Preparing for a down market

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minimalistmarc
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Re: Preparing for a down market

Post by minimalistmarc » Sun Nov 17, 2019 6:35 am

sambb wrote:
Sun Nov 17, 2019 6:05 am
Fear is interesting. If market drops 60% we would have severe problems in the USA (war, pestilence, depression, etc). So one's 60/40 portfolio would be down 30%, but that would be the least of the problems.
Not necessarily. There would probably be an increase in poverty but none of the other things are guaranteed

Lee_WSP
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Re: Preparing for a down market

Post by Lee_WSP » Sun Nov 17, 2019 10:33 am

minimalistmarc wrote:
Sun Nov 17, 2019 6:35 am
sambb wrote:
Sun Nov 17, 2019 6:05 am
Fear is interesting. If market drops 60% we would have severe problems in the USA (war, pestilence, depression, etc). So one's 60/40 portfolio would be down 30%, but that would be the least of the problems.
Not necessarily. There would probably be an increase in poverty but none of the other things are guaranteed
It dropped 51% during the GFC.

The Nikeei bottomed out near an 80% drawdown.

vasu100
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Re: Preparing for a down market

Post by vasu100 » Sun Nov 17, 2019 10:42 am

I have a question for the people using Bond funds for "emergency needs". I have always kept Bonds in my tax-deferred accounts and Stock ETF (mostly SCHB) in my taxable, because I thought this was the right way for "tax efficiency". So cannot use Bonds as "emergency fund" (unless I want to withdraw from IRA/401K). Do you keep Bonds in taxable (is it recommended to keep "some amount of Bonds in taxable" ??

MathIsMyWayr
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Re: Preparing for a down market

Post by MathIsMyWayr » Sun Nov 17, 2019 10:52 am

vasu100 wrote:
Sun Nov 17, 2019 10:42 am
I have a question for the people using Bond funds for "emergency needs". I have always kept Bonds in my tax-deferred accounts and Stock ETF (mostly SCHB) in my taxable, because I thought this was the right way for "tax efficiency". So cannot use Bonds as "emergency fund" (unless I want to withdraw from IRA/401K). Do you keep Bonds in taxable (is it recommended to keep "some amount of Bonds in taxable" ??
Let's assume you need $20k. You buy $20k of stock funds by selling bond funds in IRA/401k. Now, turn around and sell $20k of similar stock funds in taxable for your emergency needs.

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willthrill81
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Re: Preparing for a down market

Post by willthrill81 » Sun Nov 17, 2019 10:54 am

minimalistmarc wrote:
Sun Nov 17, 2019 6:26 am
Random Walker wrote:
Sat Nov 16, 2019 3:13 pm
RetireBy55 wrote:
Sat Nov 16, 2019 2:08 pm
OP - there are plenty of times throughout the history of the market where it took FAR longer than 25 (or even 49) months to recover.

You might want to consider this rather sobering chart if you haven't seen it previously:

Image

Note that the longest recovery period from peak to trough was TWENTY-NINE YEARS.

Of course, if that happens again, we're all in a heap of trouble. But I manage my portfolio expecting that we'll probably see another period like the late 60s to early 80s sometime in my lifetime.
Boy that is an eye opener!

Dave
I know, it would be amazing to have had the opportunity to accumulate over that 20 year period.
As noted above, that chart is very wrong.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

flyingaway
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Re: Preparing for a down market

Post by flyingaway » Sun Nov 17, 2019 10:55 am

ER2023 wrote:
Fri Nov 15, 2019 7:48 pm
I’m reading how a bear market reduces your portfolio by at least 20%, on average by 33%, and the worst (in recent history during 2007-2009) by 57%. If it takes 25 months to recover from a typical bear market, and 49 months to recover from the 2007-2009 bear, my questions are:
  • Do you keep enough cash in your portfolio specifically to cover your withdraws during a down market?
      If so, do you use the numbers above - for example, should a portfolio have enough cash to cover your expenses for at least 25 months, and ideally 49 months - so you don’t touch your retirement accounts until it recovers?
        If you do plan to use cash when the market drops, how do you plan for it? For example, do you have a specific number in mind, say 20%, that if the market drops by that much you then use your cash for expenses?
          If this is the plan, how do you structure your cash - for example is this a good use of CD laddering?
            Lastly, is the cash allocated for this separate from your emergency fund?
          Is there a difference, say, between 40% in bond and putting 10 years of expenses in bond to wait for the market to recover?

          flyingaway
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          Re: Preparing for a down market

          Post by flyingaway » Sun Nov 17, 2019 10:59 am

          livesoft wrote:
          Fri Nov 15, 2019 7:53 pm
          No cash, but my portfolio has bond funds, so not 100% equities. If the market drops, I sell bond fund shares and buy equity fund shares to maintain my desired asset allocation which is about 60% equities and 40% bonds. Bond funds should not drop by more than few percent, so if 60% of my portfolio drops by 50%, then my total portfolio would drop only about 30% which is really no big deal.

          Also don't forget that equity funds drop about 10% or so every single year.

          Once again no cash since I want to be prepared for an up market which happens more often than a down market.
          Come on, I don't believe you don't have any cash. If you are travelling overseas and want to withdraw cash from their local ATMs, you cannot withdraw that from your bond funds.

          (Just kidding).

          livesoft
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          Re: Preparing for a down market

          Post by livesoft » Sun Nov 17, 2019 11:00 am

          MathIsMyWayr wrote:
          Sun Nov 17, 2019 10:52 am
          Let's assume you need $20k. You buy $20k of stock funds by selling bond funds in IRA/401k. Now, turn around and sell $20k of similar stock funds in taxable for your emergency needs.
          I did something very similar a few days ago:

          Sold 50 shares of VEU (foreign stocks) in taxable to get about $2600 in cash to pay bills.

          Sold some shares of SPAB (US bonds) in my 401(k) which together with some monthly bond fund dividends paid on November 6 and 7 and bought about $2500 of SPDW (foreign stocks).

          I didn't have to care whether VEU or SPDW were up, down, or sideways, but I must admit that down would be better for me to reduce the capital gains which will be offset by previous capital losses that have been carried over from past tax-loss harvesting.
          Wiki This signature message sponsored by sscritic: Learn to fish.

          livesoft
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          Re: Preparing for a down market

          Post by livesoft » Sun Nov 17, 2019 11:01 am

          flyingaway wrote:
          Sun Nov 17, 2019 10:59 am
          Come on, I don't believe you don't have any cash. If you are travelling overseas and want to withdraw cash from their local ATMs, you cannot withdraw that from your bond funds.

          (Just kidding).
          I'm famous enough and also recognizable enough that I charge people to take photos with me when I am overseas. Cash only.
          Wiki This signature message sponsored by sscritic: Learn to fish.

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          willthrill81
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          Re: Preparing for a down market

          Post by willthrill81 » Sun Nov 17, 2019 11:03 am

          flyingaway wrote:
          Sun Nov 17, 2019 10:55 am
          ER2023 wrote:
          Fri Nov 15, 2019 7:48 pm
          I’m reading how a bear market reduces your portfolio by at least 20%, on average by 33%, and the worst (in recent history during 2007-2009) by 57%. If it takes 25 months to recover from a typical bear market, and 49 months to recover from the 2007-2009 bear, my questions are:
          • Do you keep enough cash in your portfolio specifically to cover your withdraws during a down market?
              If so, do you use the numbers above - for example, should a portfolio have enough cash to cover your expenses for at least 25 months, and ideally 49 months - so you don’t touch your retirement accounts until it recovers?
                If you do plan to use cash when the market drops, how do you plan for it? For example, do you have a specific number in mind, say 20%, that if the market drops by that much you then use your cash for expenses?
                  If this is the plan, how do you structure your cash - for example is this a good use of CD laddering?
                    Lastly, is the cash allocated for this separate from your emergency fund?
                  Is there a difference, say, between 40% in bond and putting 10 years of expenses in bond to wait for the market to recover?
                  If you intend to spend only the bonds when stocks are down, then yes. When most people talk about years of expenses in bonds, this is what they intend to do. A dynamic asset allocation in accumulation or decumulation is a form of market timing.
                  “It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

                  flyingaway
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                  Re: Preparing for a down market

                  Post by flyingaway » Sun Nov 17, 2019 11:08 am

                  willthrill81 wrote:
                  Sun Nov 17, 2019 11:03 am
                  flyingaway wrote:
                  Sun Nov 17, 2019 10:55 am
                  ER2023 wrote:
                  Fri Nov 15, 2019 7:48 pm
                  I’m reading how a bear market reduces your portfolio by at least 20%, on average by 33%, and the worst (in recent history during 2007-2009) by 57%. If it takes 25 months to recover from a typical bear market, and 49 months to recover from the 2007-2009 bear, my questions are:
                  • Do you keep enough cash in your portfolio specifically to cover your withdraws during a down market?
                      If so, do you use the numbers above - for example, should a portfolio have enough cash to cover your expenses for at least 25 months, and ideally 49 months - so you don’t touch your retirement accounts until it recovers?
                        If you do plan to use cash when the market drops, how do you plan for it? For example, do you have a specific number in mind, say 20%, that if the market drops by that much you then use your cash for expenses?
                          If this is the plan, how do you structure your cash - for example is this a good use of CD laddering?
                            Lastly, is the cash allocated for this separate from your emergency fund?
                          Is there a difference, say, between 40% in bond and putting 10 years of expenses in bond to wait for the market to recover?
                          If you intend to spend only the bonds when stocks are down, then yes. When most people talk about years of expenses in bonds, this is what they intend to do. A dynamic asset allocation in accumulation or decumulation is a form of market timing.
                          Do people refill the 10 years of expenses in bond bucket or do they maintain the 60/40 AA by rebalancing? One cannot have both ways?

                          MathIsMyWayr
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                          Re: Preparing for a down market

                          Post by MathIsMyWayr » Sun Nov 17, 2019 11:09 am

                          livesoft wrote:
                          Sun Nov 17, 2019 11:00 am
                          MathIsMyWayr wrote:
                          Sun Nov 17, 2019 10:52 am
                          Let's assume you need $20k. You buy $20k of stock funds by selling bond funds in IRA/401k. Now, turn around and sell $20k of similar stock funds in taxable for your emergency needs.
                          I did something very similar a few days ago:

                          Sold 50 shares of VEU (foreign stocks) in taxable to get about $2600 in cash to pay bills.

                          Sold some shares of SPAB (US bonds) in my 401(k) which together with some monthly bond fund dividends paid on November 6 and 7 and bought about $2500 of SPDW (foreign stocks).

                          I didn't have to care whether VEU or SPDW were up, down, or sideways, but I must admit that down would be better for me to reduce the capital gains which will be offset by previous capital losses that have been carried over from past tax-loss harvesting.
                          livesoft,

                          I have to admit that I learned it from you. :wink:

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                          willthrill81
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                          Re: Preparing for a down market

                          Post by willthrill81 » Sun Nov 17, 2019 11:11 am

                          flyingaway wrote:
                          Sun Nov 17, 2019 11:08 am
                          willthrill81 wrote:
                          Sun Nov 17, 2019 11:03 am
                          flyingaway wrote:
                          Sun Nov 17, 2019 10:55 am
                          ER2023 wrote:
                          Fri Nov 15, 2019 7:48 pm
                          I’m reading how a bear market reduces your portfolio by at least 20%, on average by 33%, and the worst (in recent history during 2007-2009) by 57%. If it takes 25 months to recover from a typical bear market, and 49 months to recover from the 2007-2009 bear, my questions are:
                          • Do you keep enough cash in your portfolio specifically to cover your withdraws during a down market?
                              If so, do you use the numbers above - for example, should a portfolio have enough cash to cover your expenses for at least 25 months, and ideally 49 months - so you don’t touch your retirement accounts until it recovers?
                                If you do plan to use cash when the market drops, how do you plan for it? For example, do you have a specific number in mind, say 20%, that if the market drops by that much you then use your cash for expenses?
                                  If this is the plan, how do you structure your cash - for example is this a good use of CD laddering?
                                    Lastly, is the cash allocated for this separate from your emergency fund?
                                  Is there a difference, say, between 40% in bond and putting 10 years of expenses in bond to wait for the market to recover?
                                  If you intend to spend only the bonds when stocks are down, then yes. When most people talk about years of expenses in bonds, this is what they intend to do. A dynamic asset allocation in accumulation or decumulation is a form of market timing.
                                  Do people refill the 10 years of expenses in bond bucket or do they maintain the 60/40 AA by rebalancing? One cannot have both ways?
                                  If you maintain the same relative stock/bond allocation, then it doesn't matter whether you refer to it by percentages or years of expenses. But again, I haven't seen any investors who used the 'years of expenses' approach who wasn't planning on doing some type of dynamic asset allocation if stocks tanked (e.g. no rebalancing). Perhaps you are the first.
                                  “It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

                                  flyingaway
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                                  Re: Preparing for a down market

                                  Post by flyingaway » Sun Nov 17, 2019 11:15 am

                                  A related question.

                                  What does it mean "market is recovered"? Does it mean the market returns to the previous all-time high before the crash?

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                                  willthrill81
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                                  Re: Preparing for a down market

                                  Post by willthrill81 » Sun Nov 17, 2019 11:24 am

                                  flyingaway wrote:
                                  Sun Nov 17, 2019 11:15 am
                                  A related question.

                                  What does it mean "market is recovered"? Does it mean the market returns to the previous all-time high before the crash?
                                  That's a good question and part of the problem. Such definitions are not easy and are seldom incorporated into a retiree's withdrawal policy statement, which probably exceptionally few retirees even have at all.
                                  “It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

                                  Lee_WSP
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                                  Re: Preparing for a down market

                                  Post by Lee_WSP » Sun Nov 17, 2019 11:43 am

                                  vasu100 wrote:
                                  Sun Nov 17, 2019 10:42 am
                                  I have a question for the people using Bond funds for "emergency needs". I have always kept Bonds in my tax-deferred accounts and Stock ETF (mostly SCHB) in my taxable, because I thought this was the right way for "tax efficiency". So cannot use Bonds as "emergency fund" (unless I want to withdraw from IRA/401K). Do you keep Bonds in taxable (is it recommended to keep "some amount of Bonds in taxable" ??
                                  I do. The tax drag is small and the ability to rebalance, sell and keep everything tallied within one brokerage account makes up for the drag.

                                  If the drag were tens of thousands of dollars in dividends per year, I might feel differently. But right now we're talking about maybe a couple hundred of taxable income.

                                  If I were in the top tax bracket, I'd opt for munis which then have near minimal tax drag.

                                  flyingaway
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                                  Re: Preparing for a down market

                                  Post by flyingaway » Sun Nov 17, 2019 11:43 am

                                  willthrill81 wrote:
                                  Sun Nov 17, 2019 11:11 am
                                  flyingaway wrote:
                                  Sun Nov 17, 2019 11:08 am
                                  willthrill81 wrote:
                                  Sun Nov 17, 2019 11:03 am
                                  flyingaway wrote:
                                  Sun Nov 17, 2019 10:55 am
                                  Is there a difference, say, between 40% in bond and putting 10 years of expenses in bond to wait for the market to recover?
                                  If you intend to spend only the bonds when stocks are down, then yes. When most people talk about years of expenses in bonds, this is what they intend to do. A dynamic asset allocation in accumulation or decumulation is a form of market timing.
                                  Do people refill the 10 years of expenses in bond bucket or do they maintain the 60/40 AA by rebalancing? One cannot have both ways?
                                  If you maintain the same relative stock/bond allocation, then it doesn't matter whether you refer to it by percentages or years of expenses. But again, I haven't seen any investors who used the 'years of expenses' approach who wasn't planning on doing some type of dynamic asset allocation if stocks tanked (e.g. no rebalancing). Perhaps you are the first.
                                  If a retiree has a portfolio with 60/40 AA for 30 years, that is about 12 years of fixed income for a down market, more than the 10 years of expenses in bonds/cash specifically allocated for that purpose.

                                  esteen
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                                  Re: Preparing for a down market

                                  Post by esteen » Sun Nov 17, 2019 2:01 pm

                                  willthrill81 wrote:
                                  Sat Nov 16, 2019 3:20 pm
                                  RetireBy55 wrote:
                                  Sat Nov 16, 2019 2:08 pm
                                  OP - there are plenty of times throughout the history of the market where it took FAR longer than 25 (or even 49) months to recover.

                                  You might want to consider this rather sobering chart if you haven't seen it previously:

                                  Image

                                  Note that the longest recovery period from peak to trough was TWENTY-NINE YEARS.

                                  Of course, if that happens again, we're all in a heap of trouble. But I manage my portfolio expecting that we'll probably see another period like the late 60s to early 80s sometime in my lifetime.
                                  I'm pretty sure that that chart is wrong. The data from DQYDJ, which include returns of U.S. stocks going back to 1871, indicate that the worst 21 year period had a real return of +0.365%. I'll almost certainly bet that the makers of that graph ignored dividends, which is often a strategy used by those trying to make stocks look worse than they've actually been (e.g. those selling insurance products).

                                  EDIT: That graph is definitely wrong. It shows that it took 16 years for stocks to recover from the drawdown falling the drop in the year 2000, but the market fully recovered in real dollars by 2013.
                                  I'm glad you mentioned this, I have seen that chart drift around the internet a few times and it is a skewed picture of real losses.

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                                  JoeRetire
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                                  Re: Preparing for a down market

                                  Post by JoeRetire » Sun Nov 17, 2019 2:42 pm

                                  prioritarian wrote:
                                  Sat Nov 16, 2019 4:32 pm
                                  heyyou wrote:
                                  Sat Nov 16, 2019 4:17 pm
                                  The bull market has helped me to delay SS to age 70, and SS won't be cut for another 10-15 years.
                                  Given the significant percentage of people in the "boomer" cohort that lack adequate savings, I believe the most likely scenario is that SS benefits will increase in coming decades.
                                  That would be fun. But I don't see it happening.
                                  Don't be a lemming.

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                                  JoeRetire
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                                  Re: Preparing for a down market

                                  Post by JoeRetire » Sun Nov 17, 2019 2:48 pm

                                  sambb wrote:
                                  Sun Nov 17, 2019 6:05 am
                                  If market drops 60% we would have severe problems in the USA (war, pestilence, depression, etc).
                                  Market drops cause pestilence?

                                  Do we know which disease?

                                  Lupus? Is it lupus?
                                  Don't be a lemming.

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                                  whodidntante
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                                  Re: Preparing for a down market

                                  Post by whodidntante » Sun Nov 17, 2019 2:56 pm

                                  MathIsMyWayr wrote:
                                  Sun Nov 17, 2019 11:09 am
                                  livesoft,

                                  I have to admit that I learned it from you. :wink:
                                  You could pay for a picture with him. :happy

                                  MathIsMyWayr
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                                  Re: Preparing for a down market

                                  Post by MathIsMyWayr » Sun Nov 17, 2019 3:02 pm

                                  whodidntante wrote:
                                  Sun Nov 17, 2019 2:56 pm
                                  MathIsMyWayr wrote:
                                  Sun Nov 17, 2019 11:09 am
                                  livesoft,

                                  I have to admit that I learned it from you. :wink:
                                  You could pay for a picture with him. :happy
                                  How much a good teacher shines depends on how his pupils practice their learning. :happy

                                  prioritarian
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                                  Re: Preparing for a down market

                                  Post by prioritarian » Sun Nov 17, 2019 3:25 pm

                                  Lee_WSP wrote:
                                  Sun Nov 17, 2019 10:33 am
                                  The Nikeei bottomed out near an 80% drawdown.
                                  And what happened to bonds?

                                  A three decade (and counting) bull market with GINORMOUS returns.

                                  Image

                                  Just imagine what buying and holding *that* would look like.

                                  mikeyzito22
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                                  Re: Preparing for a down market

                                  Post by mikeyzito22 » Sun Nov 17, 2019 3:34 pm

                                  livesoft wrote:
                                  Sun Nov 17, 2019 11:01 am
                                  flyingaway wrote:
                                  Sun Nov 17, 2019 10:59 am
                                  Come on, I don't believe you don't have any cash. If you are travelling overseas and want to withdraw cash from their local ATMs, you cannot withdraw that from your bond funds.

                                  (Just kidding).
                                  I'm famous enough and also recognizable enough that I charge people to take photos with me when I am overseas. Cash only.
                                  Self-aggrandizement is not a form of humility or intellect.

                                  livesoft
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                                  Re: Preparing for a down market

                                  Post by livesoft » Sun Nov 17, 2019 3:36 pm

                                  mikeyzito22 wrote:
                                  Sun Nov 17, 2019 3:34 pm
                                  Self-aggrandizement is not a form of humility or intellect.
                                  I totally agree with that statement.
                                  Wiki This signature message sponsored by sscritic: Learn to fish.

                                  mikeyzito22
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                                  Re: Preparing for a down market

                                  Post by mikeyzito22 » Sun Nov 17, 2019 3:38 pm

                                  livesoft wrote:
                                  Sun Nov 17, 2019 3:36 pm
                                  mikeyzito22 wrote:
                                  Sun Nov 17, 2019 3:34 pm
                                  Self-aggrandizement is not a form of humility or intellect.
                                  I totally agree with that statement.
                                  Well that is money. You rock.

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                                  willthrill81
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                                  Re: Preparing for a down market

                                  Post by willthrill81 » Sun Nov 17, 2019 4:19 pm

                                  flyingaway wrote:
                                  Sun Nov 17, 2019 11:43 am
                                  willthrill81 wrote:
                                  Sun Nov 17, 2019 11:11 am
                                  flyingaway wrote:
                                  Sun Nov 17, 2019 11:08 am
                                  willthrill81 wrote:
                                  Sun Nov 17, 2019 11:03 am
                                  flyingaway wrote:
                                  Sun Nov 17, 2019 10:55 am
                                  Is there a difference, say, between 40% in bond and putting 10 years of expenses in bond to wait for the market to recover?
                                  If you intend to spend only the bonds when stocks are down, then yes. When most people talk about years of expenses in bonds, this is what they intend to do. A dynamic asset allocation in accumulation or decumulation is a form of market timing.
                                  Do people refill the 10 years of expenses in bond bucket or do they maintain the 60/40 AA by rebalancing? One cannot have both ways?
                                  If you maintain the same relative stock/bond allocation, then it doesn't matter whether you refer to it by percentages or years of expenses. But again, I haven't seen any investors who used the 'years of expenses' approach who wasn't planning on doing some type of dynamic asset allocation if stocks tanked (e.g. no rebalancing). Perhaps you are the first.
                                  If a retiree has a portfolio with 60/40 AA for 30 years, that is about 12 years of fixed income for a down market, more than the 10 years of expenses in bonds/cash specifically allocated for that purpose.
                                  Yes, and that doesn't change anything that I said. I'm not advocating that 10 years of expenses in bonds is too much or too little for a retiree. I'm stating that unless the retiree is trying to time the market with a dynamic asset allocation that there is no meaningful difference in defining one's bond allocation in terms of a percentage of one's total portfolio or years of spending.
                                  “It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

                                  anoop
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                                  Re: Preparing for a down market

                                  Post by anoop » Sun Nov 17, 2019 4:34 pm

                                  The federal reserve won't allow the market to crash by that much. They'll start buying equities outright well before that happens. Japan has already done it, the ECB is considering it, and it's been talked about as something the federal reserve might do.

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                                  Johnnie
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                                  Re: Preparing for a down market

                                  Post by Johnnie » Sun Nov 17, 2019 5:42 pm

                                  I'm slightly puzzled by the extent many here distinguish between 'cash' and bonds in the current environment. The devil's in the details, but there doesn't seem to be much difference in bond returns long or short, except long comes with a lot more risk if inflation returns.

                                  The plan for this part of my portfolio is still a work in progress, unlike stocks (mostly). I have Vanguard Short-Term Treasury, VFIRX, duration 2.38 years current yield 1.82 (IRA). I'm open to attractive 2 or 3 year CDs with minimal hoops to jump.

                                  I also have an online savings account at a "dodgy internet bank" (it's not really) that has trended down from about 1.8 to 1.7 yield the past 18 month (taxable). That would be my emergency fund except I don't think of it that way.

                                  Vanguard Long-Term Investment-Grade VWESX yields 3.18 with effective duration of 14.2 years.

                                  Vanguard Intermediate-Term Bond Index VBIIX yields 2.07 with an effective duration of 6.32 years.

                                  That doesn't seem much reward for betting against inflation by going that long. I have no idea which way rates will go, but do know that if it's higher you can get hurt by a 14 year maturity.

                                  OTOH, how bad would it be if rates went negative? That 14 year bond would be looking real good, but if this became the new normal it still wouldn't save you from zero percent mattress cash in the (less than Keynesian) long term.
                                  "I know nothing."

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