Hitting The Sell Button

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nedsaid
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Hitting The Sell Button

Post by nedsaid » Wed Jan 03, 2018 11:24 pm

Despite crying in my root beer all weekend over a portfolio return of "only" 15.01%, I can't help but notice the tremendous power of this bull market. Since July 2013, I have been mildly rebalancing from stocks to bonds. It seems like all I have been doing has been hitting the "sell" button, selling stocks in wave after wave as the market advances. Sort of like the hedge growing faster than you would have ever dreamed possible and it seems like you have to trim it back almost monthly. A nice problem to have but if I was 35 years old, I would simply be enjoying the ride. At 58, it seems to be like that laurel hedge growing out of control, a big chore to maintain. This is because I am concerned about controlling my risk as I get older. Ah to be young again!

How are other older investors like me reacting to this? Am I alone in how I feel about this?
A fool and his money are good for business.

WildBill
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Re: Hitting The Sell Button

Post by WildBill » Wed Jan 03, 2018 11:33 pm

Howdy Nedsaid

I share your feelings and am pretty much in the same boat, but am rebalancing mostly with investing dividends into bonds, which is slow.

All my other choices involve realizing large capital gains, which will be murder on taxes.

First world problem that I never expected. Only way out is a step up in basis for the kids when I kick it. “ You make your money when you die.”

Happy rebalancing, if you can

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

monsterid
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Re: Hitting The Sell Button

Post by monsterid » Wed Jan 03, 2018 11:40 pm

Quality problems to have =) Think of these good times during the next recession.

livesoft
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Re: Hitting The Sell Button

Post by livesoft » Wed Jan 03, 2018 11:43 pm

I have hit an upper bound rebalancing trigger once again today. But I decided that I am just going to increase the range of my rebalancing bands and not sell at this time. I'll sell when I need to get some money to spend instead.
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nedsaid
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Re: Hitting The Sell Button

Post by nedsaid » Wed Jan 03, 2018 11:47 pm

monsterid wrote:
Wed Jan 03, 2018 11:40 pm
Quality problems to have =) Think of these good times during the next recession.
A big reason I am doing this is the regret I experienced during the 2008-2009 bear market. I let my winners run and run and run without taking anything off the table. Rebalancing was hardly in my vocabulary. I told myself that I would rebalance during the next bull market.

The thing is, I should be really happy and I am. It is just that I am a stock guy and mostly optimistic, it pains me a bit to keep selling stock to buy bonds that yield 2-3%. Pretty much, as the portfolio grows so do the actual dollar gains and losses as the market fluctuates. I want to control risk and volatility. I also realize that retirement is coming closer and closer.
A fool and his money are good for business.

goblue100
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Re: Hitting The Sell Button

Post by goblue100 » Wed Jan 03, 2018 11:48 pm

nedsaid wrote:
Wed Jan 03, 2018 11:24 pm
Since July 2013, I have been mildly rebalancing from stocks to bonds.
Me too. Of course we would both be better off if we had just let it ride. That damn 20/20 hindsight.

How are other older investors like me reacting to this? Am I alone in how I feel about this?
I'm 57, 58 in 24 days. I'm still 68% equities, so looking do some slow hedge trimming, but if they get a little leggy it's ok. I was very nervous from about March to October last year but feeling like there is a little more momentum left so not going to rush re-balancing for a few months. trying to bring it down to 60 /32 /8 in next 18 months or so.
I'll have to dig out the spreadsheets, but I've got nearly as much in bonds now as I had in my whole portfolio after the dot com bust, 2001'ish.
Some people are immune to good advice. - Saul Goodman

2comma
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Re: Hitting The Sell Button

Post by 2comma » Thu Jan 04, 2018 12:11 am

The same thing, just rebalancing back into bonds. I'm retired 4 years and I went conservative a few years before that so I'm only seeing 5-6% growth but I'm not crying in my rootbeer, we've made it, my goal was to keep ahead of inflation and it helps that we'll both have modest pensions, SS plus our investments to spend. Early on in retirement it sure is nice to see your balance grow but even when things turn we're prepared for it and it doesn't bother me at all that we could have had even more if we'd taken on more risk. I'm just glad I retired into a rising market and that I'm almost out of the early sequence of risk phase and I'm pretty sure it won't bother me to rebalance back from stocks to bonds when stocks tank.
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MnD
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Re: Hitting The Sell Button

Post by MnD » Thu Jan 04, 2018 12:55 am

I use rebalancing bands so no emotions, worries, crying, hunches - and no dribble rebalancing with new money.
Last rule-based rebalancing June 2017 - not particularly close to exceedance bands currently. 8-)

mrx
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Re: Hitting The Sell Button

Post by mrx » Thu Jan 04, 2018 12:59 am

It's really interesting how the grass is always greener on the other side!

Early 30's here. And guess what? Although I do not really want to be older. I can not help but envying these older investors who got a great bull market during their more critical years of investing. Yes, my 90/10 AA has probably grown relatively faster than your 60/40 AA. But I barely have anything saved (Let alone we are talking about 7 years ago when I was 25!). But I can not help but wondering what would the market look like when I am in my 50's and REALLY need a good 10 years!

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Kalo
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Re: Hitting The Sell Button

Post by Kalo » Thu Jan 04, 2018 1:15 am

I've been selling gradually for the last year or two. Buying short term bond fund. May create a tips ladder. I've had enough excitement during the last two big bears (dot com and 2008). I guess I'm waving the white flag. But I'd rather be half as well off but still well above the poverty level than to have had a chance to grab the brass ring and missed it and be struggling instead.

Also, I have a gut feeling that if I don't sell gradually on the way up, I may become paralyzed and hold while I ride a wave down.

I still don't see myself going below 50% equities unless things seem to be going up like crazy. I'm about 56% equities now.

I'm 57 yo. What I'm doing could turn into a rising equity glide path but I'm not sure I would have the fortitude to buy back in if things head south like they did in 2008.

As I live through the experience of bears and retirement I'm really starting to understand why most investors don't get the actual return of a stock index. I mean, why looking at the historical returns of the S&P 500 over a long period of time is not that meaningful to an individual. People have lives, fears, obligations, and personal setbacks, that prevent them from riding out the decades with an all (or even heavy) stock portfolio.

Kalo
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Leif
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Re: Hitting The Sell Button

Post by Leif » Thu Jan 04, 2018 1:24 am

It is feeling frothy. But even Greenspan talked about "Irrational Exuberance" a couple of years before the market hit the brakes. But who knows.

I just did some selling this week. Just a small "trim". Both taxable and tax deferred. I wanted to sell late last year. I waited to avoid the CG for a year. My taxable money will go into another CD rung in my 5 year ladder. The tax deferred into my TBM. I'm OK in sticking with the plan.
Last edited by Leif on Thu Jan 04, 2018 1:41 am, edited 1 time in total.
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stemikger
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Re: Hitting The Sell Button

Post by stemikger » Thu Jan 04, 2018 1:30 am

I just rebalanced yesterday. I am amazed how long this bull is going. I'm 53 and I too remember how confused and scared I was in 2009. I plan to ignore the market and my portfolio until January 2019 and rebalance if necessary.

I hold the balanced index fund in my small TIRA and I don't even have to look at it.
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Re: Hitting The Sell Button

Post by triceratop » Thu Jan 04, 2018 1:31 am

nedsaid,
The converse is that it feels painful to buy intermediate-term bonds as a young accumulator, despite my aggressively-tilted 90/10 portfolio. These days it seems like all of my dividends go towards bonds. However, most of my contributions still do go towards stocks. However, I'm sure I'll appreciate those bonds when the next bear market happens. I was able to buy into the 2016 bear market solely with cash flow.
"To play the stock market is to play musical chairs under the chord progression of a bid-ask spread."

German Expat
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Re: Hitting The Sell Button

Post by German Expat » Thu Jan 04, 2018 2:01 am

I feel your pain. All our dividends and new money go into bonds and it is barely enough to keep our planned 33% bond allocation inside the re balancing bands. More or less all our funds have capital gains. A luxury problem to have and I enjoy it while we can.

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randomizer
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Re: Hitting The Sell Button

Post by randomizer » Thu Jan 04, 2018 2:17 am

Rebalancing with new contributions, I've been buying only bonds for the last couple of years ...
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FIREchief
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Re: Hitting The Sell Button

Post by FIREchief » Thu Jan 04, 2018 4:19 am

nedsaid wrote:
Wed Jan 03, 2018 11:24 pm
It seems like all I have been doing has been hitting the "sell" button, selling stocks in wave after wave as the market advances.
Is this because of rebalancing to your firm/established A/A, or because of emotion about the market?
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

Engineer250
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Re: Hitting The Sell Button

Post by Engineer250 » Thu Jan 04, 2018 4:50 am

mrx wrote:
Thu Jan 04, 2018 12:59 am
It's really interesting how the grass is always greener on the other side!

Early 30's here. And guess what? Although I do not really want to be older. I can not help but envying these older investors who got a great bull market during their more critical years of investing. Yes, my 90/10 AA has probably grown relatively faster than your 60/40 AA. But I barely have anything saved (Let alone we are talking about 7 years ago when I was 25!). But I can not help but wondering what would the market look like when I am in my 50's and REALLY need a good 10 years!
Same! Or the feeling that when I will finally be able to save a decent amount (next year should be the first year EVER I can max 401ks and Roths) but the market seems to be at new peaks. I was investing since about 2005. If your experience was like mine, sure I got to invest during the bull market run-up, but nowhere near the max because I just wasn't making enough money at that point in my career. They've been saying we'll have another downturn or that market returns will be a lot lower than historical numbers. Of course they've been saying that for years. I just worry that my best investing years are "behind me". The worst case scenario seems to be lackluster returns scenario. No more bull, no more buy low market.
Where the tides of fortune take us, no man can know.

German Expat
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Re: Hitting The Sell Button

Post by German Expat » Thu Jan 04, 2018 5:11 am

Engineer250 wrote:
Thu Jan 04, 2018 4:50 am
mrx wrote:
Thu Jan 04, 2018 12:59 am
It's really interesting how the grass is always greener on the other side!

Early 30's here. And guess what? Although I do not really want to be older. I can not help but envying these older investors who got a great bull market during their more critical years of investing. Yes, my 90/10 AA has probably grown relatively faster than your 60/40 AA. But I barely have anything saved (Let alone we are talking about 7 years ago when I was 25!). But I can not help but wondering what would the market look like when I am in my 50's and REALLY need a good 10 years!
Same! Or the feeling that when I will finally be able to save a decent amount (next year should be the first year EVER I can max 401ks and Roths) but the market seems to be at new peaks. I was investing since about 2005. If your experience was like mine, sure I got to invest during the bull market run-up, but nowhere near the max because I just wasn't making enough money at that point in my career. They've been saying we'll have another downturn or that market returns will be a lot lower than historical numbers. Of course they've been saying that for years. I just worry that my best investing years are "behind me". The worst case scenario seems to be lackluster returns scenario. No more bull, no more buy low market.
You are still young, even if there is a downtown the next couple of years you will have decades afterwards where the market will reach new highs. See the next downturns as an opportunity, you will be in a much better position to buy (your earnings being higher) during a downturn and then profit from the next run up.

My large savings years started around 2005 (divorce in the 90's, moved to the US in 2001 and had large expenses, 2nd wife did her PhD from 2001 - 2005 and did not start making money until 2005), so relative late (I was 41 then) and I was lucky enough that most of the years since then saw the market going up.

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iceport
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Re: Hitting The Sell Button

Post by iceport » Thu Jan 04, 2018 5:23 am

nedsaid wrote:
Wed Jan 03, 2018 11:24 pm
How are other older investors like me reacting to this? Am I alone in how I feel about this?
I don't notice anything different than the last eight years.

I went from 70/30 to 56/44 over that period, and that feat was accomplished primarily with "dribble rebalancing with new money" only as MnD put it. I am averse to needing large transactions for the purpose of rebalancing (or for any purpose, really), and preferred not to do any selling. Thankfully, I was able to bump up my savings rate during these years, which helped counteract the bull market when directed to fixed income. Annual rebalancing took place at the beginning of each year with the annual Roth IRA contribution (primarily equity), but it was typically a non-event involving only minor nudges overall across all accounts. New money accomplished the bulk of the work all year. This Last year was different, because I retired and rebalanced when I deployed a lump sum payout at the end of May, 2017. So nothing is anywhere close to my rebalancing bands yet.

Who knows what tomorrow may bring?
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Cyclesafe
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Re: Hitting The Sell Button

Post by Cyclesafe » Thu Jan 04, 2018 6:27 am

63 here with a memory at least to 2000 when I "retired" after being laid off.

The market goes up and down, that's a fact. And when one's bands are breached, one rebalances. I didn't do this in 2000 or in 2008 as I was still ignorant and I remember - oh how I remember - how it felt slipping into the trough of these two tsunamis. :shock:

Fear vs greed. Managed by the way of the Bogleheads. True believer here. Stay the course.

Lottery winners will always be much richer than almost all Bogleheads.

I rebalanced in late December by selling equity in tax deferred to the end of 2017's 25% federal bracket and then buying muni's for taxable. I then further exchanged equity in tax deferred for fixed. Then again in this month (January) I sold equity in tax deferred to rebalance from December's starting 57% to January (to date's) 52.3% equity overall. My target was 52.0%, but the market kept going up. :happy

Frankly, I'm not planning on reaching my 5 percentage point upper band ever again unless it's primarily due to the tapering of my equity allocation. Could of done this prior to both the 2000 and 2008 crashes, but I didn't. I guess the third time's the charm.

B. Wellington
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Re: Hitting The Sell Button

Post by B. Wellington » Thu Jan 04, 2018 6:33 am

Ned, for the first time in years (decades) I turned off the reinvestment option. I felt it was the prudent thing to do at this point in our lives. ( However, I have let the IRA's and 401 (k) ride.)

It has been a great run so I try not to over-think this. Even Mr. Bogle from time to time has said he "may have" been a bit more conservative than he should have been. He also said that he doesn't worry to much about that and to just move on and stick to your plan. :beer

jw50
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Re: Hitting The Sell Button

Post by jw50 » Thu Jan 04, 2018 6:48 am

I write down my rules of investing:
-investment goal
-asset allocation
-globally diversified portfolio
-minimise charges
-minimise tax
-rebalance

I regularly go back to it.

Its useful to have another person to keep you honest (possibly the value add of a good financial advisor).

Since I am too cheap to pay for a financial advisor, billy no mate and wife totally disinterested; I have a number of videos I re watch to remind myself why the above rules are a good idea.

One of my favourite is by Carl Richards:
https://www.youtube.com/watch?v=Ewg-sbLpCQA
Last edited by jw50 on Thu Jan 04, 2018 12:27 pm, edited 1 time in total.

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zaboomafoozarg
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Re: Hitting The Sell Button

Post by zaboomafoozarg » Thu Jan 04, 2018 8:05 am

nedsaid wrote:
Wed Jan 03, 2018 11:24 pm
A nice problem to have but if I was 35 years old, I would simply be enjoying the ride.
I'm 35 but certainly do not enjoy investing new money into stocks at a Shiller PE of 33.

I already changed my AA from 80/20 to 75/25 but still feel uneasy about that.

cherijoh
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Re: Hitting The Sell Button

Post by cherijoh » Thu Jan 04, 2018 8:07 am

nedsaid wrote:
Wed Jan 03, 2018 11:24 pm
Despite crying in my root beer all weekend over a portfolio return of "only" 15.01%, I can't help but notice the tremendous power of this bull market. Since July 2013, I have been mildly rebalancing from stocks to bonds. It seems like all I have been doing has been hitting the "sell" button, selling stocks in wave after wave as the market advances. Sort of like the hedge growing faster than you would have ever dreamed possible and it seems like you have to trim it back almost monthly. A nice problem to have but if I was 35 years old, I would simply be enjoying the ride. At 58, it seems to be like that laurel hedge growing out of control, a big chore to maintain. This is because I am concerned about controlling my risk as I get older. Ah to be young again!

How are other older investors like me reacting to this? Am I alone in how I feel about this?
No, you aren't alone! I've been trimming back for the past few years in preparation for retirement. Partly from "normal" rebalancing and partly from resetting my target AA as I approach retirement (i.e., glide path).

At the peak of the dot com bubble, I was a few years past 35, but was even then not comfortable with the "ride" - which makes the current run up look pretty tame. I was mostly invested in my 401k (with some outside taxable investments in actively managed mutual funds). At the time we had very limited fund choices (5 of them) in our plan. They were all commingled accounts and were only priced once per month. (No I'm not kidding!) If you wanted to move money from one sub-account to another, you put in a change order which would take affect the end of the month. Basically it worked like daily pricing of a mutual fund where you receive the end of day price - only this was on a monthly basis.

One of the funds was an "aggressive growth" fund. Growth is good, right? So I think I had 25% of my pot in this fund, with another 25% in the "common stock" fund, 25% in the "stock index" fund and the remainder split between a stable value fund and government securities. Well the "aggressive growth" fund was going like gangbusters with double digit price appreciation every month. One month, that fund was up 35%! :shock: I thought this was crazy so I kept rebalancing back to my target allocation every month or two. Based on water cooler conversation, I was the only one taking this approach - it appeared that everybody else was piling into Aggressive Growth as it made its meteoric rise. When the tech bubble burst several of my colleagues who got burned announced that they had switched whatever they had left in their accounts over to the stable value fund! :oops: That was one of my first lessons in controlling risk by rebalancing and in staying the course.

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Re: Hitting The Sell Button

Post by convert949 » Thu Jan 04, 2018 8:25 am

nedsaid wrote:
Wed Jan 03, 2018 11:24 pm
Despite crying in my root beer all weekend over a portfolio return of "only" 15.01%, I can't help but notice the tremendous power of this bull market. Since July 2013, I have been mildly rebalancing from stocks to bonds. It seems like all I have been doing has been hitting the "sell" button, selling stocks in wave after wave as the market advances. Sort of like the hedge growing faster than you would have ever dreamed possible and it seems like you have to trim it back almost monthly. A nice problem to have but if I was 35 years old, I would simply be enjoying the ride. At 58, it seems to be like that laurel hedge growing out of control, a big chore to maintain. This is because I am concerned about controlling my risk as I get older. Ah to be young again!

How are other older investors like me reacting to this? Am I alone in how I feel about this?
Full disclosure: 68 and fully retired since 2009. 40% equities, 40% bonds. 20% cash and I Bonds. Rebalancing bands +/- 5%.

Haven't started trimming back as I have not quite reached my re-balancing band. Having said that, the contrarian in me assures me that this cannot last forever. I am considering funding my annual I bond purchase from US equities. Otherwise not much as we have a property for sale that will be invested into bonds and bring me back into balance...

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Re: Hitting The Sell Button

Post by dumbbunny » Thu Jan 04, 2018 8:55 am

nedsaid wrote:
Wed Jan 03, 2018 11:24 pm
How are other older investors like me reacting to this? Am I alone in how I feel about this?
Retired. Looking at 64 in March. I am just following my IPS. 60/40. Re-balancing at 5%. Reinvesting dividends into money market.
“It’s the curse of old men to realize that in the end we control nothing." "Homeland" episode, "Gerontion"

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Re: Hitting The Sell Button

Post by Blueskies123 » Thu Jan 04, 2018 9:06 am

I know I am going to be called out for not following the prescribed re-balancing protocol but I too am concerned about re-balancing into intermediate bonds such as IEF or the shorter dated BND . What I did on Tuesday in re-balance into a money market fund. Both Vanguard and Fidelity have MM funds that yield 1.35%.
That allows me to re-balance and sleep. I know I know, I am market timing the bond market but to me re-balancing takes precedent over a little but of market timing with a small portion of my portfolio. What gave me the idea was listing to a Swenson podcast where he was interviewed. He makes an obscure comment about being heavily weighted in non-correlated assets, AKA cash. I wish some smart guys did not try to impress us mere mortals with cryptic language.

https://www.cfr.org/event/conversation-david-swensen

livesoft
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Re: Hitting The Sell Button

Post by livesoft » Thu Jan 04, 2018 9:08 am

There is a big difference looking through front windshield and seeing your retirement number up ahead near the summit after two years of steep climbing

... and ...

Looking back through the rearview mirror and seeing your retirement number down in the valley after two years of great gains.
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Re: Hitting The Sell Button

Post by DemoEngr » Thu Jan 04, 2018 9:15 am

I am 58 and still 90/10 but all in ETFs . I am prepared to jump out at the first signs of a problem. I figure the huge gains will pay for the early days of a slide. Unless we bomb NK then who knows what will happen.

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Re: Hitting The Sell Button

Post by jebmke » Thu Jan 04, 2018 9:20 am

I am out of carryover losses and have now reached the end of my 10-year "window of risk" following ER at 55. My plan is to not re-balance any more on the upside and allow my equity allocation to drift upward if the market continues to go up.

The above statement is a bit misleading because I do take dividends and either spend them or invest in tax exempt bond funds. To that extent, I am constantly taking a sliver of equity off the table every quarter.
When you discover that you are riding a dead horse, the best strategy is to dismount.

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Re: Hitting The Sell Button

Post by goblue100 » Thu Jan 04, 2018 9:21 am

Blueskies123 wrote:
Thu Jan 04, 2018 9:06 am
What I did on Tuesday in re-balance into a money market fund. Both Vanguard and Fidelity have MM funds that yield 1.35%.
That allows me to re-balance and sleep. I know I know, I am market timing the bond market but to me re-balancing takes precedent over a little but of market timing with a small portion of my portfolio. What gave me the idea was listing to a Swenson podcast where he was interviewed. He makes an obscure comment about being heavily weighted in non-correlated assets, AKA cash. I wish some smart guys did not try to impress us mere mortals with cryptic language.

https://www.cfr.org/event/conversation-david-swensen
I've been doing something similar. I listed my target AA as 60/30/8, the 8 is a 5 year CD ladder that I am calling a limited liability matching portfolio(matches some fixed costs I'll have every year, will only use this money in the event of a bad year). The Ally Bank 1 years CD is 2%, so I'm starting there.
Some people are immune to good advice. - Saul Goodman

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fishandgolf
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Re: Hitting The Sell Button

Post by fishandgolf » Thu Jan 04, 2018 9:27 am

64 years young and retired for 9 years. I was at 60/40, then trimmed back to 50/50 in early 2017. I'm now at 55/45 and am hyperventilating at the thought of taking a bit off the table and heading south to the 40/60 line. :? I'll give a few more days, then make a decision........ :?: Oh...the de-pain....the de-pain........... :|

bgf
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Re: Hitting The Sell Button

Post by bgf » Thu Jan 04, 2018 9:32 am

length of the equity bull market and CAPE ratio should be forbidden terms on this board.

the whole 'market timing' restriction comes from the assumption that equity returns are random, hence unpredictable. you can get into the weeds discussing whether they are random in the Gaussian sense or wildly random in the Mandelbrotian sense... regardless, they are difficult to predict and/or unpredictable.

so... you just get in and stay in. no sense jumping in and out when dealing with random fluctuations. you pays your money and takes your chance. invest as much as you are willing, and don't invest what you can't afford to lose.

bond returns though... they are not random. bond returns are literally given to you. you know what they are from the get go. that is the whole point of bonds. you buys your bond and collects your coupon.

i think this allocation should shift over time as you can get what you need from the bonds which allows you to risk less in equities. the allocation decision though should not be based on anything having to do with the equities. it should be based on what you are getting from your bonds and what you need.
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Re: Hitting The Sell Button

Post by midareff » Thu Jan 04, 2018 9:46 am

nedsaid wrote:
Wed Jan 03, 2018 11:24 pm
Despite crying in my root beer all weekend over a portfolio return of "only" 15.01%, I can't help but notice the tremendous power of this bull market. Since July 2013, I have been mildly rebalancing from stocks to bonds. It seems like all I have been doing has been hitting the "sell" button, selling stocks in wave after wave as the market advances. Sort of like the hedge growing faster than you would have ever dreamed possible and it seems like you have to trim it back almost monthly. A nice problem to have but if I was 35 years old, I would simply be enjoying the ride. At 58, it seems to be like that laurel hedge growing out of control, a big chore to maintain. This is because I am concerned about controlling my risk as I get older. Ah to be young again!

How are other older investors like me reacting to this? Am I alone in how I feel about this?
Just turned 70 and 6 years retired. Conservative portfolio with mid 40's equities and mid 50's FI and cash, 44% equities at the moment after a small rebalance yesterday. Last year's return was 14.25% and rebalanced into FI more than once during the year to preserve profits and mitigate risk. An average gain for 8 years of 9.0% vs. a 3.6% draw for 6 years will spoil you and this can not go on forever. I remember 1999, watching the Nasdaq, S&P and Dow go up almost daily, just like now, until they didn't, and it was a long time until there was sunshine again. Two thoughts run through my head the last year or two ... don't risk money you do need to make money you don't need.... AND, If you have won the game stop playing.

You are not alone Ned.
Last edited by midareff on Thu Jan 04, 2018 10:03 am, edited 1 time in total.

minesweep
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Re: Hitting The Sell Button

Post by minesweep » Thu Jan 04, 2018 9:47 am

nedsaid wrote:
Wed Jan 03, 2018 11:24 pm
Despite crying in my root beer all weekend over a portfolio return of "only" 15.01%, I can't help but notice the tremendous power of this bull market. Since July 2013, I have been mildly rebalancing from stocks to bonds. It seems like all I have been doing has been hitting the "sell" button, selling stocks in wave after wave as the market advances. Sort of like the hedge growing faster than you would have ever dreamed possible and it seems like you have to trim it back almost monthly. A nice problem to have but if I was 35 years old, I would simply be enjoying the ride. At 58, it seems to be like that laurel hedge growing out of control, a big chore to maintain. This is because I am concerned about controlling my risk as I get older. Ah to be young again!

How are other older investors like me reacting to this? Am I alone in how I feel about this?
I'm not tired of winning.

asif408
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Re: Hitting The Sell Button

Post by asif408 » Thu Jan 04, 2018 9:54 am

Always enjoy your posts, nedsaid. I'm closer to 35 than 58, and from 2013-2016, I gradually upped by foreign stock allocation, and it felt like I was throwing money into the toilet buying more foreign stocks in 2014 and 2015, so I've had a bit of the opposite experience you had. Finally, in 2016, I decided to make a more substantial change and go heavy into foreign stocks because of the multi-year poor performance and large valuation divergence between US and foreign, and my over rebalancing paid off, though I admit at times I had some doubts. I've decided to let things ride a little longer before I start rebalancing my stocks into bonds, because the bull market in foreign equities is only about 2 years old. So the last two years have been good, but I still haven't forgotten what 2014 and 2015 felt like, when my foreign stocks were falling 20 and 30% while the US stocks dropped some but not nearly as much.

So I see myself as an occasional market timer at certain extremes, and I feel more comfortable investing in something that is in year 2 of a bull market vs. something that is in year 9. In fact, most of the developed ex-US and emerging markets indices have either not eclipsed or just recently eclipsed (in the past year or so) their 2007 highs.

But if I was in your shoes, yes, I would probably be gradually taking some chips off the table and buying more bonds/CDs, or, if not, shifting my stock allocation more heavily to foreign.

bgf
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Re: Hitting The Sell Button

Post by bgf » Thu Jan 04, 2018 10:00 am

asif408 wrote:
Thu Jan 04, 2018 9:54 am
In fact, most of the developed ex-US and emerging markets indices have either not eclipsed or just recently eclipsed (in the past year or so) their 2007 highs.
exactly. VWO broke $50 in 2008 and 2011 and is still below that threshold despite a strong rally from around $30 at the beginning of 2016. i also overweight VWO. basically just do 50-25-25, VTI - VEA - VWO.
“TE OCCIDERE POSSUNT SED TE EDERE NON POSSUNT NEFAS EST"

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kingsnake
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Re: Hitting The Sell Button

Post by kingsnake » Thu Jan 04, 2018 10:06 am

I don't have any 401k bond space left with 100% BND in there...that leaves me with muni bond funds at Vanguard...but in order to be able to TLH I don't want to buy any of that for 6 months....so that means I should buy more VTI which I could TLH after the peak versus ugh, pay down my mortgage.
Paying down my mortgage just doesn't sound or feel that sexy since I don't really count it as an investment anyway.
Agree, first world problems. :moneybag

Hubris
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Re: Hitting The Sell Button

Post by Hubris » Thu Jan 04, 2018 10:15 am

We’re within 5 yrs of retirement, hopefully. We use mirrored portfolios in our different accounts for reasons of being a couple that came together just a few years ago in our 50’s, but we still look at an asset allocation combined across all account; pretty easy if all the sub accounts are on target with same allocation. Lately, we’ve been rebalancing taxable accounts down to a more conservative allocation and tax-deferred/tax-free accounts to something more aggressive; to maintain the same asset allocation combined across all accounts.

And, we’re rebalancing mostly through new money since we have some major cash coming in from real estate deals, etc.

We think this will give us something of a safety net from sequence of returns risk as we prepare for retirement.

Lynette
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Re: Hitting The Sell Button

Post by Lynette » Thu Jan 04, 2018 10:19 am

Nedsaid,

Thanks for posting. An IPS sounds like a lot of hard work to me so I don't have one. Recently I rolled over my 401K to Vanguard and Fidelity IRA's. I landed up having more stock funds outside of my normal 60/40 AA. I have to take RMDs this year so I just sold some stock funds in both Fidelity and Vanguard. I will do some more QCDs. The advantage of waiting till the end of the year to do RMDs and QCDs is that one's portfolio may go up but it may also go down and one still has to take out the RMDs ...so what is Mr Market going to do ????

magneto
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Re: Hitting The Sell Button

Post by magneto » Thu Jan 04, 2018 10:33 am

What a relief that no 100%Stockers have chipped in. :o

But hang on a minute :!:
If the 100%Stockers are unusually absent, and posters mostly seem to be tending defensive; what might that portend :?:

But at least most here seem to have the grounding of an Investment Plan. :)
Last edited by magneto on Thu Jan 04, 2018 10:35 am, edited 2 times in total.
'There is a tide in the affairs of men ...', Brutus (Market Timer)

deltaneutral83
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Re: Hitting The Sell Button

Post by deltaneutral83 » Thu Jan 04, 2018 10:33 am

I've come to realize the only time people don't have regret over their AA is when the market consolidates. The 60/40's and below are regretful of missing this run up while the 75/25's and above are just saying whew... and vice versa in 2008.

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Kenkat
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Re: Hitting The Sell Button

Post by Kenkat » Thu Jan 04, 2018 10:38 am

It feels like it has been years since I have put any new money into US equities. First, all new money was going to International equities and over the past year and a half (?) it’s been all new money going to 100% bonds. I haven’t hit any rebalance bands yet but if stocks keeping going up...

Silk McCue
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Re: Hitting The Sell Button

Post by Silk McCue » Thu Jan 04, 2018 10:44 am

DemoEngr wrote:
Thu Jan 04, 2018 9:15 am
I am 58 and still 90/10 but all in ETFs . I am prepared to jump out at the first signs of a problem. I figure the huge gains will pay for the early days of a slide. Unless we bomb NK then who knows what will happen.
This is a time proven failed approach that only works for those that are lucky, not smart. The early days of a slide may actually be single plunge at noon when you are at lunch with a 50% recovery from the drop a few days later or further decline. You have no idea how the market will act next. Attempting to time the market is a losers game. You should be in an asset allocation today that you can live with based upon your long term financial plan. Anything else is self deluding bravado. Cheers.

UpperNwGuy
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Re: Hitting The Sell Button

Post by UpperNwGuy » Thu Jan 04, 2018 10:45 am

bgf wrote:
Thu Jan 04, 2018 9:32 am
length of the equity bull market and CAPE ratio should be forbidden terms on this board.
+1

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Doom&Gloom
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Re: Hitting The Sell Button

Post by Doom&Gloom » Thu Jan 04, 2018 10:58 am

I have been pretty quick to rebalance to get to my target AA for the past year or so, but no thoughts of changing the AA.

I did accelerate my timing to scrape some "off the top" of my stock allocation this week to set aside for my first RMD. That will be less than a drop in the bucket of difference, but it does give a little bit of psychological comfort for some odd reason.

UpperNwGuy
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Re: Hitting The Sell Button

Post by UpperNwGuy » Thu Jan 04, 2018 11:03 am

Hubris wrote:
Thu Jan 04, 2018 10:15 am
And, we’re rebalancing mostly through new money since we have some major cash coming in from real estate deals, etc.
This is an enviable position to be in. Rebalancing isn't painful at all if you can do it without selling off your hard-won gains.

Da5id
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Re: Hitting The Sell Button

Post by Da5id » Thu Jan 04, 2018 11:06 am

UpperNwGuy wrote:
Thu Jan 04, 2018 10:45 am
bgf wrote:
Thu Jan 04, 2018 9:32 am
length of the equity bull market and CAPE ratio should be forbidden terms on this board.
+1
Why? Very little is "forbidden" here in discussing investing. CAPE is somewhat useful for discussing future dispersion of returns, but the huge error bars obviously make it poor for market timing or many other purposes to which it may be applied. And length of the bull market, while not very useful, may be helpful in the context of reminding people that stocks don't always go up and that they should be prepared for the inevitable correction. Of course, you can have corrections 2 years into a bull market or 8 years.

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hoppy08520
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Re: Hitting The Sell Button

Post by hoppy08520 » Thu Jan 04, 2018 11:18 am

Over the course of the bull market that began in 2009, I have gradually shifted my AA from around 80/20 to 67/33. I also gradually shifted from a 70/30 US/International stock allocation to 60/40. That's only a 13 percent shift from stocks to bonds, and I've gotten around 9 years older in that time, so that's probably about normal. I also learned about investing and Bogleheads during that time, which led me to being a bit more conservative.

I do have some regrets that I have missed out a little bit on the stock run-up by shifting some to bonds, but as I get closer to 50 and our overall portfolio rises, I would say that I feel more comfortable with that compared to, say, a Vanguard target retirement date 2035 fund which is 80/20.

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Ged
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Re: Hitting The Sell Button

Post by Ged » Thu Jan 04, 2018 11:30 am

nedsaid wrote:
Wed Jan 03, 2018 11:24 pm
At 58, it seems to be like that laurel hedge growing out of control, a big chore to maintain. This is because I am concerned about controlling my risk as I get older. Ah to be young again!

How are other older investors like me reacting to this? Am I alone in how I feel about this?
I'm 67 almost 68 so you are a whippersnapper as far as I am concerned. I'm in my delay Social Security gap so I'm selling stocks to generate income and to manage my allocation. What is amazing to me is that I expected my portfolio to be declining in value until I start on SS (2 years from now). NOT. It's up 30%.

And no I don't consider it a big chore. My investment policy is to rebalance in April and October. Years ago I created a spreadsheet that does the necessary calculations. Maybe a couple of hours work every 6 months.

If that gets to be too much I'll switch to a target date fund or some such thing. Maybe that would help you with the rebalancing blues.

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