Who else is holding in cash? [For future investing]
Re: Who else is holding in cash?
OP,
Not me. I know that I am not smart enough to predict the market.
KlangFool
Not me. I know that I am not smart enough to predict the market.
KlangFool
30% VWENX | 16% VFWAX/VTIAX | 14.5% VTSAX | 19.5% VBTLX | 10% VSIAX/VTMSX/VSMAX | 10% VSIGX| 30% Wellington 50% 3-funds 20% Mini-Larry
Re: Who else is holding in cash?
I have noted the signs of a good buying opportunity several times on the forum. Here are the posts from this January:joebh wrote:So, if market timing is a bad idea, but this is an exception, how will you know when the "good buying opportunity" you are waiting for actually arrives? What are the signs? What signs tell you that it could happen right before the election? It's always good to hear an interesting new strategy.
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Uh-oh, maybe I should start selling in February?
Last edited by livesoft on Sat Jan 30, 2016 1:34 pm, edited 1 time in total.
Re: Who else is holding in cash?
Sorry livesoft, but I was asking for the OP's grand theory of market timing. Everyone has one, I was just wondering about this specific case and wondering if something new is being proposed.livesoft wrote:I have noted the signs of a good buying opportunity several times on the forum. Here are the posts from this January:joebh wrote:So, if market timing is a bad idea, but this is an exception, how will you know when the "good buying opportunity" you are waiting for actually arrives? What are the signs? What signs tell you that it could happen right before the election? It's always good to hear an interesting new strategy.
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Re: Who else is holding in cash?
What makes you think that? I'm am amateur, but I've tried out a few models and I haven't found anything yet that would confidently predict negative returns in the future, let alone a big drop.Kelli28 wrote: lets face it we are long overdue for a significant drop
Last edited by rbaldini on Sat Jan 30, 2016 1:49 pm, edited 1 time in total.
Re: Who else is holding in cash?
I underweight US stocks due to valuation concerns a bit myself - but 56% is way too extreme! Just a few things to consider:
- Do you realize that the market is trading at 20 times trailing earnings - that is only maybe 10% over the 60 year average (I would have to check the exact number)
- S&P 500 at 1900 in 2016 is equivalent to 1240 in 2008 or around 800 in 2000 using a growth rate of 5.5% - are you sure this is bubble territory?
- International market and especially emerging markets look very attractive for an US investor - there is no way you should underweight those due to valuation concerns. If anything and you want to market time, you should buy more of those than you usually would.
- Other asset classes such as emerging market bonds, high yield bonds or precious metals and energy stocks look all attractive.
- Do you realize that the market is trading at 20 times trailing earnings - that is only maybe 10% over the 60 year average (I would have to check the exact number)
- S&P 500 at 1900 in 2016 is equivalent to 1240 in 2008 or around 800 in 2000 using a growth rate of 5.5% - are you sure this is bubble territory?
- International market and especially emerging markets look very attractive for an US investor - there is no way you should underweight those due to valuation concerns. If anything and you want to market time, you should buy more of those than you usually would.
- Other asset classes such as emerging market bonds, high yield bonds or precious metals and energy stocks look all attractive.
Re: Who else is holding in cash?
23.5% cash (CD's)
about 5 years of living expenses.
I am 61 years old now and only working 8-12 hrs. per week. Spouse 61 yrs and retiring totally this year.
We hit our retirement goal some time ago, so time to start traveling more!
I sleep very well at night and pay no attention to the market noise (stay the course!).
birdy
about 5 years of living expenses.
I am 61 years old now and only working 8-12 hrs. per week. Spouse 61 yrs and retiring totally this year.
We hit our retirement goal some time ago, so time to start traveling more!
I sleep very well at night and pay no attention to the market noise (stay the course!).
birdy
Re: Who else is holding in cash?
Maybe the gains gave OP Kelli some misgivings about holding so much cash.livesoft wrote:The drop has come and gone. I am surprised that this thread started after a couple weeks of nice gains.linenfort wrote:These cash threads are inevitable after a "big" drop and increase in frequency along with further drops.
Re: Who else is holding in cash?
I’m a conservative retiree pushing seventy, and my targets are 5% in cash, 65% in bonds, and 30% in stocks. Right now I have 2% in cash, 66% in bonds, and 32% in stocks. I’m slightly overweighted in bonds and stocks, so new money is going into cash. In my case, that means a money market fund. It doesn’t bother me that it’s paying almost nothing. I just like to know that it’s there if I need it.
Re: Who else is holding in cash?
Some, just paid off my car. I bought it last year and did not have the full amount of cash. I got busy and just checked the amount of interest I was paying I have a stable value fund in my 401K and I 50% of my bond allocation there and another 50% in a real bond fund. I regard the Stable Value Fund as my cash allocation - last year it paid about 1.85%. I'm retiring in June and trying to figure out my financial life. I will have to take RMDs ...
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Re: Who else is holding in cash?
Kelli28 wrote:I am about 56% in cash now (the bulk is in my liquid savings account) and waiting for a good buying opportunity. I'm 41 and plan to retire at 70 but as long as I can work I will. I know market timing is a bad idea but lets face it we are long overdue for a significant drop and I think it could happen right before the election. Even if it happens next year I want to have cash ready to invest since I missed out on the big buying opportunity of 2008. Anyone else doing what Im doing?
How did you get to 56% cash. Did you sell at the top like a master of the market or have you had this cash building up since the bottom, watching the rising market in despair?
For example, you could have been building cash since the bottom in 2009, desperately hoping for a massive crash to get a second chance to get in at the bottom.
Re: Who else is holding in cash?
As I wrote earlier, it is important to recognize one's areas of strength and weakness. I am thus willing to concede that Buffett and El-Erian are likely better market timers than I. That's not my game.Maynard F. Speer wrote:Some of the best wealth managers do tend to hold quite a lot of cash - is Warren Buffett up around 26% these days? Mohamed El-Erian I think has about half his portfolio in cash
I believe in Buffett's case, he'd rather hold cash than hold things he thinks aren't worth holding .. Then holding cash gives you the ability to invest when opportunities arise ... In El-Erian's case, I think it's a way to balance risk across his portfolio - so because bonds and equities may be expensive, he barbells with cash on one side; higher risk investments on the other
Of course none of us are likely to have been investing through a severe deflationary period before (I think the last was in the 1930s) ... Times like those are when you may wish you held more cash
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Re: Who else is holding in cash?
I'm at about 25% cash (well, I Bonds) now. Planning to buy a house soon... although I've been planning that for a couple years and haven't done it yet.
Re: Who else is holding in cash?
One can hold cash for cash sake, not market timing. Depends where you are in life.
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Re: Who else is holding in cash?
about ≈33% of the discretionary accounts which is ≈ 18% of our total retirement portfolio consisting of SS and pension (3.5% assumed), deferred annuities at Income Values, rental condo @ cost, acreage @ tax RMV, and descretionary trading IRA/Roth/taxable@ mtm . We (65/68) are relatively high cash because i was moving IRAs to taxable accounts ( taking qualified distributions) and thinking about conversions to Roths in Dec 2015.
Last edited by itstoomuch on Sat Jan 30, 2016 6:54 pm, edited 1 time in total.
Rev012718; 4 Incm stream buckets: SS+pension; dfr'd GLWB VA & FI anntys, by time & $$ laddered; Discretionary; Rentals. LTCi. Own, not asset. Tax TBT%. Early SS. FundRatio (FR) >1.1 67/70yo
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Re: Who else is holding in cash?
Obviously, this thread is about holding cash as in market timing.Kelli28 wrote:I know market timing is a bad idea but[...]
Why are we still discussing this?
Variable Percentage Withdrawal (bogleheads.org/wiki/VPW) | One-Fund Portfolio (bogleheads.org/forum/viewtopic.php?t=287967)
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Re: Who else is holding in cash?
^ because I can.
because I am on the Amtrak Cascades and I've seen the views before.
It was a smart move for us.
It was also fairly lucky timing
because I am on the Amtrak Cascades and I've seen the views before.
It was a smart move for us.
It was also fairly lucky timing
Rev012718; 4 Incm stream buckets: SS+pension; dfr'd GLWB VA & FI anntys, by time & $$ laddered; Discretionary; Rentals. LTCi. Own, not asset. Tax TBT%. Early SS. FundRatio (FR) >1.1 67/70yo
Re: Who else is holding in cash? [For future investing]
^^^ I removed a duplicate post.
I retitled the thread to clarify the OP's intent to hold cash for better market conditions. This discussion is going in several directions - market timing and holding cash for various reasons. Let's call this thread done.
This thread has run its course and is locked (topic exhausted, no added value to continue). See: Locked Topics
I retitled the thread to clarify the OP's intent to hold cash for better market conditions. This discussion is going in several directions - market timing and holding cash for various reasons. Let's call this thread done.
This thread has run its course and is locked (topic exhausted, no added value to continue). See: Locked Topics
Moderators or site admins may lock a topic (set it so no more replies may be added) when a violation of posting policy has occurred. Occasionally, even if there are no overt violations of posting policy, a topic (or thread) will reach a point where the information content of the discussion has been essentially exhausted and further replies are much more likely to cause distress to the community than add anything of value.