Too Late To Get Back Into Stocks?

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Retiredat57
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Too Late To Get Back Into Stocks?

Post by Retiredat57 » Wed Sep 11, 2019 3:25 pm

Last month, after one too many tweets that costing me at closing time, I decided to bail out of stocks just above DOW 26,000, at least until this trade war gets settled. Now that the Dow is above 27,000 and very close to the 52-week high I'm not too keen on testing my luck and the market's ability to continue on upward at these levels. Now, I have my money in S.T. bonds and U.S. Treasuries for safety. Unless I get sufficient confidence that this rally has legs, I'm going to wait until the next significant drop (at least 10%) before buying back into equities. With this rally and the "witching month" of October just around the corner, the wait could be short for a good buying opportunity. I'm aware of all the admonitions about timing the market, but at this point I don't see any other option.

I'm a fairly risk-averse conservative investor with $2.1M in investment assets at Vanguard. Before I sold equities, my AA was 60 Debt/35 Equities/5% Cash. I'm now at 75% S.T. debt/5% equities/20% cash. I don't want to stay this much on the sidelines any longer than necessary, but am very wary of investing in equities at these levels. Any advise from this group is welcomed.
Last edited by Retiredat57 on Wed Sep 11, 2019 5:03 pm, edited 1 time in total.

livesoft
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Re: Too Late To Get Back Into Stocks?

Post by livesoft » Wed Sep 11, 2019 4:02 pm

There are many different stocks than just the Dow stocks. Some of those were selling lower recently than even a year ago. Some are close to where they were a year ago.

Examples:

US Small-cap value stocks in the form of VSIAX, 1-year total return through yesterday: -6.1% (and that's after an 8% gain the previous 2 days!) Added: VSIAX was down 10% from a year ago as recently as last week, so you just missed your chance to buy low. :oops:

International stocks in the form of VTIAX, 1-year return through yesterday: 1.3%

So it sure seems to me that you can find some stock index fund to buy if you really wanted to.
Last edited by livesoft on Wed Sep 11, 2019 4:09 pm, edited 2 times in total.
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friar1610
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Re: Too Late To Get Back Into Stocks?

Post by friar1610 » Wed Sep 11, 2019 4:03 pm

Retiredat57 wrote:
Wed Sep 11, 2019 3:25 pm
Last month, after one too many tweets that costing me at closing time, I decided to bail out of stocks just above DOW 26,000, at least until this trade war gets settled. Now that the Dow is above 27,000 and very close to the 52-week high I'm not too keen on testing my luck and the market's ability to continue on upward at these levels. Now, I have my money in S.T. bonds and U.S. Treasuries for safety. Unless I get sufficient confidence that this rally has legs, I'm going to wait until the next significant drop (at least 10%) before buying back into equities. With this rally and the "witching month" of October just around the corner, the wait could be short for a good buying opportunity. I'm aware of all the admonitions about timing the market, but at this point I don't see any other option.

I'm a fairly risk-averse conservative investor with $2.1M in investment assets at Vanguard. Before I sold equities, my AA was 60 Debt/35 Equities/5% Cash. I'm now at 75% S.T. debt/5% equities/20% cash. I don't want to stay this much on the sidelines any longer than necessary, but am not willing to invest in equities at these levels. Any advise from this group is welcomed.
Sounds like you had - until you sold - the perfect AA for a risk-averse investor. If and when you get back in to equities that would be a good target AA but this time around you should "stay the course", to coin a phrase. I'd like to suggest precisely when to get back in, but damned if I know.
Friar1610

robertmcd
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Re: Too Late To Get Back Into Stocks?

Post by robertmcd » Wed Sep 11, 2019 4:03 pm

Eliminate cash as an asset class.

10% US stocks
90% short term treasuries

25% US stocks
75% intermediate treasuries

Personally the 25% stocks, 75% intermediate treasuries portfolio is the lowest risk portfolio I would probably ever want to hold.

Only other option I would consider is a bunch of CD's where you can earn a substantial premium vs. treasuries right now. This would be if you were not willing to increase your equity allocation up from 5%.

bloom2708
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Re: Too Late To Get Back Into Stocks?

Post by bloom2708 » Wed Sep 11, 2019 4:08 pm

The DOW is 30 stocks. It goes up and down. Up and down.

I would go back to 35% to 40% stocks (Total US, Total International for 15%).

Then just stop looking every day. Spend time here. Review the 10 Boglehead principles. Stay the course. Really. Stay the course.
"We are not here to agree with you; we are here to provoke thoughtfulness." Unknown Boglehead

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FelixTheCat
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Re: Too Late To Get Back Into Stocks?

Post by FelixTheCat » Wed Sep 11, 2019 4:09 pm

I think your asset allocation is wrong for you if you are listening to the daily market noise. Here are Vanguard portfolio allocation models https://personal.vanguard.com/us/insigh ... llocations Here's a questionaire to help you determine your AA https://personal.vanguard.com/us/FundsInvQuestionnaire

Boglehead philosophy is to create a set-and-forget portfolio. We are not market timers.
Felix is a wonderful, wonderful cat.

JoeRetire
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Re: Too Late To Get Back Into Stocks?

Post by JoeRetire » Wed Sep 11, 2019 4:18 pm

Retiredat57 wrote:
Wed Sep 11, 2019 3:25 pm
Last month, after one too many tweets that costing me at closing time, I decided to bail out of stocks just above DOW 26,000, at least until this trade war gets settled.

I don't want to stay this much on the sidelines any longer than necessary, but am not willing to invest in equities at these levels. Any advise from this group is welcomed.
The trade war is a long, long way from being "settled". (BTW, what does "settled" actually mean to you? How would you know if it becomes "settled"?)

Plan on staying as you are for the long haul.

Good luck.

Topic Author
Retiredat57
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Re: Too Late To Get Back Into Stocks?

Post by Retiredat57 » Wed Sep 11, 2019 4:23 pm

Comments are appreciated. [OT comment removed by admin LadyGeek]

I've used the VG asset allocation questionnaires and generally I tend to follow them, perhaps a bit more conservatively than recommended. I'm just very wary of the lack of competence in our current top leadership. I think I'd feel better putting my money at risk with someone (anyone) else at the helm. At times, I really fear that another financial crisis resulting from this unconventional type of leadership is just around the corner and this time there won't be a knowledgeable brain trust in place to address it, like in 2008. Perhaps, that just my own personal quirk when it comes to risk tolerance. Call it instinct or gut feeling, but it helps me sleep at night.
Last edited by Retiredat57 on Wed Sep 11, 2019 4:33 pm, edited 4 times in total.

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Sheepdog
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Re: Too Late To Get Back Into Stocks?

Post by Sheepdog » Wed Sep 11, 2019 4:24 pm

robertmcd wrote:
Wed Sep 11, 2019 4:03 pm
Eliminate cash as an asset class.

10% US stocks
90% short term treasuries

25% US stocks
75% intermediate treasuries

Personally the 25% stocks, 75% intermediate treasuries portfolio is the lowest risk portfolio I would probably ever want to hold.

Only other option I would consider is a bunch of CD's where you can earn a substantial premium vs. treasuries right now. This would be if you were not willing to increase your equity allocation up from 5%.
Yes......
It's not what you gather, but what you scatter which tells what kind of life you have lived---Helen Walton

livesoft
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Re: Too Late To Get Back Into Stocks?

Post by livesoft » Wed Sep 11, 2019 4:25 pm

May I ask then what was the exact purpose of your posting here? What did you expect to accomplish? Thanks!
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KBREAMK
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Re: Too Late To Get Back Into Stocks?

Post by KBREAMK » Wed Sep 11, 2019 4:28 pm

livesoft wrote:
Wed Sep 11, 2019 4:25 pm
May I ask then what was the exact purpose of your posting here? What did you expect to accomplish? Thanks!
+1

Topic Author
Retiredat57
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Re: Too Late To Get Back Into Stocks?

Post by Retiredat57 » Wed Sep 11, 2019 4:30 pm

livesoft wrote:
Wed Sep 11, 2019 4:25 pm
May I ask then what was the exact purpose of your posting here? What did you expect to accomplish? Thanks!
To get others' takes on my personal investments in a forum dedicated to personal investing, which I did.
Last edited by Retiredat57 on Wed Sep 11, 2019 4:37 pm, edited 1 time in total.

EnjoyIt
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Re: Too Late To Get Back Into Stocks?

Post by EnjoyIt » Wed Sep 11, 2019 4:37 pm

Retiredat57 wrote:
Wed Sep 11, 2019 4:23 pm
Comments are appreciated. "Settled" to me means the removal of all Trump tariffs on imported goods, which may not occur until #46 gets sworn in.

I've used the VG asset allocation questionnaires and generally I tend to follow them, perhaps a bit more conservatively than recommended. I'm just very wary of the lack of competence in our current top leadership. I think I'd feel better putting my money at risk with someone (anyone) else at the helm. At times, I really fear that another financial crisis resulting from this unconventional type of leadership is just around the corner and this time there won't be a knowledgeable brain trust in place to address it, like in 2008. Perhaps, that just my own personal quirk when it comes to risk tolerance. Despite what I'm seeing, I sense that there's not a whole lot of upside now in the markets short-term. Call it instinct or gut feeling, but it helps me sleep at night.
You realize that there is a large subset of people out there who think the exact opposite of you. I'm not saying this to start a debate on politics which is off limits on this forum. I am saying that because no one knows anything and to be completely blunt, it is very unlikely that you can predict the future either.

Just to put it out there, many people sold once the results of the 2016 election came in due to fear of their president. Those people made a mistake and now trying to figure out how to get back in or still scared of what the current president will do and have not bought back in. I repeat, no one can predict the future.

There is a chance you will be holding onto your bag of cash till 2020 and maybe even 2024.
Last edited by EnjoyIt on Wed Sep 11, 2019 4:54 pm, edited 1 time in total.

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Retiredat57
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Re: Too Late To Get Back Into Stocks?

Post by Retiredat57 » Wed Sep 11, 2019 4:45 pm

Yes, I understand that. I was one of those who did pull back significantly in Nov '16 and lost out. I don't regret that decision. I gradually got back in in 2017 and have done okay. Thanks again to those who provided their on topic insights.

EnjoyIt
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Re: Too Late To Get Back Into Stocks?

Post by EnjoyIt » Wed Sep 11, 2019 4:55 pm

Retiredat57 wrote:
Wed Sep 11, 2019 4:45 pm
Yes, I understand that. I was one of those who did pull back signficantly in Nov '16 and lost out. I don't regret that decision. I gradually got back in in 2017 and have done okay.
Why don't you regret that decision?
I think I would have regretted it.

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vineviz
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Re: Too Late To Get Back Into Stocks?

Post by vineviz » Wed Sep 11, 2019 5:00 pm

Retiredat57 wrote:
Wed Sep 11, 2019 4:45 pm
Yes, I understand that. I was one of those who did pull back signficantly in Nov '16 and lost out. I don't regret that decision. I gradually got back in in 2017 and have done okay.
You asked for my advice, so here's mine: reflect on this statement ("I was one of those who did pull back signficantly in Nov '16 and lost out.") until you realize WHY you SHOULD regret that decision.

No doubt you have tremendous skills in many areas of life, but the killer fact is that - no matter what those skills are - they can not equip you to profitably outsmart the collective wisdom of global financial markets.

The only way to win the market timing game is to not play it. It's a losers game, so don't join in.

Set your asset allocation at an appropriately conservative level (I like the idea of 25% stocks and 75% treasury bonds mentioned above) and NEVER TOUCH IT AGAIN. Seriously.
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch

ponyboy
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Re: Too Late To Get Back Into Stocks?

Post by ponyboy » Wed Sep 11, 2019 5:01 pm

If you cant stand the heat, get out of the kitchen. It seems like you're investing with emotions...not a good sign. Market timing rarely ends well. Best of luck to you.

Hustlinghustling
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Re: Too Late To Get Back Into Stocks?

Post by Hustlinghustling » Wed Sep 11, 2019 5:05 pm

Retiredat57 wrote:
Wed Sep 11, 2019 4:45 pm
Yes, I understand that. I was one of those who did pull back significantly in Nov '16 and lost out. I don't regret that decision. I gradually got back in in 2017 and have done okay.
Seems your behaviour is that when confronted with perceived higher risk, you treat a sustained market (as the one you jumped in on midway 2017) as having "settled" the situation. This ensures you leave gains off the table every time.

Given that, I'd bet that your "gut" finally feels comfortable to enter the market again if you see another 6 months of gains from today. In which case, you should've just been holding the whole time.

bikechuck
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Re: Too Late To Get Back Into Stocks?

Post by bikechuck » Wed Sep 11, 2019 5:06 pm

Retiredat57 wrote:
Wed Sep 11, 2019 4:23 pm
Comments are appreciated. "Settled" to me means the removal of all Trump tariffs on imported goods, which may not occur until #46 gets sworn in.

I've used the VG asset allocation questionnaires and generally I tend to follow them, perhaps a bit more conservatively than recommended. I'm just very wary of the lack of competence in our current top leadership. I think I'd feel better putting my money at risk with someone (anyone) else at the helm. At times, I really fear that another financial crisis resulting from this unconventional type of leadership is just around the corner and this time there won't be a knowledgeable brain trust in place to address it, like in 2008. Perhaps, that just my own personal quirk when it comes to risk tolerance. Call it instinct or gut feeling, but it helps me sleep at night.
I share your concerns but I am just derisking a bit and moving from 50% equities to 40%. In part because of the points you raised but also in part because I am recently retired and people I respect like Rick Ferri suggest that 35% equities are a good place to be for the mythical average retiree investor. After dialing back to 40% I might implement a rising glide path as suggested by Wafe Pfau and others.

Topic Author
Retiredat57
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Re: Too Late To Get Back Into Stocks?

Post by Retiredat57 » Wed Sep 11, 2019 5:22 pm

Hustlinghustling wrote:
Wed Sep 11, 2019 5:05 pm
Retiredat57 wrote:
Wed Sep 11, 2019 4:45 pm
Yes, I understand that. I was one of those who did pull back significantly in Nov '16 and lost out. I don't regret that decision. I gradually got back in in 2017 and have done okay.
Seems your behaviour is that when confronted with perceived higher risk, you treat a sustained market (as the one you jumped in on midway 2017) as having "settled" the situation. This ensures you leave gains off the table every time.

Given that, I'd bet that your "gut" finally feels comfortable to enter the market again if you see another 6 months of gains from today. In which case, you should've just been holding the whole time.
Yes, you are correct. However, had the market turned down I would have benefited. Based on the sentiments being expressed at the time, I was not alone in pulling back in late 2016 and this action was commensurate with the risk I perceived to financial markets. Yes, there was some emotion involved, but there was also logic based on everything I had read and heard. All that's water under the bridge now. I'm looking forward and specifically what to do now given where we are. I do like some of the suggestions above.

epictetus
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Re: Too Late To Get Back Into Stocks?

Post by epictetus » Wed Sep 11, 2019 5:31 pm

if you put aside X years of expenses in something safe (1,5,10,15,20; whatever number you would be comfortable with) and invest the rest however you see fit you might have less stress/be less likely to make big moves into and out of the market.

the key is to find a plan/method you can stick with through thick and thin.
Focus on what you can control

sbaywriter
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Re: Too Late To Get Back Into Stocks?

Post by sbaywriter » Wed Sep 11, 2019 5:33 pm

I'm surprised no one has suggested dollar cost averaging back in. Choose an equity allocation per the many good suggestions above, then invest 10 percent a month or something like that.

Although it's possible you want to pause a while in the months leading up to the next election so that you won't be tempted to pull it all back out again.

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Retiredat57
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Re: Too Late To Get Back Into Stocks?

Post by Retiredat57 » Wed Sep 11, 2019 5:38 pm

epictetus wrote:
Wed Sep 11, 2019 5:31 pm
if you put aside X years of expenses in something safe (1,5,10,15,20; whatever number you would be comfortable with) and invest the rest however you see fit you might have less stress/be less likely to make big moves into and out of the market.

the key is to find a plan/method you can stick with through thick and thin.
Thank you. I think that's a very reasonable path forward. The amount or percentage I put at risk will likely be lower than many in my circumstances. In absolute dollars, it'd be very hard for me to passively watch a 10%-25% drop of my stock portfolio. Therefore, I really need to limit my at risk dollars at the cost of lower returns over the long run.

Topic Author
Retiredat57
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Re: Too Late To Get Back Into Stocks?

Post by Retiredat57 » Wed Sep 11, 2019 5:39 pm

sbaywriter wrote:
Wed Sep 11, 2019 5:33 pm
I'm surprised no one has suggested dollar cost averaging back in. Choose an equity allocation per the many good suggestions above, then invest 10 percent a month or something like that.

Although it's possible you want to pause a while in the months leading up to the next election so that you won't be tempted to pull it all back out again.
Pulling back again between now and then would be a real possibility. As I said, if the trade war ends, then I will re-evaluate and likely look at the current situation differently.
Last edited by Retiredat57 on Wed Sep 11, 2019 5:45 pm, edited 3 times in total.

ponyboy
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Re: Too Late To Get Back Into Stocks?

Post by ponyboy » Wed Sep 11, 2019 5:42 pm

I like how this is becoming a political thread. Going to be closed in 3....2....1....

BeanCity
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Re: Too Late To Get Back Into Stocks?

Post by BeanCity » Wed Sep 11, 2019 5:45 pm

EnjoyIt wrote:
Wed Sep 11, 2019 4:55 pm
Retiredat57 wrote:
Wed Sep 11, 2019 4:45 pm
Yes, I understand that. I was one of those who did pull back signficantly in Nov '16 and lost out. I don't regret that decision. I gradually got back in in 2017 and have done okay.
Why don't you regret that decision?
I think I would have regretted it.
Why don't you regret it? You lost money because you made a timing decision based on your perceived risks in the market. The whole Bogleheads philosophy is that you find a diversified risk tolerance you can handle, mostly based on age, that you don't touch whatever the circumstances. You are market timing, and you are letting politics pull you away from Bogleheads philosophy.

For every person that thinks the current administration is crazy, there is someone who thinks they are brilliant. The reality is we don't know for sure, and that is the point of being diversified.

MarkBarb
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Re: Too Late To Get Back Into Stocks?

Post by MarkBarb » Wed Sep 11, 2019 5:47 pm

Interesting. You say that you are risk averse, but you jump in and out of the market based on some notion that you can out think the market. That seems much riskier than just picking a comfortable allocation and sticking with it.

Topic Author
Retiredat57
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Re: Too Late To Get Back Into Stocks?

Post by Retiredat57 » Wed Sep 11, 2019 5:47 pm

I don't regret it because I acted on the information I had at the time, not 20/20 hindsight. I acted accordingly based on my risk tolerance.

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JMacDonald
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Re: Too Late To Get Back Into Stocks?

Post by JMacDonald » Wed Sep 11, 2019 5:49 pm

You need to find the correct asset allocation for yourself. Read this article to help you find the correct asset allocation:
https://www.kevinoninvesting.com/2010/0 ... rance.html
Best Wishes, | Joe

bradinsky
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Re: Too Late To Get Back Into Stocks?

Post by bradinsky » Wed Sep 11, 2019 5:57 pm

Fake news year for sure!

surfstar
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Re: Too Late To Get Back Into Stocks?

Post by surfstar » Wed Sep 11, 2019 6:02 pm

Retiredat57 wrote:
Wed Sep 11, 2019 5:47 pm
I don't regret it because I acted on the information I had at the time, not 20/20 hindsight. I acted accordingly based on my risk tolerance.
It wasn't real information. The financial news you read, unless HISTORICAL, is all worthless. NO ONE can predict the market's future. Keep reading that until you understand it and believe it. Anything beyond that is just speculation and you have seen how it has failed you twice in the last 3 years.

You changed your investments based on emotions - not information. Not a change in risk tolerance - your risk tolerance was the same; but your emotions overcame you and you sold at an inopportune time. You should regret that decision and try to figure out how not to make a similar mistake.


Finally - what are your expenses? What is your age? What is your calculated SWR? Unless you are living on the edge of a too high SWR, you might be putting yourself and your finances through all of this turmoil for nothing.

Cash is King
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Re: Too Late To Get Back Into Stocks?

Post by Cash is King » Wed Sep 11, 2019 6:08 pm

surfstar wrote:
Wed Sep 11, 2019 6:02 pm
Retiredat57 wrote:
Wed Sep 11, 2019 5:47 pm
I don't regret it because I acted on the information I had at the time, not 20/20 hindsight. I acted accordingly based on my risk tolerance.
It wasn't real information. The financial news you read, unless HISTORICAL, is all worthless. NO ONE can predict the market's future. Keep reading that until you understand it and believe it. Anything beyond that is just speculation and you have seen how it has failed you twice in the last 3 years.

You changed your investments based on emotions - not information. Not a change in risk tolerance - your risk tolerance was the same; but your emotions overcame you and you sold at an inopportune time. You should regret that decision and try to figure out how not to make a similar mistake.


Finally - what are your expenses? What is your age? What is your calculated SWR? Unless you are living on the edge of a too high SWR, you might be putting yourself and your finances through all of this turmoil for nothing.
Well said!!

bampf
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Re: Too Late To Get Back Into Stocks?

Post by bampf » Wed Sep 11, 2019 6:08 pm

Retiredat57 wrote:
Wed Sep 11, 2019 5:47 pm
I don't regret it because I acted on the information I had at the time, not 20/20 hindsight. I acted accordingly based on my risk tolerance.
But the whole point is you reacted in a way that indicated you thought you knew something and you really didn't (or what you knew was wrong). Put another way, "You have less money now than you would have had you not reacted."

Which is kind of the whole point of this board.

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Wiggums
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Re: Too Late To Get Back Into Stocks?

Post by Wiggums » Wed Sep 11, 2019 6:12 pm

It sounds like you are trying to preserve your account balance. Now that you are out of the market, you want a 10% dip to get a bargain?

I’d encourage you to think long term and big picture. Your AA has to be right for you. Time in the market is your friend. A significant dip can happen at anytime.

Any money that I have in equities is there for the long haul. So I don’t pay attention to financial show hosts, their guests or social media. It’s too easy to get caught up in the noise.

I keep enough fixed income, that allows me me to stay the course with equities. You have a conservative portfolio. We don’t know enough about you and portfolio to focus on anything but the emotional side to investing. A lot of us have been in your position.

My advise is to ignore the news because it is not actionable and stick to your investment plan.

surfstar
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Re: Too Late To Get Back Into Stocks?

Post by surfstar » Wed Sep 11, 2019 6:16 pm

Oh, and I apologize for myself and others if you find our posts a bit on the blunt side. We do care and are trying to get through to you, and provide better information that what you had previously counted on. Some Bogleheads may say it in a softer/nicer way - the main goal is that we can get you to learn from any mistakes and how to prevent their recurrence.

I've read members who have advised others or even have it written in their IPS (Investment Policy Statement) - something along the lines of "If I feel like a drastic change in my strategy is needed, wait six months and revisit." Sometimes the hardest thing to do is nothing. "Don't just stand there, do nothing!" - I believe that is someone's signature line.

Instead of drastically changing your investments, read Bogleheads for six months. It would serve you much better - we just want you to see/realize that for yourself.

:sharebeer

ivk5
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Re: Too Late To Get Back Into Stocks?

Post by ivk5 » Wed Sep 11, 2019 6:19 pm

1. You may be conflating volatility and risk, although they are not the same. Risk statements can be framed in terms of a likelihood and an impact.

2. This is one of the few certainties in investing: you can take what the market gives over the long term (acceptance), notwithstanding substantial volatility in the short to medium term; or you can risk doing worse trying to do better (call it hubris).

Acceptance has been well rewarded historically. The future is unknown of course.

3. If you do not believe that future equities returns over the long term will be sufficient to meet your financial goals, you have options besides trying to get in and out at the right times. You can save more, work longer, reduce retirement expenses/accumulation target, etc.

You may also believe another asset class will provide higher long-term returns than equities going forward. In that case you might consider allocating more to whatever that asset class is. This has not been true in the past, and many believe that the past - while not a good predictor of the future - may be less bad at predicting the future than other available alternatives. But you could still be right.

The above might all be more rational than believing, as you apparently do, that while future long term equities prospects are unacceptable, the Retiredat57-timed equities index is the best risk-adjusted return for your hard-earned savings.

Edited to add: I don’t think “conservative” is a good word to describe allocations of less than 30% to equities, aside from Liability Matching Portfolios, since inflation risk becomes a significant unmanaged risk.
Last edited by ivk5 on Wed Sep 11, 2019 6:33 pm, edited 1 time in total.

Compound
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Re: Too Late To Get Back Into Stocks?

Post by Compound » Wed Sep 11, 2019 6:28 pm

While I agree with the main premise others are writing about (namely: market timing is a fools errand), at least it seems the OP is timing on the lower end of the stock:bond asset allocation and has considerable assets to work with. As such, I’m doubtful this move (however ill-conceived it may be) will result in a huge decrement to the portfolio (excepting substantially limiting the upside potential for the portfolio) given the low volatility of the assets chosen to move into.

Now, let’s say at some point the OP thinks the geopolitical situation becomes highly favorable, what will the OP do then? Go back to the original allocation? If so, and the OP is wrong on the market direction at that point, overall damage to the portfolio is likely to be limited given the limited stock exposure. In contrast, swinging to a high stock allocation would put the OP at substantial risk of stock market volatility and could do serious damage to their portfolio size.

If the OP has “won the game” and has enough assets to project a comfortable retirement at a calculated safe SWR despite the low expected returns on their adjusted portfolio, I see minimal risk of this protectionist market timing move. If however, the OP needs stock gains to have a secure retirement, then I’d worry substantially more about doing this.

All that said — don’t market time. Just pick a comfortable asset allocation that is aligned and balanced between your need, ability, and willingness to take risk to have a secure retirement and stick to it through thick and thin.

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Stinky
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Re: Too Late To Get Back Into Stocks?

Post by Stinky » Wed Sep 11, 2019 6:29 pm

Retiredat57 wrote:
Wed Sep 11, 2019 5:47 pm
I don't regret it because I acted on the information I had at the time, not 20/20 hindsight. I acted accordingly based on my risk tolerance.
Those who provided information to you as you've moved in and out of the market since late 2016 don't know nothing.

S&P closing price 11/8/16 (Election Day) = 2139.56
S&P closing price 9/11/19 (today) = 3000.93

Price appreciation in the last 34 months = 40.5% (plus dividends)

My advice to you is:
(1) Pick an asset allocation that you feel comfortable with, through thick and thin
(2) Turn off the financial TV shows
(3) Turn off the political TV shows
(4) Understand that the "financial gurus", "market forecasters", etc. don't have any special insight into the future
(5) Stay the course with your chosen asset allocation
It's a GREAT day to be alive - Travis Tritt

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Retiredat57
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Re: Too Late To Get Back Into Stocks?

Post by Retiredat57 » Wed Sep 11, 2019 6:32 pm

I do very much appreciate the responses and feel that I have gotten what I came for. I just need to arrive at a tolerable amount of funds that I am okay with putting into stocks and then leave it alone. I am in a position where I wouldn't have to touch my retirement monies for several years as 50% of my total portfolio are in taxable non-retirement funds, most of that invested in CA municipal bonds (VCADX, VCLAX) to avoid Fed/CA taxation. I do realize that my methodology up til now does not strictly conform to a "buy and hold" strategy, which is largely promoted here and expected some blowback within the responses. I am carefully reading and considering all responses and do appreciate them in the spirit they are given. Thanks again to all.

delamer
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Re: Too Late To Get Back Into Stocks?

Post by delamer » Wed Sep 11, 2019 7:00 pm

My advice is that you are making a mistake by timing the market, since you asked for advice.

You are investing in a financial product (equities) that should be held for the long-term, but making decisions based on short term factors.

You also should consider that you are missing out on dividends when you get out of equities. So whatever happens to prices, you are assured of losing the ability to earn and reinvest dividends — a substantial portion of total returns — when you sell equities.

I am curious if there were any immediate tax consequences to your decision to change your allocation? Or is everything in tax-advantaged accounts?

JoeRetire
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Re: Too Late To Get Back Into Stocks?

Post by JoeRetire » Wed Sep 11, 2019 7:09 pm

Retiredat57 wrote:
Wed Sep 11, 2019 4:23 pm
"Settled" to me means the removal of all Trump tariffs on imported goods, which may not occur until #46 gets sworn in.
Okay. So we are likely at least 16 months away from that. Tariff removal doesn't seem imminent.
I'm just very wary of the lack of competence in our current top leadership. I think I'd feel better putting my money at risk with someone (anyone) else at the helm. At times, I really fear that another financial crisis resulting from this unconventional type of leadership is just around the corner and this time there won't be a knowledgeable brain trust in place to address it, like in 2008. Perhaps, that just my own personal quirk when it comes to risk tolerance. Call it instinct or gut feeling, but it helps me sleep at night.
Yup. So no need to worry for at least over a year. Then you can choose to take action or not.

Many decide to pay an extra price for additional sleep.

JoeRetire
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Re: Too Late To Get Back Into Stocks?

Post by JoeRetire » Wed Sep 11, 2019 7:12 pm

bikechuck wrote:
Wed Sep 11, 2019 5:06 pm
I share your concerns but I am just derisking a bit and moving from 50% equities to 40%. In part because of the points you raised but also in part because I am recently retired and people I respect like Rick Ferri suggest that 35% equities are a good place to be for the mythical average retiree investor. After dialing back to 40% I might implement a rising glide path as suggested by Wafe Pfau and others.
So why aren't you dialing back to 35% ?
Just curious.

sambb
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Re: Too Late To Get Back Into Stocks?

Post by sambb » Wed Sep 11, 2019 7:14 pm

Past performance has nothing to do with future results.
If you think the market will go up in the long term, then invest.
If you are unsure, nervous, or will pull out, then dont.

At 30-40% equities, it is a small amount of risk overall, but maybe the psychology of risk is stronger than objectivity. There still is risk. You have lowered your risk and lowered your return by getting out. Nothing wrong with that.

I think you need to assess your risk tolerance. Can you live with a 30% decline? 50 %?

ivk5
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Re: Too Late To Get Back Into Stocks?

Post by ivk5 » Wed Sep 11, 2019 7:17 pm

sambb wrote:
Wed Sep 11, 2019 7:14 pm
You have lowered your risk and lowered your return by getting out. Nothing wrong with that.
The problem is that the in and out churn may be lower return without lower risk.

JoeRetire
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Re: Too Late To Get Back Into Stocks?

Post by JoeRetire » Wed Sep 11, 2019 7:17 pm

Retiredat57 wrote:
Wed Sep 11, 2019 5:38 pm
it'd be very hard for me to passively watch a 10%-25% drop of my stock portfolio. Therefore, I really need to limit my at risk dollars at the cost of lower returns over the long run.
Yes.

If it would bother you that much to watch only a 10% drop in your stock portfolio, that basically says you should not have a stock portfolio at all. A 10% drop is inevitable. Corrections like that happen on average every year or two.

Sounds like you'll sleep better being permanently out of the market. Hopefully, doing that still allows you to achieve your financial goals.

I wish you luck and good sleep.

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bottlecap
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Re: Too Late To Get Back Into Stocks?

Post by bottlecap » Wed Sep 11, 2019 7:29 pm

My first piece of advice is find an AA that you are comfortable with and stick with it, no matter what you read and no matter what emotional/political thoughts you may have. They are often closely related and are not correlated to movements in the market.

My second piece of advice is invest in a retirement fund so you don't have to do the rebalancing. Any time your emotions or biases started to rattle you, look at the total value of the fund. Think about whether all those other conservative investors are wrong, too.

It's harder to say than do, but it's the only thing that works. Until you do it, you will learn your lesson over and over again, whether you regret it or not.

Good luck,

JT

Starfish
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Re: Too Late To Get Back Into Stocks?

Post by Starfish » Wed Sep 11, 2019 7:37 pm

OP, you seem a pretty active trader for somebody "risk adverse".
I have nothing against active trading but it's purpose should be to increase return and risk.
Retiredat57 wrote:
Wed Sep 11, 2019 5:47 pm
I don't regret it because I acted on the information I had at the time, not 20/20 hindsight.
For some reason you are using the word "information" instead of "belief".
Last edited by Starfish on Wed Sep 11, 2019 7:48 pm, edited 1 time in total.

JPM
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Re: Too Late To Get Back Into Stocks?

Post by JPM » Wed Sep 11, 2019 7:44 pm

Interest rates are low and at this time forecast to go lower in the immediate future.

The federal government is running a highly stimulative trillion dollar deficit this year and there doesn't seem to be any appetite for reducing it next year. Arguable whether this is wise, but for risk assets it's a plus.

The tax cut has not been repealed. Also arguable whether wise, but...

Deregulation continues except in California.

US trade with China is down the past 2 years, trade with the rest of the world is up by more than trade with China is down.

Employment statistics continue to improve. It's getting harder and costlier to hire and keep good people in our shop but business is good.

Why are so many people looking up at the high stock and bond markets and seeing the sky falling? The overall picture looks very good to me and the administration will try hard not to screw it up before the election next year.

bradinsky
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Re: Too Late To Get Back Into Stocks?

Post by bradinsky » Wed Sep 11, 2019 7:48 pm

Why are so many people looking up at the high stock and bond markets and seeing the sky falling? The overall picture looks very good to me and the administration will try hard not to screw it up before the election next year.
+1

bikechuck
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Re: Too Late To Get Back Into Stocks?

Post by bikechuck » Wed Sep 11, 2019 7:53 pm

JoeRetire wrote:
Wed Sep 11, 2019 7:12 pm
bikechuck wrote:
Wed Sep 11, 2019 5:06 pm
I share your concerns but I am just derisking a bit and moving from 50% equities to 40%. In part because of the points you raised but also in part because I am recently retired and people I respect like Rick Ferri suggest that 35% equities are a good place to be for the mythical average retiree investor. After dialing back to 40% I might implement a rising glide path as suggested by Wafe Pfau and others.
So why aren't you dialing back to 35% ?
Just curious.
Rick Ferri also says "there is no such thing as the average investor". I have some guaranteed funds in my portfolio currently paying 4.5% and 4.0%. Based on that 35% feels too conservative for me. I think that accepting a bit more risk at 40% gives me a better chance for keeping up with inflation and perhaps leaving a bit more behind for my daughter's and granddaughters.

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