How are folks handling the unprecedented rise in the market ?

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WL2034
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Re: How are folks handling the unprecedented rise in the market ?

Postby WL2034 » Fri Jul 14, 2017 10:44 pm

I'm buying a boat. How else should one handle having more money than they used to? :sharebeer

Doom&Gloom
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Re: How are folks handling the unprecedented rise in the market ?

Postby Doom&Gloom » Fri Jul 14, 2017 11:45 pm

By being thankful I know the definition of "unprecedented."

itstoomuch
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Re: How are folks handling the unprecedented rise in the market ?

Postby itstoomuch » Fri Jul 14, 2017 11:54 pm

Discretionary funds is all that get to play with :x
I got my finger on the sell button. Individual stocks, and they off their highs. I'm about 70% invested. 30% cash :beer .
4 buckets: SS+pension;dfr'd GLWB VA & FI anntys, by time & $$ laddered; Discretionary; Rental. Do OK any 2 bkts. LTCi. Own, not asset. Tax 25%. Early SS. FundingRatio (FR) >1.1 Age 67/70

LRDave
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Re: How are folks handling the unprecedented rise in the market ?

Postby LRDave » Sat Jul 15, 2017 8:04 am

skor99 wrote:I like many others am a skeptic of this market, given the volatile political situation and lack of any real improvements such as tax reform or infrastructure bills. But the fact is that the market still keeps going up. I am still in the market but What is everybody else doing ? Keeping the faith or thinking of bailing ?


Bolded above - who says these are improvements? Who says these will propel the market up? Who says these events (when they happen or when they don't) won't be already priced in?

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Re: How are folks handling the unprecedented rise in the market ?

Postby LadyGeek » Sat Jul 15, 2017 8:06 am

Please stay focused on the investing aspects. As a reminder, opinions of the political process are off-topic. See: Politics and Religion

In order to avoid the inevitable frictions that arise from these topics, political or religious posts and comments are prohibited.
To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.

Ready3Retire
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Re: How are folks handling the unprecedented rise in the market ?

Postby Ready3Retire » Sat Jul 15, 2017 8:13 am

Staying the course. I do however really enjoy the "triple whammy" days when domestic equities, int'l equities, and bonds are all up. I think we had 2 just this week.

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Re: How are folks handling the unprecedented rise in the market ?

Postby midareff » Sat Jul 15, 2017 8:21 am

nedsaid wrote:As the market continues to rise, I am continuing with my program of mild re-balancing from stocks to bonds, a program I have been on since July 2013. Pretty much, I have kept my asset allocation steady.


Same as Nedsaid. Stock market returns and risk are primarily determined by your asset allocation. As long as you don't let recency (bias) cloud your decisions on asset allocation, and maintain your appropriate asset allocation (through re-balancing your portfolio as needed) that matches your need, ability and willingness to take risk, you will be fine.

LOL.. since I retired 6 years ago I find taking more cruises has helped with the "problem" as well.

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Re: How are folks handling the unprecedented rise in the market ?

Postby KlangFool » Sat Jul 15, 2017 8:23 am

OP,

1) It is not unprecedented.

2) Stop listening to those noises.

3) Staying the course.

KlangFool

columbia
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Re: How are folks handling the unprecedented rise in the market ?

Postby columbia » Sat Jul 15, 2017 8:31 am

I recently rebalanced and feel pretty good about being at 67% equities at age 49. Plan to ride that out until retirement and then go 50/50.

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Re: How are folks handling the unprecedented rise in the market ?

Postby Stormbringer » Sat Jul 15, 2017 8:32 am

I'm doing three things:

1) Being 48, I felt my 80/20 allocation was a touch too aggressive, so with each 50-point rise in the S&P 500 I've been shifting 5% towards bonds. Yesterday we crossed 2450 and I'm at 65/45 now. At 2500 I'll re-balance again to 60/40. I'll probably stop there.

2) I also re-balanced my 100% US equities position to 80% US / 20% International, which is something I felt was overdue.

3) I've stopped using extra cash to buy stocks in my taxable account, and I'm putting it towards the mortgage.

rixer
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Re: How are folks handling the unprecedented rise in the market ?

Postby rixer » Sat Jul 15, 2017 9:12 am

I'm on a cruise, life is good.. :happy

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Re: How are folks handling the unprecedented rise in the market ?

Postby blevine » Sat Jul 15, 2017 9:24 am

I think the only contrary to "staying the course" is the debate about the preferred allocations.

There was a time when you needed no international, per conventional wisdom. As we watch the turmoil in the US, does anyone think a reconsideration of US/home country bias still makes sense ? How many of you have different US/Int allocations compared to Total World ? What is your justification if so, and does it still hold true ? If you do have same as the World Index, then absolutely "stay the course". Same could be said about bonds, those in Total Bond, stay the course, those with more complicated bond allocations, are you rebalancing among the multiple sub asset classes and/or considering if the allocations are valid ?

thangngo
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Re: How are folks handling the unprecedented rise in the market ?

Postby thangngo » Sat Jul 15, 2017 9:36 am

skor99 wrote:I like many others am a skeptic of this market, given the volatile political situation and lack of any real improvements such as tax reform or infrastructure bills. But the fact is that the market still keeps going up. I am still in the market but What is everybody else doing ? Keeping the faith or thinking of bailing ?


:sharebeer As I have 25-30 working years ahead of me, I really hope for a big huge unprecedented crash. That's a winning ticket to early retirement :moneybag :moneybag :moneybag

Other than that, I live below my means and save aggressively. I continue to invest in my knowledge and skill sets to increase my income, which then goes to savings. I don't allow myself to be bothered by the up and down of the market because I have no control over the market. In the days that it goes up, I smile. In the days of free fall, I buy more.

I imagine if you are closer to retirement, you would be worried about your egg nest. Hence, you should re-evaluate your allocation. A 40/60 or 60/40 allocation will help you stay the course during tough time.

BW1985
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Re: How are folks handling the unprecedented rise in the market ?

Postby BW1985 » Sat Jul 15, 2017 9:57 am

The Wizard wrote:Total international is up 17% YTD


I had no idea.. wow.

85/15 equities/cash. Haven't done a thing.
"Squirrels figured out how to save eons ago. They buried acorns. Some, they dug up, for food. Others, they let to sprout, in new oak trees. We could learn from squirrels." -john94549

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GKSD
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Re: How are folks handling the unprecedented rise in the market ?

Postby GKSD » Sat Jul 15, 2017 10:24 am

Mostly staying still and watching the net worth number in the spreadsheet increase everyday.

401K is set for auto-invest into International fund since beginning of 2016 - continuing with that.

New money is piling into short-term muni-bond fund - had been holding off re-balancing into US total mkt since last year...I know..

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avenger
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Re: How are folks handling the unprecedented rise in the market ?

Postby avenger » Sat Jul 15, 2017 10:28 am

Although I am not particularly worried about the market high (most of the time the market is at an all time high), I know this bull market is long in the tooth.

Therefore, I paid off about a healthy six-figure amount of debt in the last year, and am now debt free (asset allocation therefore became more conservative).

The asset side of my balance sheet is business as usual (age-10 in fixed income).
Last edited by avenger on Sat Jul 15, 2017 10:41 am, edited 1 time in total.
cheers ... -Mark | "Our life is frittered away with detail. Simplify. Simplify." -Henry David Thoreau | [3 fund portfolio: VTI, VXUS, SV fund (yield 3.01%)]

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Re: How are folks handling the unprecedented rise in the market ?

Postby Nowizard » Sat Jul 15, 2017 10:32 am

Hanging in and doing nothing.

Tim

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Artsdoctor
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Re: How are folks handling the unprecedented rise in the market ?

Postby Artsdoctor » Sat Jul 15, 2017 10:45 am

Well, I'm going to buck the trend. I HAVE changed things around quite a bit.

At the end of last year and now again this year, I've transferred over a lot of appreciated assets into my donor advised fund at Vanguard. The more theh equity market goes up, the more I transfer over; the more the market declines, the less I transfer over.

The run-up has given me a balance that has exceeded what my goals were so I've scaled back my equity allocation--not because I believe the market is at some precipice, but because I just don't need to take that amount of risk anymore.

There's been a significant change in work hours and salaries so the "human capital" part of the equation has changed. This also has resulted in yet another reason to scale back on equities.

I will have absolutely no regrets whatsoever if the market continues to march higher after reducing my equity allocation.

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Re: How are folks handling the unprecedented rise in the market ?

Postby goblue100 » Sat Jul 15, 2017 10:55 am

skor99 wrote:Yes, to be honest, it does feel silly to be rattled when the market is rising. But that's what a bad recession ( 2001-2002) and a near depression ( 2008) in quick succession will do to you. Always feel there is something bad coming. Almost all of my investing life, I have seen bubbles, wars, political infighting leading to policy paralysis etc. Am thinking the 80s and 90s were much calmer in comparison ( except for the 1987 crash which was forgotten pretty quickly from what I know)


Memory is funny thing. Yes, the 80's turned out to be a great time to invest in stocks, but heading into the 80's with the prime rate at 20% it didn't really feel that great. Try to afford a mortgage at 14% interest. The 87 crash was brief, but highly traumatic, and a lot of people left the market for quite while. The 90s may have seemed calm, but there was that pesky gulf war, Oklahoma city bombing, and many other events to worry about:
https://en.wikipedia.org/wiki/Timeline_ ... %93present)

My point is, there is always something to worry about. The solution, as many have already said, is set an allocation you can live with and stay the course.
Some people are immune to good advice. - Saul Goodman

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Re: How are folks handling the unprecedented rise in the market ?

Postby gmc4h232 » Sat Jul 15, 2017 10:57 am

tibbitts wrote:
Unprecedented in the sense that the political environment is so volatile

As opposed to oh, say, during the civil war ?


Agreed, political environment has been volatile since 1776. That volatility just comes in different forms - revolution, secession, assassinations, wars, scandals, impeachments, etc.

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Will do good
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Re: How are folks handling the unprecedented rise in the market ?

Postby Will do good » Sat Jul 15, 2017 10:57 am

I smile with the market high and think I have more money.

Seriously, if your AA is set correct you don't have to worry. I would be happy to see a minor correction or 10-15% so I can use my AA bonds to buy equity on the cheap at rebalance.

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Re: How are folks handling the unprecedented rise in the market ?

Postby GoldenFinch » Sat Jul 15, 2017 11:16 am

I'm glad I stayed in the market after 2008-2009. I really felt like we had saved for years and it was all for nothing. Now I see the big picture and understand what I'm doing so I'm handling this run up just fine.

mptfan
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Re: How are folks handling the unprecedented rise in the market ?

Postby mptfan » Sat Jul 15, 2017 11:18 am

What do you mean by "unprecedented?" The market has risen before, so what is different about this time?
I eat risk for breakfast. :)

WildBill
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Re: How are folks handling the unprecedented rise in the market ?

Postby WildBill » Sat Jul 15, 2017 11:24 am

Howdy

Napping is useful, as is beer. Whiskey helps also, but only in moderation.

All above are even more useful when the market is down.

Or move to Colorado, where "new highs" are not just market events.

Happy investing

W B
"Through chances various, through all vicissitudes, we make our way." Virgil, The Aeneid

skor99
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Re: How are folks handling the unprecedented rise in the market ?

Postby skor99 » Sat Jul 15, 2017 11:25 am

mptfan wrote:What do you mean by "unprecedented?" The market has risen before, so what is different about this time?


Unprecedented in the sense that market seems to be ignoring the political volatility and uncertainty, highest inequality since the 1920s by some measures and the general unease amongst people regarding the direction of the country. Maybe I am overthinking all this, but I do feel if there is a crash like we had in 2008/09 again or even something less bad, it will not be a fast hockey stick recovery like we had the last time.

2pedals
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Re: How are folks handling the unprecedented rise in the market ?

Postby 2pedals » Sat Jul 15, 2017 11:25 am

skor99 wrote:I like many others am a skeptic of this market, given the volatile political situation and lack of any real improvements such as tax reform or infrastructure bills. But the fact is that the market still keeps going up. I am still in the market but What is everybody else doing ? Keeping the faith or thinking of bailing ?


I don't see how this requires a "handling" of anything. Life goes on.....
You can go about your business. move along .. move along

skor99
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Re: How are folks handling the unprecedented rise in the market ?

Postby skor99 » Sat Jul 15, 2017 11:28 am

2pedals wrote:
skor99 wrote:I like many others am a skeptic of this market, given the volatile political situation and lack of any real improvements such as tax reform or infrastructure bills. But the fact is that the market still keeps going up. I am still in the market but What is everybody else doing ? Keeping the faith or thinking of bailing ?


I don't see how this requires a "handling" of anything. Life goes on.....
You can go about your business. move along .. move along


As good an approach as any, I guess :-)

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Re: How are folks handling the unprecedented rise in the market ?

Postby Buddtholomew » Sat Jul 15, 2017 11:39 am

Buying bonds and stable value in retirement accounts to maintain asset allocation at 52.5/40/7.5.

As others have pointed out we should expect declines in all of the assets we hold and should respond in the same manner - rebalance to AA.

If you no longer choose to rebalance to AA, find a new AA. Challenge all the demons inside to make sure you are actively changing for a reason outlined in your IPS or elsewhere.
"The first principle is that you must not fool yourself and you are the easiest person to fool" --Feynman.

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Re: How are folks handling the unprecedented rise in the market ?

Postby lostdog » Sat Jul 15, 2017 11:40 am

Staying the course. We auto invest every month into Vanguard Total World Index.
"Our life is frittered away by detail. Simplify, simplify." -Thoreau | https://www.psychologytoday.com/blog/meditation-modern-life/201507/henry-david-thoreau-simplify-simplify

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Re: How are folks handling the unprecedented rise in the market ?

Postby nukewerker » Sat Jul 15, 2017 11:42 am

Doing nothing. I could easily see the market dropping 30% from here and then we would what be back at November prices? I could also just as easily see <5% changes for the next few years as earnings catch up to prices. Or we could have a super cycle euphoric blowoff and see the dow at 50 or 60k and S&P at 5 or 6k. Or we could have an unprecedented 95% drop in equities where prices are well below book values. Or...

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BolderBoy
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Re: How are folks handling the unprecedented rise in the market ?

Postby BolderBoy » Sat Jul 15, 2017 11:59 am

skor99 wrote:I have conservative allocation as well, my portfolio has roughly 50 % of the movement of the s&p 500. I always think of the money I have lost by having such an allocation, but cannot muster the courage to allocate more at this stage to either stocks or bonds, ( except for my bi weekly 401k contribution to s&p 500 , which will be around 18 K for the year. )

If you are fretting that much over the money you have historically lost, perhaps a 50/50 AA is too aggressive for you. How old are you?
“Where you stand, depends on where you sit” - Rufus Miles | "Never underestimate one's capacity to overestimate one's abilities"

SimplicityNow
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Re: How are folks handling the unprecedented rise in the market ?

Postby SimplicityNow » Sat Jul 15, 2017 12:12 pm

Mr. Bogle has said:

..Half the time I worry why I have so much in stocks and the other half of the time I worry why I have so little in stocks...

I think many of us can relate.

But worrying won't change anything, and changing your asset allocation to be more conservative or more aggressive will only be proven correct in the rear view mirror.

If whatever you have invested in stocks is what allows you to sleep well at night then that is the correct asset allocation "for you". If not then that is a reason to reconsider your AA.

What anyone else is doing makes interesting reading but it shouldn't influence what you decide is right for you.

rgs92
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Re: How are folks handling the unprecedented rise in the market ?

Postby rgs92 » Sat Jul 15, 2017 12:13 pm

Just avoid following in the footsteps of all the posters in last few months who are advocating 80/90/100% in equities.

There is always a "good reason" [a.k.a. rationalization/excuse for recency bias] like something to be included in net worth, bonds are sure bet to collapse, stocks like Google will go the sky, etc...

rgs92
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Re: How are folks handling the unprecedented rise in the market ?

Postby rgs92 » Sat Jul 15, 2017 12:18 pm

Stormbringer wrote:I'm doing three things:

1) Being 48, I felt my 80/20 allocation was a touch too aggressive, so with each 50-point rise in the S&P 500 I've been shifting 5% towards bonds. Yesterday we crossed 2450 and I'm at 65/45 now.


That sounds good.

investingdad
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Re: How are folks handling the unprecedented rise in the market ?

Postby investingdad » Sat Jul 15, 2017 12:43 pm

We're going on a heavily upgraded cruise this Autumn, can't wait.

Back on topic, part of the reason it feels like a big up market, for us, is because we've been in the market for some time now and even smaller gains translate into bigger dollar moves.

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Re: How are folks handling the unprecedented rise in the market ?

Postby thecarrotfund » Sat Jul 15, 2017 12:58 pm

chinto wrote:
skor99 wrote:I like many others am a skeptic of this market, given the volatile political situation and lack of any real improvements such as tax reform or infrastructure bills. But the fact is that the market still keeps going up. I am still in the market but What is everybody else doing ? Keeping the faith or thinking of bailing ?


A view. For decades I have advised would be entrepreneurs and assisted small ad large businesses with their expansion plans. Since 2008 the would be entrepreneurs and small business expansions have been on hiatus and only my large accounts were active. Just in the the last two months there has been a flurry of activity in the entrepreneurial lines with people contracting me about their roll their own start-up or wanting me to vet some franchise opportunity. I think that means the economy may have legs under it now.


Love to hear about the return of small businesses. Sometimes I feel all skittery when I'm hearing about the up market and driving past dozens of empty storefronts and empty apartment buildings. It is difficult for me to correlate.
"not all storms are in the forecast"

DetroitRick
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Re: How are folks handling the unprecedented rise in the market ?

Postby DetroitRick » Sat Jul 15, 2017 1:24 pm

I am mostly just sticking to my asset allocation, and don't think this rise is all that momentous when viewed through the lens of time anyway. I'm thinking it's more a lack of volatility that is a bit unprecedented, and that I am just enjoying while it lasts. Even though volatility can work both ways.

But since this is also the year I've started major retirement distributions, I've made a slight additional move towards cash in recent months as US equities surged. So I've leveraged those recent domestic gains to fund a bigger cash cushion than I had first planned. Nothing too significant, about 2% of portfolio value increase in that cash this year (which I would otherwise have put in bonds). I'm holding international positions without change even though they've had a bigger short-term surge.

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Re: How are folks handling the unprecedented rise in the market ?

Postby ThrustVectoring » Sat Jul 15, 2017 1:24 pm

I am following my investment plan. Where do you think you are, anyhow?

But seriously, I'm young and have few assets relative to my salary (thanks, student loans), so I'm staying 1.5 levered long VTI until my portfolio borrows $10k, then buying more VTI without re-levering until my porfolio is 1.2x levered, and sticking to that AA for the next five years.

Volkdancer
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Re: How are folks handling the unprecedented rise in the market ?

Postby Volkdancer » Sat Jul 15, 2017 2:26 pm

First, I do not think it is unprecedented.

I used it as an opportunity to review my portfolio in re my Investment Policy Statement. Everything looks good. (I have a conservative portfolio)

There is, oops, was, an opportunity to rebalance.

Which I did, and am using the trimmings to fund three plus months of travel in Asia this fall (i'm a frugal traveler). I get to keep that for the rest of my life and can pass it on again and again through stories and pictures.

Thank you, Monsieur Marche!

Karl V

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Re: How are folks handling the unprecedented rise in the market ?

Postby Thesaints » Sat Jul 15, 2017 2:59 pm

blevine wrote:There was a time when you needed no international, per conventional wisdom. As we watch the turmoil in the US, does anyone think a reconsideration of US/home country bias still makes sense ?


Which turmoil are you talking about ? Assets prices have been climbing like a Saturn V rocket.
However, I'm moving towards market cap weight allocation in intl by new investments and redirecting distributions.

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Re: How are folks handling the unprecedented rise in the market ?

Postby edge » Sat Jul 15, 2017 3:01 pm

In what way is this unprecedented?

skor99 wrote:I like many others am a skeptic of this market, given the volatile political situation and lack of any real improvements such as tax reform or infrastructure bills. But the fact is that the market still keeps going up. I am still in the market but What is everybody else doing ? Keeping the faith or thinking of bailing ?


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nedsaid
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Re: How are folks handling the unprecedented rise in the market ?

Postby nedsaid » Sat Jul 15, 2017 4:48 pm

This rise in the market is not unprecedented. In the second half of the 1990's, US Stocks had a compounded return of about 27% annually. Today's stock market is nothing like that.
A fool and his money are good for business.

vested1
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Re: How are folks handling the unprecedented rise in the market ?

Postby vested1 » Sat Jul 15, 2017 6:36 pm

My wife and I are both permanently retired as of 18 months ago. We are now 64/65. Started with a 60/40 AA and 13% cash (1.5% interest bearing account). Now at 63.2%/36.8% stocks to bonds, still within rebalancing bands. All indexes at Vanguard. Down to 9.4% cash because we're using that portion for the delay of SS, which will be reduced, percentage wise, significantly in less than 1 year upon initial SS filing. We have a 30k 100% survivor pension.

Gain was 155k in the portfolio since retirement with 110k withdrawn from cash (+45k). The portfolio balance (stocks and bonds) keeps growing, and remains untouched with reinvested dividends. We made a plan to consume a set amount of cash assets to delay SS, which will be augmented from the portfolio before the final delay is complete in 5 years. We will use a VWR (variable withdrawal rate) to compensate for market performance when we eventually start tapping the portfolio, but so far so good. We anticipate only taking RMD's after their onset, with balances continuing to grow (hopefully). SS and pension will more than cover all expenses.

We plan on staying with 60/40 for the foreseeable future. A good market makes a good short term plan better, and a good long term plan better still. In my opinion, you set a reasonable goal, and if you have better performance than expected, then it's all gravy and it's OK to take 50% over expectations off the table if desired or if necessary. You need to remember your original goal when things aren't so good to keep things in perspective.

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blueblock
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Re: How are folks handling the unprecedented rise in the market ?

Postby blueblock » Sat Jul 15, 2017 6:58 pm

The last time I thought about bailing was... oh, never.

Stay the course.

Dottie57
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Re: How are folks handling the unprecedented rise in the market ?

Postby Dottie57 » Sat Jul 15, 2017 7:10 pm

Enjoying the ride, especially after enduring 2008-9 drop.

Investing through payroll.

I did save a screen shot of account totals at fidelity. I reached a minor goal friday and was very happy.

conlius
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Re: How are folks handling the unprecedented rise in the market ?

Postby conlius » Sat Jul 15, 2017 7:11 pm

The Wizard wrote:
tibbitts wrote:Isn't the market is up something like 5% nominal annually over the last 17 years? Probably closer to unprecedented on the downside than upside.

That's not what we're talking about.
S&P500 is up 11% YTD.
Total international is up 17% YTD.
I've been rebalancing incrementally in retirement to keep my stock percentage under control...[/quote

If my memory is correct, Dev/EM tanked for much of last year though, right? 17% this year isn't huge considering last year...though I don't know what 2016 returns looked like by end of calendar. I think high yield bonds had a good fall too followed by solid returns.

J295
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Re: How are folks handling the unprecedented rise in the market ?

Postby J295 » Sat Jul 15, 2017 7:17 pm

Same inaction as when it falls, it's just that it feels a better knowing the balances are going up instead of down.

More directly, we have an IPS that doesn't permit changes without a 3 month cooling off period, and we haven't changed the IPS for a long long time. So, fear (which may be in the original question) and greed as triggers for action are for all practical purposes eliminated.

jadestruck
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Re: How are folks handling the unprecedented rise in the market ?

Postby jadestruck » Sat Jul 15, 2017 7:44 pm

Keeping 100,000 in cash as gunpowder to use when the market crashes.
I sold some stocks from my taxable accounts.
Not putting new money into equities.
I know no one can predict when what happens, and one can't time the market, but better to miss an upside of 5-10%, than to rue a downside of >20-30%.
These are my views and may be totally wrong. :sharebeer

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Re: How are folks handling the unprecedented rise in the market ?

Postby inbox788 » Sat Jul 15, 2017 7:52 pm

ThrustVectoring wrote:I am following my investment plan. Where do you think you are, anyhow?

But seriously, I'm young and have few assets relative to my salary (thanks, student loans), so I'm staying 1.5 levered long VTI until my portfolio borrows $10k, then buying more VTI without re-levering until my porfolio is 1.2x levered, and sticking to that AA for the next five years.

How are you achieving this leveraging? Margin account? What is your cost to leverage?

VTI is up nearly 10% YTD, so does this mean you're up around 15%? And doesn't that mean your leverage increases?


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