » Thu Nov 21, 2013 8:14 am

I have zero temptation to pull back on stocks. You should feel the same, if your AA is appropriate for you
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Re: who here is tempted to pullback on stocks?

Post by dbr » Thu Nov 21, 2013 8:25 am

I have a solid plan to "pullback" on stocks when they exceed their target allocation by a certain band.

Right now I am at that band edge to the nearest .1% of asset allocation, so I suppose you could say I am not merely tempted but am looking at what to sell to reduce the position in stocks.

However, I don't think this is what you meant.

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Re: who here is tempted to pullback on stocks?

Post by Jill07 » Thu Nov 21, 2013 8:26 am

I haven't changed our allocations but one thing I've been doing is moving some of the stock money in the 401k to the 401k Stable Value fund and on the same day purchasing that amount in our Vanguard taxable account (often the same fund). I figure this way I can at least tax-loss harvest the money if the market goes down and the Stable Value fund is offering a higher rate than my cash can get. I am still under invested in International according to our plan so I'm trying to catch up there. I find it really hard to add to stock positions when the market is going up.. even though our plan calls for it. I try to add on down days with smaller amounts.. otherwise I would never do it. I really see the value of having a plan and fully implementing it right from the start. If I had just put our plan in place years ago, I would be taking some stock profits off the table because the stock allocation would be higher than my plan called for.

ML 59
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Re: who here is tempted to pullback on stocks?

Post by ML 59 » Thu Nov 21, 2013 8:47 am

My AA, as written in my IPS, is a reflection of my investment horizon and current condition. Neither of these have changed so I have neither the need nor the temptation to alter my course at this time.

Writing a plan that I am certain that I can live with and stick to, was very difficult for me. It took a lot of time to study and even more time to contemplate what I had learned. I had to have many frank discussions with myself during the process and even when I reached a decision, it was not easy to physically write it down. I now feel much better for it. :D

sambb, before you make any move, tempting as it may seem now, sit down and physically write out what moves you are tempted to make and follow that with exactly why you would make such a move. Treat this as your hypothesis and dedicate some time to research evidence to support your position. You may be surprised.

Either way... :sharebeer

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Ranger
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Re: who here is tempted to pullback on stocks?

Post by Ranger » Thu Nov 21, 2013 8:52 am

JoMoney wrote:For those with a long-term investing horizon, maybe something to consider from Jeremy Siegel's Stocks For the Long Run:
Jeremy Sigel wrote:A number of "market timers" boasted how they yanked all their money out of stocks before the 1987 stock crash. But many did not get back into the market until it had already passed its previous highs. Despite the satisfaction of having sold before the crash, many of these "market seers" realized returns inferior to those investors who never tried to time the market cycles.
Lol, Jeremy Siegel calling others "Market seer", when he is the one peddling his book and stocks all the time on TV and Radio.

Look here, who is the "market seer"? On Aug 18, 2010,
http://online.wsj.com/news/articles/SB1 ... 4002846058

"Ten years ago we experienced the biggest bubble in U.S. stock market history—the Internet and technology mania that saw high-flying tech stocks selling at an excess of 100 times earnings. The aftermath was predictable: Most of these highfliers declined 80% or more, and the Nasdaq today sells at less than half the peak it reached a decade ago..."

"A similar bubble is expanding today that may have far more serious consequences for investors"

What was he recommending during 1999-2000? same old stuff. In 2010, he declares stock market was in bubble in the year 2000.
Look at the bond market performanance after this "market seer" predicted "Great american bond bubble" in 2010. It does not look like bubble asset performance.
Image

Jeremy Siegel, like Nouriel Roubini is just another hack, just need to stick to their academics rather than going to TV every other day.
Last edited by Ranger on Thu Nov 21, 2013 10:54 am, edited 1 time in total.

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Re: who here is tempted to pullback on stocks?

Post by Grt2bOutdoors » Thu Nov 21, 2013 8:58 am

I'll admit it - I followed my asset allocation plan and recently shifted some "profits" from small cap to emerging markets.
There are no "cheap" markets - there are fully valued and then we have "cheaper" markets that have fallen below my set allocations - my dollars from profit-taking and new money have been and will be flowing to those sectors until they reach equilibrium.
Last edited by Grt2bOutdoors on Thu Nov 21, 2013 9:02 am, edited 1 time in total.
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Re: who here is tempted to pullback on stocks?

Post by leonidas » Thu Nov 21, 2013 9:00 am

When I am super-bullish I split 60/40. When cautious 50/50. I tried the timing thing and did pretty well leaving the market before going down twice. But getting back in before the recovery was always tough and never successful. I am comfortable with 50/50. Find a proportion that works for you and try to keep your wits. You will have less gray hair that way.

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Re: who here is tempted to pullback on stocks?

Post by Grt2bOutdoors » Thu Nov 21, 2013 9:03 am

leonidas wrote:When I am super-bullish I split 60/40. When cautious 50/50. I tried the timing thing and did pretty well leaving the market before going down twice. But getting back in before the recovery was always tough and never successful. I am comfortable with 50/50. Find a proportion that works for you and try to keep your wits. You will have less gray hair that way.
Given yesterday's thread about hair loss - a good number of us don't have to worry about gray hair, weight gain is likely to be more of an issue.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

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Re: who here is tempted to pullback on stocks?

Post by HomerJ » Thu Nov 21, 2013 10:21 am

sambb wrote:There is a point. The point is, similar to late 2000s, if market goes down, you get back in.
What if the market doesn't go back down? There were people in 1992 who sold out after a 200% gain from the bottom of 1987. I think they're still waiting for the DOW to get back to 3600
I am within my asset allocation, but it has been a long time to get to these levels. Who wouldnt be tempted to get some profits.
So you've been changing your asset allocation as you go.. The way it works is you pick an asset allocation (say 50/50) and you rebalance occasionally. That's how you take profits. Forces you to sell high and buy low. You don't try to predict the future, but you rebalance based on what has already happened in the past.

You don't change your AA based on predicting what will happen next (well, some here do), but it's better to only change your AA to reflect your personal circumstances (getting older, close to retirement, you've made enough you don't need to take extra risk anymore). Market-timing is mostly a fool's game.

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Re: who here is tempted to pullback on stocks?

Post by Toons » Thu Nov 21, 2013 10:25 am

I will think about it Dec. 26-27 :happy
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee

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Re: who here is tempted to pullback on stocks?

Post by nedsaid » Thu Nov 21, 2013 10:32 am

I have been doing mild rebalancing from stocks to bonds since July. This has been accomplished in stages. The stock market has been so strong that my asset allocation is just the same as before.

Selling some stocks here makes sense to me. If one is going to "panic" out of the market, better to do it when the market is hitting new highs rather than at a bottom.

Other than taking some off the top, I would not market time here. Bull markets can last a long time. If investors bailed out when Alan Greenspan made his famous "irrational exhuberance" remarks, they would have missed out on three terrific years of a bull market. Perhaps cutting your stocks as a total of your asset allocation maybe by five percent of your portfolio might make sense. Or rebalancing if you need to. I sure would not be "all out" of the stock market. Steady as she goes.
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Re: who here is tempted to pullback on stocks?

Post by dickenjb » Thu Nov 21, 2013 10:33 am

My target AA is 60/40 and I am currently at 64.2% stocks. So yes, I am tempted to sell some stocks. But my IPS says my rebalance bands are +/- 5%. So I will wait a little longer.

When I do pull the trigger I will sell down to 60% per my IPS.

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Re: who here is tempted to pullback on stocks?

Post by Phineas J. Whoopee » Thu Nov 21, 2013 10:50 am

Earlier this year I did pull back on stocks, and it was due to the market's return.

What happened was the stock runup pushed the value of my portfolio over a pre-defined multiple of expenses, at which point my IPS says to modestly reduce the risk of my portfolio by changing from 60/40 to 50/50.

I didn't act because I thought stocks might go down. They most certainly will go down. They will also go up. I just don't know when or by how much. It's what stocks do. For that matter, it's what bonds do.

I acted because my need to take risk had decreased.

PJW

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Re: who here is tempted to pullback on stocks?

Post by sunnyday » Thu Nov 21, 2013 10:52 am

sambb wrote:There is a point. The point is, similar to late 2000s, if market goes down, you get back in. Yes, you can do well this way. Is it timing, sure. And bogleheads are anti-timing. That being said, do you think we are more likely to have a 20% rise or decline?
I am within my asset allocation, but it has been a long time to get to these levels. Who wouldnt be tempted to get some profits.
I understand the ideas that timing is bad and stay the course - dont have to mention those. I am interested in hearing from any bogleheads that occasionally do time the market (and you may be in the closet financially-forumwise). Are you going to do it this time?
I don't think you'll find too many people on here that speculate and time. What did you think the market was going to do last year? Why didn't you move then? If timing was so simple wouldn't Wall St gurus be outperforming the S&P 500? What do you know that they don't?

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