Anyone else cashing out on *some* of the crazy earnings?

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DeerRunner
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Anyone else cashing out on *some* of the crazy earnings?

Post by DeerRunner » Thu Feb 01, 2018 10:47 am

Going to throw this out there, pretty much knowing what people are going to say. But how many others are out there, thinking the same way. Account is up a very healthy amount the last year, not to mention just the last 4 weeks (well into the 5 figures). I think the run up in the last year is 80% emotional, fueled by hopes and dreams of wonderful things that will come with the new administration. Not to get political, but I think there's a certain amount of....."irrational exuberance" 8-)

My thinking of taking a small portion of profits, to pay off a couple things, including remaining car loan is to; a) capture some earnings so when there's a correction I'll feel like I was able to take advantage of the run up, and b) if there's not a correction then dipping in will be a pretty minor amount in the scheme of things.

I understand the timing of market thing, and expect that's the major criticism. But not sure if that's what this is. Not trying to get out and time when to get in again, just using some very healthy earnings to bring down debt.

BTW, this isn't my 401k or IRA, just our brokerage acct. Yes, there will be tax implications.

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Re: Anyone else cashing out on *some* of the crazy earnings?

Post by Sandtrap » Thu Feb 01, 2018 10:49 am

Reducing debt is almost always a good plan.
j :D
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mortfree
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Re: Anyone else cashing out on *some* of the crazy earnings?

Post by mortfree » Thu Feb 01, 2018 10:50 am

I used to think the purpose of investing was to make money.

Now that I've been on here, I see that people end up donating their shares once they've made money b/c of taxes.

You may get approval for selling since you have a purpose for the money (Debt paydown) versus going to cash b/c you are scared of the market.

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Re: Anyone else cashing out on *some* of the crazy earnings?

Post by bengal22 » Thu Feb 01, 2018 10:52 am

Just so you are not disappointed, my comment would be that timing the market is a losing proposition. Capture your gains by rebalancing and just stay the course.
"Earn All You Can; Give All You Can; Save All You Can." .... John Wesley

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Re: Anyone else cashing out on *some* of the crazy earnings?

Post by EHEngineer » Thu Feb 01, 2018 10:56 am

DeerRunner wrote:
Thu Feb 01, 2018 10:47 am
Going to throw this out there, pretty much knowing what people are going to say. But how many others are out there, thinking the same way. Account is up a very healthy amount the last year, not to mention just the last 4 weeks (well into the 5 figures). I think the run up in the last year is 80% emotional, fueled by hopes and dreams of wonderful things that will come with the new administration. Not to get political, but I think there's a certain amount of....."irrational exuberance" 8-)

My thinking of taking a small portion of profits, to pay off a couple things, including remaining car loan is to; a) capture some earnings so when there's a correction I'll feel like I was able to take advantage of the run up, and b) if there's not a correction then dipping in will be a pretty minor amount in the scheme of things.

I understand the timing of market thing, and expect that's the major criticism. But not sure if that's what this is. Not trying to get out and time when to get in again, just using some very healthy earnings to bring down debt.

BTW, this isn't my 401k or IRA, just our brokerage acct. Yes, there will be tax implications.
I have about 30% more in retirement funds than my Investment policy / my plan says I should hve. I have considered reducing risk. However, my plan says that if I reduce risk I will never increase it. It's a one way commitment. I suggest you make the same commitment in order to avoid emotional mistakes.
DeerRunner wrote:
Thu Feb 01, 2018 10:47 am
My thinking of taking a small portion of profits, to pay off a couple things, including remaining car loan is to; a) capture some earnings so when there's a correction I'll feel like I was able to take advantage of the run up, and b) if there's not a correction then dipping in will be a pretty minor amount in the scheme of things.
You're already rationalizing your emotions.
Or, you can ... decline to let me, a stranger on the Internet, egg you on to an exercise in time-wasting, and you could say "I'm probably OK and I don't care about it that much." -Nisiprius

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Re: Anyone else cashing out on *some* of the crazy earnings?

Post by Texanbybirth » Thu Feb 01, 2018 10:59 am

If you're really using the money to pay down debt, then it seems like it will be almost a wash on your net worth. That is, except the taxes. There are others who are smarter when it comes to that portion; but if you've gotten over your head with some credit or just feel like you're in a good place to pay down debt given your overall financial picture, then this doesn't sound like a terrible idea. Given the last few years' returns, you've surely made more in returns than you paid in interest on that debt! :beer
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DeerRunner
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Re: Anyone else cashing out on *some* of the crazy earnings?

Post by DeerRunner » Thu Feb 01, 2018 11:07 am

Texanbybirth wrote:
Thu Feb 01, 2018 10:59 am
... Given the last few years' returns, you've surely made more in returns than you paid in interest on that debt! :beer
That's a good point. Not to confuse matters, the interest on my car loan is 0%. So, yeah, doesn't cost anything to carry that loan besides monthly payments. But again, been here before and I just believe there will be a correction. [OT comment removed by admin LadyGeek]

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Re: Anyone else cashing out on *some* of the crazy earnings?

Post by EHEngineer » Thu Feb 01, 2018 11:07 am

bengal22 wrote:
Thu Feb 01, 2018 10:52 am
Just so you are not disappointed, my comment would be that timing the market is a losing proposition. Capture your gains by rebalancing and just stay the course.
For me, in the saving phase, the rebalancing benefit has been hard to "see." Because I get paid every two weeks, and each paycheck has three investing transactions (403 / HSA / Taxable), I am executing 6-9 transactions per month. Sometimes more if I am doing my roth contribution or trying investing in multiple funds at a time. I have my model portfolio in morningstar (no contributions), and that has become more meaningful to me, and infact the only way I get a real metric of how my portfolio performed.
Or, you can ... decline to let me, a stranger on the Internet, egg you on to an exercise in time-wasting, and you could say "I'm probably OK and I don't care about it that much." -Nisiprius

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Re: Anyone else cashing out on *some* of the crazy earnings?

Post by saltycaper » Thu Feb 01, 2018 11:08 am

DeerRunner wrote:
Thu Feb 01, 2018 10:47 am

I understand the timing of market thing, and expect that's the major criticism. But not sure if that's what this is. Not trying to get out and time when to get in again, just using some very healthy earnings to bring down debt.
If you are deleveraging your stock position, you're essentially changing your asset allocation. It sounds like you're doing it based on current market conditions. Whether or not you plan to change it again in the future doesn't really matter.

I think all of this is fine, but I'm also fine with various forms of Boglehead-defined market timing, so maybe you shouldn't care what I think if you're looking for a Boglehead-approved answer.
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dmk395
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Re: Anyone else cashing out on *some* of the crazy earnings?

Post by dmk395 » Thu Feb 01, 2018 11:10 am

Pay the debt. Trust me being debt free gives you peace of mind, but then stay debt free!

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Toons
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Re: Anyone else cashing out on *some* of the crazy earnings?

Post by Toons » Thu Feb 01, 2018 11:10 am

Pay Down Debt.
Today.
Sell.
:happy
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Re: Anyone else cashing out on *some* of the crazy earnings?

Post by jebmke » Thu Feb 01, 2018 11:11 am

I have stopped re-balancing on the way up now that I have no carryover losses.
When you discover that you are riding a dead horse, the best strategy is to dismount.

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DeerRunner
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Re: Anyone else cashing out on *some* of the crazy earnings?

Post by DeerRunner » Thu Feb 01, 2018 11:13 am

dmk395 wrote:
Thu Feb 01, 2018 11:10 am
Pay the debt. Trust me being debt free gives you peace of mind, but then stay debt free!
Being debt free due to unusual/irrational market run-ups give me even more peace of mind and sweetens the deal. :D

But of course, this can't lead to negative lessons learned for the future, justifying future debt.

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Re: Anyone else cashing out on *some* of the crazy earnings?

Post by littlebird » Thu Feb 01, 2018 11:18 am

Yes, but I am 30 years into retirement with a spouse in self-pay assisted living care. Having increased our assets 525% in that time, I am now much more interested in preserving than growing. I have been aggressively taking profits and splitting them between intermediate bonds and a money market account.

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Re: Anyone else cashing out on *some* of the crazy earnings?

Post by mervinj7 » Thu Feb 01, 2018 11:23 am

Your car loan is at 0% interest. No reason to pay it off. Especially if you have to pay capital gains taxes on selling appreciated stock in order to do so. That said, it looks like I'm in the minority here.

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ResearchMed
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Re: Anyone else cashing out on *some* of the crazy earnings?

Post by ResearchMed » Thu Feb 01, 2018 11:26 am

Yes.

DH, well past regular retirement age and still getting great satisfaction from his work, decided not long ago that he now has a vague target for actual retirement.

So this run-up, far beyond anything we expected, is now generating some extra cash in preparation.

Nice.

RM
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Re: Anyone else cashing out on *some* of the crazy earnings?

Post by aristotelian » Thu Feb 01, 2018 11:33 am

saltycaper wrote:
Thu Feb 01, 2018 11:08 am

If you are deleveraging your stock position, you're essentially changing your asset allocation. It sounds like you're doing it based on current market conditions. Whether or not you plan to change it again in the future doesn't really matter.

I think all of this is fine, but I'm also fine with various forms of Boglehead-defined market timing, so maybe you shouldn't care what I think if you're looking for a Boglehead-approved answer.
The thing with debt is that he may not have intended to have a negative bond allocation to begin with. It is possible that in getting rid of his leverage, he is just getting his allocation back to what it's supposed to be.

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Re: Anyone else cashing out on *some* of the crazy earnings?

Post by Coato » Thu Feb 01, 2018 11:34 am

I have been wondering about this too. I have all my S&P and Small Cap Value in a taxable Brokerage. I allocated all of our Roth and 403/457b space and future contributions to catching up in international (1 year) and fixed income (3 years). I have been debating between taking the tax hit of selling those down or just catching up on the lagging stuff over three years...

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Re: Anyone else cashing out on *some* of the crazy earnings?

Post by bungalow10 » Thu Feb 01, 2018 11:37 am

I'm thinking about it. We are buying a house and I'm tempted to throw as much of my assets at is as I can while still being able to sleep at night in order to buy that payment down.
An elephant for a dime is only a good deal if you need an elephant and have a dime.

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Re: Anyone else cashing out on *some* of the crazy earnings?

Post by Cycle » Thu Feb 01, 2018 11:38 am

This is market timing. I timed the market to pay off the mortgage a year or two ago. I lost probably 10-15k on that due to last years spectacular gains, but I have no regrets. Debt free life is simpler.
Last edited by Cycle on Thu Feb 01, 2018 11:40 am, edited 1 time in total.
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Re: Anyone else cashing out on *some* of the crazy earnings?

Post by GoldenFinch » Thu Feb 01, 2018 11:38 am

If I had debt, I would definitely pay it off right away. I’m not doing anything except the usual periodic investing. I’ll dial back our asset allocation in seven years when we turn 58, but otherwise have no plans to do anything.

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Re: Anyone else cashing out on *some* of the crazy earnings?

Post by BogleMelon » Thu Feb 01, 2018 11:40 am

DeerRunner wrote:
Thu Feb 01, 2018 10:47 am
Not trying to get out and time when to get in again, just using some very healthy earnings to bring down debt.

BTW, this isn't my 401k or IRA, just our brokerage acct. Yes, there will be tax implications.
What kind of debts you are talking about (interest rate)? Why did you start investing in the first place if have debts that you were willing to reduce by the money you had invested before?
"One of the funny things about stock market, every time one is buying another is selling, and both think they are astute" - William Feather

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Re: Anyone else cashing out on *some* of the crazy earnings?

Post by cherijoh » Thu Feb 01, 2018 11:43 am

EHEngineer wrote:
Thu Feb 01, 2018 11:07 am
bengal22 wrote:
Thu Feb 01, 2018 10:52 am
Just so you are not disappointed, my comment would be that timing the market is a losing proposition. Capture your gains by rebalancing and just stay the course.
For me, in the saving phase, the rebalancing benefit has been hard to "see." Because I get paid every two weeks, and each paycheck has three investing transactions (403 / HSA / Taxable), I am executing 6-9 transactions per month. Sometimes more if I am doing my roth contribution or trying investing in multiple funds at a time. I have my model portfolio in morningstar (no contributions), and that has become more meaningful to me, and infact the only way I get a real metric of how my portfolio performed.
I think you must be early in the savings phase where new contributions still make a difference. I am maxing out Roth IRA (single transaction at beginning of year) and 401k (2 transactions/month) and those transactions are barely a blip on the radar. The exception is in mid-February when we get our "bonus" (usually equivalent to 3 - 4 regular paychecks) plus a voluntary employer contribution of 2% of salary. For the past few years, I have been increasing my % contribution for this pay period to get a good chunk of my annual contribution in early in the year. So I'm hoping for a really bad day on Feb 15th although I don't expect one! :wink:

If my AA gets out of whack, I have to do some rebalancing - new contributions definitely wouldn't cut it.

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JoMoney
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Re: Anyone else cashing out on *some* of the crazy earnings?

Post by JoMoney » Thu Feb 01, 2018 11:46 am

My preference would be to have paid off any debts before investing in a non-retirement account, so I would sell today to pay off a car or credit card (a very low-interest student loan or mortgage might require further considerations).

The time to reassess your willingness to take on risk is when things are going well, before you take a hit. If you're not willing to take the risks, get out while you can... but be aware that you might miss out on substantial gains. Don't expect that someone is going to sell those shares back to you at a lower price down the road.

I'll also note, that the new tax cuts, and the ability for corporations to repatriate cash at a lower rate is not just "hopes and dreams", and is likely to have a stimulative effect.
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

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Re: Anyone else cashing out on *some* of the crazy earnings?

Post by JoeRetire » Thu Feb 01, 2018 11:55 am

DeerRunner wrote:
Thu Feb 01, 2018 11:07 am
Texanbybirth wrote:
Thu Feb 01, 2018 10:59 am
... Given the last few years' returns, you've surely made more in returns than you paid in interest on that debt! :beer
That's a good point. Not to confuse matters, the interest on my car loan is 0%. So, yeah, doesn't cost anything to carry that loan besides monthly payments. But again, been here before and I just believe there will be a correction. I think the markets will crap themselves if/when Trumps indicted.
I would never hurry to pay off a 0% loan. If someone lends me free money, I'm happy to keep it as long as they will permit. I'll even volunteer to keep it forever - that's just the kind of guy I am.

There WILL be a correction. I don't think anyone here will disagree. They only question is WHEN.

If your spidey sense says "soon" and you feel compelled to take money out of the market, and you won't have regrets if your spidey sense is wrong and the market continues to rise, then try to find a better target than a 0% loan.

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Re: Anyone else cashing out on *some* of the crazy earnings?

Post by BlackHat » Thu Feb 01, 2018 3:24 pm

Well, one of my New Year's resolution was to really take the time to access my risk tolerance. I'm only 24, so I've been extremely lucky with the bull market. So, on January 1st I purchased 15% bonds. So yeah I did cash out some of my fantastic gains. I realized that you don't need bonds until you NEED bonds. Makes me much more comfortable knowing I have a ballast.
“Life is really simple, but we insist on making it complicated.” -- Confucius

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DeerRunner
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Re: Anyone else cashing out on *some* of the crazy earnings?

Post by DeerRunner » Thu Feb 01, 2018 3:35 pm

Personally, fwiw, I think your way to young to be in bonds. If your playing the long game, 40+ years to retirement, I can't see the wisdom of bonds.

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DeerRunner
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Re: Anyone else cashing out on *some* of the crazy earnings?

Post by DeerRunner » Thu Feb 01, 2018 4:43 pm

JoeRetire wrote:
Thu Feb 01, 2018 11:55 am

I would never hurry to pay off a 0% loan. If someone lends me free money, I'm happy to keep it as long as they will permit. I'll even volunteer to keep it forever - that's just the kind of guy I am.

There WILL be a correction. I don't think anyone here will disagree. They only question is WHEN.

If your spidey sense says "soon" and you feel compelled to take money out of the market, and you won't have regrets if your spidey sense is wrong and the market continues to rise, then try to find a better target than a 0% loan.
While a 0% loan IS free money, it is still a debt that needs to be repaid one way or another. So those payments need to be factored.

Good point about finding a better target vs the 0% loan (ex: HELOC at 4%).

NotWhoYouThink
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Re: Anyone else cashing out on *some* of the crazy earnings?

Post by NotWhoYouThink » Thu Feb 01, 2018 4:45 pm

If by "cashing in" you mean rebalancing when my AA got out of my tolerance bands, then yes. Otherwise no.

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Re: Anyone else cashing out on *some* of the crazy earnings?

Post by BBQ Nut » Thu Feb 01, 2018 4:49 pm

Well, being retired, and unable to offset expenses with a meager pension or interest income, I am forced to do periodic 'cashing out'.

I funded my 2018 expenses by skimming off some gains in January. I'm not trying to time anything - it's been my plan for some years to do periodic 'cashing out for annual expenses.

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Re: Anyone else cashing out on *some* of the crazy earnings?

Post by JC565 » Thu Feb 01, 2018 4:59 pm

I too believe a correction is coming. But Im not interested in cashing out. Instead, I'm stacking cash and waiting to lower my cost basis. Im also mostly invested in index funds. That said. I bought GE @30 a while back. Today I bought a good amount at 16. I don't beleive GE is at the bottom, but I also dont want to wake up tomorrow to them announcing a major engine deal and it shoots up to 24. If it drops to $5. Ill buy even more. Not because Im trying to make massive amounts of money, but because I dont beleive GE is going to go away and there isn't much room left to fall. Its your money. and its a risk either way. do what makes sense to you and the amount of risk you want to take.

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Re: Anyone else cashing out on *some* of the crazy earnings?

Post by bottlecap » Thu Feb 01, 2018 5:03 pm

OP:

I stand ready to answer your questions, should you have any.

JT

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Re: Anyone else cashing out on *some* of the crazy earnings?

Post by larryc » Thu Feb 01, 2018 5:09 pm

Yes, I think I have enough in my 529 for my grandkids' education in 7 years, so I'm moving it all from equities to 1.7% guaranteed interest. I'll move it back if the market goes down 30%.

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Re: Anyone else cashing out on *some* of the crazy earnings?

Post by retiredjg » Thu Feb 01, 2018 5:16 pm

Anyone else cashing out on *some* of the crazy earnings?
Yep. I am. Every time my stock percentage gets near it's upper limit, I sell some and buy bonds. Every time I need money, I sell stocks and spend the money.

In my situation (decumulation), it's called "rebalancing".

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Re: Anyone else cashing out on *some* of the crazy earnings?

Post by cherijoh » Thu Feb 01, 2018 6:43 pm

ResearchMed wrote:
Thu Feb 01, 2018 11:26 am
Yes.

DH, well past regular retirement age and still getting great satisfaction from his work, decided not long ago that he now has a vague target for actual retirement.

So this run-up, far beyond anything we expected, is now generating some extra cash in preparation.

Nice.

RM
+1

I do think it depends on where you are in your investing life cycle. If you have 30 years until retirement, then taking money out of stocks that is intended for retirement IS market timing. The problem is then figuring out when to get back in to the market.

However, if you are thinking about retirement in the next few years, then IMO it is a fine time to reevaluate whether or not you need to keep the same AA in order to meet your financial goals - this long bull market may have put you ahead of where you thought you would be at this point. This is especially true for anyone who is 50+ and currently has an 80/20 AA (which btw I have seen posted on Bogleheads)! :oops: If you are over 50, you need to realize that you will have a target on your back the next time there is a recession and your employer decides to thin the ranks. I have friends who thought they had plenty of time to reduce their portfolio risk before retirement and then 2008 happened! Many ended up in "forced" retirement and had to downsize their retirement budgets.

I've been strategically selling off some stock in taxable for the last few years in preparation for retirement. (I've also been donating appreciated stock to a DAF). So I've given up some of the upside that has occurred - but I'm okay with that. I still have plenty in stocks, but now I have some cash to cushion me if the stock market tanks right after I retire.

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Re: Anyone else cashing out on *some* of the crazy earnings?

Post by TallBoy29er » Thu Feb 01, 2018 8:07 pm

Toons wrote:
Thu Feb 01, 2018 11:10 am
Pay Down Debt.
Today.
Sell.
:happy
Love the succinctness. And agree completely.

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JaneyLH
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Re: Anyone else cashing out on *some* of the crazy earnings?

Post by JaneyLH » Thu Feb 01, 2018 10:43 pm

Now a few years into our retirement, my husband and I have been underspending. We decided to take advantage of the increase in our portfolio by buying a new travel trailer and committing to a pretty expensive 3-week cruise for 2019. We have immediately cashed out enough to pay for these.. about $60k. We already had a cushion of 6 months expenses. Will be watching stock market carefully and might cash out another 6 month’s of expenses.

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Re: Anyone else cashing out on *some* of the crazy earnings?

Post by Darth Xanadu » Thu Feb 01, 2018 11:42 pm

JaneyLH wrote:
Thu Feb 01, 2018 10:43 pm
Now a few years into our retirement, my husband and I have been underspending. We decided to take advantage of the increase in our portfolio by buying a new travel trailer and committing to a pretty expensive 3-week cruise for 2019. We have immediately cashed out enough to pay for these.. about $60k. We already had a cushion of 6 months expenses. Will be watching stock market carefully and might cash out another 6 month’s of expenses.
I would do this. My plan when I retire in 15+ years is to have 3-5 years of expenses to protect against having to sell in a down market.
"A courageous teacher, failure is."

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Re: Anyone else cashing out on *some* of the crazy earnings?

Post by Keepcalm » Thu Feb 01, 2018 11:59 pm

Someone correct me if I am wrong, but your going to net a loss at the end of this day based on the fact your eating a tax hit to pay off a 0% loan.

I would think that the APR on whatever it is you want to payoff would need to equal a greater amount than the taxes you would incur for the transaction to be mathematically rational.

Now, if this is strictly mental, and your mental sanity is worth more to you (which I wouldn't blame you for) than the loss your going to take on the tax hit then carry on.

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Re: Anyone else cashing out on *some* of the crazy earnings?

Post by jgdsss » Fri Feb 02, 2018 12:23 am

DeerRunner wrote:
Thu Feb 01, 2018 10:47 am
Going to throw this out there, pretty much knowing what people are going to say. But how many others are out there, thinking the same way. Account is up a very healthy amount the last year, not to mention just the last 4 weeks (well into the 5 figures). I think the run up in the last year is 80% emotional, fueled by hopes and dreams of wonderful things that will come with the new administration. Not to get political, but I think there's a certain amount of....."irrational exuberance" 8-)

My thinking of taking a small portion of profits, to pay off a couple things, including remaining car loan is to; a) capture some earnings so when there's a correction I'll feel like I was able to take advantage of the run up, and b) if there's not a correction then dipping in will be a pretty minor amount in the scheme of things.

I understand the timing of market thing, and expect that's the major criticism. But not sure if that's what this is. Not trying to get out and time when to get in again, just using some very healthy earnings to bring down debt.

BTW, this isn't my 401k or IRA, just our brokerage acct. Yes, there will be tax implications.
I'm considering the same, taking some (not all) money out of taxable brokerage to pay off mortgage. Still have money in IRAs, 401ks, etc. I'll be interested in all these replies.

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ClevrChico
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Re: Anyone else cashing out on *some* of the crazy earnings?

Post by ClevrChico » Fri Feb 02, 2018 12:26 am

I have been tempted to buy a $3k watch. I'm still wearing my Casio.

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Re: Anyone else cashing out on *some* of the crazy earnings?

Post by barnaclebob » Fri Feb 02, 2018 12:35 am

I cashed in big time and used it to move up to a waaaay better house. Houses as good for us as this one that we can also afford might come on the market once a year if that. The market could double next year but I wont lose sleep over it.

The decision to cash in wasnt because the market went up but it was enabled by it. I get to learn about some new rich people taxes this year too...

TonyDAntonio
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Re: Anyone else cashing out on *some* of the crazy earnings?

Post by TonyDAntonio » Fri Feb 02, 2018 12:36 am

bengal22 wrote:
Thu Feb 01, 2018 10:52 am
Just so you are not disappointed, my comment would be that timing the market is a losing proposition. Capture your gains by rebalancing and just stay the course.
I'm rebalancing into money market funds, ibonds, guaranteed interest funds and a new car, well above amounts that I have held before in 'cash'. I guess I'm losing but it will feel like I'm winning if the market ever goes down. Heck, it feels like I'm winning even now. I now have enough spending money to get me through many years of retirement without selling any more stock and I still have more invested in the stock market (on a dollar amount) than I did when I retired almost 3 years ago.

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dodecahedron
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Re: Anyone else cashing out on *some* of the crazy earnings?

Post by dodecahedron » Fri Feb 02, 2018 7:59 am

Yes, I have been stunned to see my assets growing so fast when others nearby still have so little. I am acutely aware that tax cuts are part of what is driving up the stock market and I worry about the impact of corresponding government budget tightening where the writing is already on the wall.

I have moved up my charitable giving plans. I had been planning to do most of my charitable giving after reaching RMD age. Donating my highly appreciated securities now to help vital but struggling nonprofits that do inspiring work in a high poverty neighborhood is the most rewarding way I can think of to "cash out" in the current environment.

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Re: Anyone else cashing out on *some* of the crazy earnings?

Post by Bigfish » Fri Feb 02, 2018 8:15 am

I have been taking and spending some of the cash for fun things. We did a bike trip in France for DW's 70th birthday. Took a couple of fishing trips that I usually don't take. When we retired the plan was to spend some money during the during the market up turns and cut non-essential spending when the market dips. I continue to check the numbers with Fire-Calc and make sure I'm still 95% or more.
BF

Bigfish
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Re: Anyone else cashing out on *some* of the crazy earnings?

Post by Bigfish » Fri Feb 02, 2018 8:19 am

I have been taking and spending some of the cash for fun things. We did a bike trip in France for DW's 70th birthday. Took a couple of fishing trips that I usually don't take. When we retired the plan was to spend some money during the during the market up turns and cut non-essential spending when the market dips. I continue to check the numbers with Fire-Calc and make sure I'm still 95% or more.
BF

Shallowpockets
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Re: Anyone else cashing out on *some* of the crazy earnings?

Post by Shallowpockets » Fri Feb 02, 2018 8:58 am

If you took your gains that you have seen just in this year 2018 and whittled it back to the same amount you had on last trading day December 2018, it could be a prudent thing to do.
Make sure you look at tax implications.
You don't even have to pull out the whole difference. Take away that which you need to feel good about being ahead of the game. It is not all or nothing.
Don't know what your actual gains or base savings are, but even if in the two comma club, to skim off 10k seems like a big win if you see your assets drop going forward. Maybe that will not happen, but it is almost a win win situation. You take that 10k and even if the market rallied 50% over the rest of the year, you would only have made 5k more on that 10k.
The market could easily affect your assets by dropping 10k overall.
So you psychologically balance that loss of 10k to having it in hand against the possibility of leaving it in for that (50%) gain on it for another 5k. Good luck to all of us if the market rises another 50%.

The big implication for me is the taxes. In retirement I have no withholding so it comes straight it of my pocket and also affects my medicare payments if I go over certain amounts.
For me this is a stumbling block.

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DeerRunner
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Re: Anyone else cashing out on *some* of the crazy earnings?

Post by DeerRunner » Fri Feb 02, 2018 10:05 am

TallBoy29er wrote:
Thu Feb 01, 2018 8:07 pm
Toons wrote:
Thu Feb 01, 2018 11:10 am
Pay Down Debt.
Today.
Sell.
:happy
Love the succinctness. And agree completely.
It was definitely a "succinct" comment, wasn't sure if he was being tongue-in-cheek in terms of selling "today".

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DeerRunner
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Re: Anyone else cashing out on *some* of the crazy earnings?

Post by DeerRunner » Fri Feb 02, 2018 10:11 am

Keepcalm wrote:
Thu Feb 01, 2018 11:59 pm
Someone correct me if I am wrong, but your going to net a loss at the end of this day based on the fact your eating a tax hit to pay off a 0% loan.

I would think that the APR on whatever it is you want to payoff would need to equal a greater amount than the taxes you would incur for the transaction to be mathematically rational.

Now, if this is strictly mental, and your mental sanity is worth more to you (which I wouldn't blame you for) than the loss your going to take on the tax hit then carry on.
I think the one factor your not considering is if you believe there will be a correction or not, and if you (like myself) want to take advantage of the very favorable returns over the last year. Granted, even if there is a correction, then some day we'll recover and the market will outperform even where it is now. I'm usually very unaffected by fluctuations and held on with white knuckles through '08-09. Sometimes you have to be willing to reap the rewards when you think their *almost* too good to be true.

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DeerRunner
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Re: Anyone else cashing out on *some* of the crazy earnings?

Post by DeerRunner » Fri Feb 02, 2018 10:15 am

ClevrChico wrote:
Fri Feb 02, 2018 12:26 am
I have been tempted to buy a $3k watch. I'm still wearing my Casio.
I bought a $3k Omega when I sold my first house by myself. At a healthy profit. It was a splurge but a nice reminder (even 15+ years later) and a point of pride for taking a risk to sell myself. Some things in life are more than a number in a bank account.

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