Anyone here mostly cash in portfolio?

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Escapevelocity
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Re: Anyone here mostly cash in portfolio?

Post by Escapevelocity »

ohboy! wrote: Tue Nov 17, 2020 1:17 pm
hudson wrote: Tue Nov 17, 2020 6:46 am
kareysue wrote: Tue Nov 17, 2020 4:40 am Since the March lows I've made a mistake of selling almost all of my equities. With everything up now, I realized I made a big mistake. Anyone in a similar situation and what did you end up doing?
I bailed out of stocks in 2008 and moved to fixed income.
I'm comfortable with where I am. I learned that I did not want to own any stocks ever.
I guess this is like hanging out at a bar and not drinking then.
Right, why are you on this board if you don't plan to ever invest?
hudson
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Re: Anyone here mostly cash in portfolio?

Post by hudson »

Escapevelocity wrote: Wed Nov 18, 2020 3:55 pm
ohboy! wrote: Tue Nov 17, 2020 1:17 pm
hudson wrote: Tue Nov 17, 2020 6:46 am
kareysue wrote: Tue Nov 17, 2020 4:40 am Since the March lows I've made a mistake of selling almost all of my equities. With everything up now, I realized I made a big mistake. Anyone in a similar situation and what did you end up doing?
I bailed out of stocks in 2008 and moved to fixed income.
I'm comfortable with where I am. I learned that I did not want to own any stocks ever.
I guess this is like hanging out at a bar and not drinking then.
Right, why are you on this board if you don't plan to ever invest?
I don't own any stocks, but I invest in fixed income. Is Bogleheads just about investing in stocks?
Escapevelocity
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Re: Anyone here mostly cash in portfolio?

Post by Escapevelocity »

hudson wrote: Wed Nov 18, 2020 4:21 pm
Escapevelocity wrote: Wed Nov 18, 2020 3:55 pm
ohboy! wrote: Tue Nov 17, 2020 1:17 pm
hudson wrote: Tue Nov 17, 2020 6:46 am
kareysue wrote: Tue Nov 17, 2020 4:40 am Since the March lows I've made a mistake of selling almost all of my equities. With everything up now, I realized I made a big mistake. Anyone in a similar situation and what did you end up doing?
I bailed out of stocks in 2008 and moved to fixed income.
I'm comfortable with where I am. I learned that I did not want to own any stocks ever.
I guess this is like hanging out at a bar and not drinking then.
Right, why are you on this board if you don't plan to ever invest?
I don't own any stocks, but I invest in fixed income. Is Bogleheads just about investing in stocks?
I was waiting for that reply. Fair point.
Explorer
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Re: Anyone here mostly cash in portfolio?

Post by Explorer »

hudson wrote: Wed Nov 18, 2020 4:21 pm
Escapevelocity wrote: Wed Nov 18, 2020 3:55 pm
ohboy! wrote: Tue Nov 17, 2020 1:17 pm
hudson wrote: Tue Nov 17, 2020 6:46 am
kareysue wrote: Tue Nov 17, 2020 4:40 am Since the March lows I've made a mistake of selling almost all of my equities. With everything up now, I realized I made a big mistake. Anyone in a similar situation and what did you end up doing?
I bailed out of stocks in 2008 and moved to fixed income.
I'm comfortable with where I am. I learned that I did not want to own any stocks ever.
I guess this is like hanging out at a bar and not drinking then.
Right, why are you on this board if you don't plan to ever invest?
I don't own any stocks, but I invest in fixed income. Is Bogleheads just about investing in stocks?
hudson - this board is for all whether you invest in anything or not. Would you mind elaborating on what kind of fixed income instruments you invest in?

Thanks in advance.
hudson
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Re: Anyone here mostly cash in portfolio?

Post by hudson »

Explorer, I hold the following...
CDs...mostly
Vanguard Intermediate Muni Fund
Vanguard Total Bond ETF
Vanguard GNMA
MUB
Explorer
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Re: Anyone here mostly cash in portfolio?

Post by Explorer »

hudson wrote: Wed Nov 18, 2020 7:34 pm Explorer, I hold the following...
CDs
Vanguard Intermediate Muni Fund
Vanguard Total Bond ETF
Vanguard GNMA
MUB
Thanks for a prompt response. You probably considered actively managed bond funds too? Like PIMIX (marquee fund from PIMCO with use of derivatives to control duration risk as well as go-anywhere bond approach) or DLTNX ( a bit less risky than PIMIX but still good).
hudson
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Re: Anyone here mostly cash in portfolio?

Post by hudson »

Explorer wrote: Wed Nov 18, 2020 7:38 pm
hudson wrote: Wed Nov 18, 2020 7:34 pm Explorer, I hold the following...
CDs
Vanguard Intermediate Muni Fund
Vanguard Total Bond ETF
Vanguard GNMA
MUB
Thanks for a prompt response. You probably considered actively managed bond funds too? Like PIMIX (marquee fund from PIMCO with use of derivatives to control duration risk as well as go-anywhere bond approach) or DLTNX ( a bit less risky than PIMIX but still good).
I've looked at PIMCO investments when they come up on the forum. Expenses and risks are too high for me. I prefer treasuries/CDs or very low expense mostly AAA/AA/A rated muni funds.
Last edited by hudson on Wed Nov 18, 2020 8:03 pm, edited 1 time in total.
Trader Joe
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Re: Anyone here mostly cash in portfolio?

Post by Trader Joe »

kareysue wrote: Tue Nov 17, 2020 4:40 am Since the March lows I've made a mistake of selling almost all of my equities. With everything up now, I realized I made a big mistake. Anyone in a similar situation and what did you end up doing?
No, it never even occurred to me.
Silverado
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Re: Anyone here mostly cash in portfolio?

Post by Silverado »

Robot Monster wrote: Tue Nov 17, 2020 10:36 am My inclination was to sell my equities! The idea didn't seem so nutty at the time, with articles like "Why I Cashed Out of the Covid-19 Rally" published May 12th by Bloomberg. At a certain point I did sin by selling some stock...it was a painful biting of the tongue experience to buy back in after it had significantly rallied. I had to set aside my emotions, and do the logical thing; it was as simple, and difficult, as that.
I find these posts, and they always show up, so weird. My inclination was to do nothing except the same, invest every two weeks. Been doing that since 1994, and will continue for six more years. Heavy on the equities, may dial that down a tad, but may not.

Curious, how could selling during a pullback / drop / whatever not seem nutty? Unless you needed money to not die, I can see no reason a move down in value would trigger a sell emotion.
Firemenot
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Re: Anyone here mostly cash in portfolio?

Post by Firemenot »

Sorry to hear that. The psychology of going to all cash and having the market go up a lot is brutal.
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pennsylvania211
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Re: Anyone here mostly cash in portfolio?

Post by pennsylvania211 »

Sorry to hear that OP

If markets going down in unexpected ways bothers you (making you a speculator rather than investor) then your asset allocation is not correct. The sooner you can get on board with the way things are, rather than the way you want things to be, the easier the ride will be
"In the long run, investing is not about markets at all. Investing is about enjoying the returns earned by businesses." - Jack Bogle
rascott
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Re: Anyone here mostly cash in portfolio?

Post by rascott »

Silverado wrote: Wed Nov 18, 2020 7:50 pm
Robot Monster wrote: Tue Nov 17, 2020 10:36 am My inclination was to sell my equities! The idea didn't seem so nutty at the time, with articles like "Why I Cashed Out of the Covid-19 Rally" published May 12th by Bloomberg. At a certain point I did sin by selling some stock...it was a painful biting of the tongue experience to buy back in after it had significantly rallied. I had to set aside my emotions, and do the logical thing; it was as simple, and difficult, as that.
I find these posts, and they always show up, so weird. My inclination was to do nothing except the same, invest every two weeks. Been doing that since 1994, and will continue for six more years. Heavy on the equities, may dial that down a tad, but may not.

Curious, how could selling during a pullback / drop / whatever not seem nutty? Unless you needed money to not die, I can see no reason a move down in value would trigger a sell emotion.

I'm with you. Stocks seem to be the only thing in the world that people don't want to buy when they are on sale.

Pretty much defies logic. But people seem to look at their investment accounts kind of like a volatile bank account, rather than ownership of hundreds/ thousands of businesses.

My only regret for 2020 was that I didn't have more cash available to buy during the short window of time we had for sale prices. Of course, I've been a 95-100% equity investor for 20+ years and have yet to sell a single share of anything, outside of shifting to some different funds over time.
balbrec2
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Re: Anyone here mostly cash in portfolio?

Post by balbrec2 »

1210sda wrote: Tue Nov 17, 2020 10:38 am
KlangFool wrote: Tue Nov 17, 2020 9:49 am OP,


You should choose a target retirement fund and/or a Vanguard Life Strategy fund.


KlangFool
I second this !!!
This wont prevent a very nervous investor from going to 100% money market at the wrong time.
It does provide money management at a low cost while their money is in that fund.
Robot Monster
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Re: Anyone here mostly cash in portfolio?

Post by Robot Monster »

Silverado wrote: Wed Nov 18, 2020 7:50 pm
Robot Monster wrote: Tue Nov 17, 2020 10:36 am My inclination was to sell my equities! The idea didn't seem so nutty at the time, with articles like "Why I Cashed Out of the Covid-19 Rally" published May 12th by Bloomberg. At a certain point I did sin by selling some stock...it was a painful biting of the tongue experience to buy back in after it had significantly rallied. I had to set aside my emotions, and do the logical thing; it was as simple, and difficult, as that.
I find these posts, and they always show up, so weird. My inclination was to do nothing except the same, invest every two weeks. Been doing that since 1994, and will continue for six more years. Heavy on the equities, may dial that down a tad, but may not.

Curious, how could selling during a pullback / drop / whatever not seem nutty? Unless you needed money to not die, I can see no reason a move down in value would trigger a sell emotion.
Depends how one defines nutty, I suppose. A lot of people around here might consider listening to Jim Cramer nutty, or timing the market nutty, or not observing basic Boglehead principals nutty. Others would disagree. Seems like a potential rabbit hole. Let's avoid it.
tibbitts
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Re: Anyone here mostly cash in portfolio?

Post by tibbitts »

Explorer wrote: Wed Nov 18, 2020 7:38 pm
hudson wrote: Wed Nov 18, 2020 7:34 pm Explorer, I hold the following...
CDs
Vanguard Intermediate Muni Fund
Vanguard Total Bond ETF
Vanguard GNMA
MUB
Thanks for a prompt response. You probably considered actively managed bond funds too? Like PIMIX (marquee fund from PIMCO with use of derivatives to control duration risk as well as go-anywhere bond approach) or DLTNX ( a bit less risky than PIMIX but still good).
The increasing problem with active bond funds is that as interest rates drop to the 1-3% range (depending on credit quality and duration), it's increasingly difficult for a manager to overcome even say a modest expense ratio. That's a lot easier to do when bonds are yielding 10% or even 5%.
tibbitts
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Re: Anyone here mostly cash in portfolio?

Post by tibbitts »

Silverado wrote: Wed Nov 18, 2020 7:50 pm Curious, how could selling during a pullback / drop / whatever not seem nutty? Unless you needed money to not die, I can see no reason a move down in value would trigger a sell emotion.
Although I didn't sell anything significant during the downturn, you're predicating your theory on a belief that the situation won't get worse and will eventually recover. Not everybody believes that's inevitable. Remember that it's somewhat likely that you've also lost your job and might not have any prospects for getting another one in the foreseeable future, so suddenly losing even more of your market investments would have a huge effect on your financial future. That's not needing money to "not die", but it's needing money to survive day-to-day indefinitely.
antiqueman
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Re: Anyone here mostly cash in portfolio?

Post by antiqueman »

I bailed out of stocks in 2008 and moved to fixed income.
I'm comfortable with where I am. I learned that I did not want to own any stocks ever.


So how do you structure your assets? Are they mostly TIPS?
T Bills? Annuities?

I ask because I have a small allocation to stocks.
Explorer
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Re: Anyone here mostly cash in portfolio?

Post by Explorer »

tibbitts wrote: Thu Nov 19, 2020 10:00 am
Explorer wrote: Wed Nov 18, 2020 7:38 pm
hudson wrote: Wed Nov 18, 2020 7:34 pm Explorer, I hold the following...
CDs
Vanguard Intermediate Muni Fund
Vanguard Total Bond ETF
Vanguard GNMA
MUB
Thanks for a prompt response. You probably considered actively managed bond funds too? Like PIMIX (marquee fund from PIMCO with use of derivatives to control duration risk as well as go-anywhere bond approach) or DLTNX ( a bit less risky than PIMIX but still good).
The increasing problem with active bond funds is that as interest rates drop to the 1-3% range (depending on credit quality and duration), it's increasingly difficult for a manager to overcome even say a modest expense ratio. That's a lot easier to do when bonds are yielding 10% or even 5%.
Don't we all wish for bonds yielding 10%? NOT... coz that means inflation is through the roof.

For someone whose holdings are only fixed income (like hudson) I think active bond managers bring value to the table as compared to simple indexes. ER is not the be all and end all. Particularly PIMCO which historically has been able to find segments in the huuuuuuge bond market and deliver better returns than bond indexes. Of course, these funds have their own risks but nothing like equity risk.
hudson
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Re: Anyone here mostly cash in portfolio?

Post by hudson »

antiqueman wrote: Thu Nov 19, 2020 10:09 am I bailed out of stocks in 2008 and moved to fixed income.
I'm comfortable with where I am. I learned that I did not want to own any stocks ever.


So how do you structure your assets? Are they mostly TIPS?
T Bills? Annuities?


I ask because I have a small allocation to stocks.
antiqueman,
I'm roughly
CDs...85%
Vanguard Intermediate Muni Fund 8%
Vanguard Total Bond ETF...1%
Vanguard GNMA...5%
MUB...1%

Annuities: In a few years I might consider an MYGA (Multi-Year Guaranteed Annuity) up to the limits of my state's guarantee association
Treasuries....yes if they become a better deal than CDs
TIPS.....I'm 73. At 76, I'm considering using individual TIPS or TIPS funds or a combination in a liability matching portfolio.
....maybe like this? ....viewtopic.php?p=5379410#p5379410

That will be 1st quarter 2024. If I don't go with TIPS, I'll look for the best deal on fixed income to match my duration(s).
WillRetire
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Re: Anyone here mostly cash in portfolio?

Post by WillRetire »

OP: Don't try to time the market. Pick an asset allocation you can live with during ups & downs, and stick to it, rebalancing on occasion.

#MarketTimingBad
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ruralavalon
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Re: Anyone here mostly cash in portfolio?

Post by ruralavalon »

balbrec2 wrote: Thu Nov 19, 2020 9:46 am
1210sda wrote: Tue Nov 17, 2020 10:38 am
KlangFool wrote: Tue Nov 17, 2020 9:49 am OP,


You should choose a target retirement fund and/or a Vanguard Life Strategy fund.


KlangFool
I second this !!!
This wont prevent a very nervous investor from going to 100% money market at the wrong time.
It does provide money management at a low cost while their money is in that fund.
It has been true that investors in balanced funds like target date or LifeStrategy funds tend not to sell off during stock market drops.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started
balbrec2
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Re: Anyone here mostly cash in portfolio?

Post by balbrec2 »

ruralavalon wrote: Thu Nov 19, 2020 1:35 pm
balbrec2 wrote: Thu Nov 19, 2020 9:46 am
1210sda wrote: Tue Nov 17, 2020 10:38 am
KlangFool wrote: Tue Nov 17, 2020 9:49 am OP,


You should choose a target retirement fund and/or a Vanguard Life Strategy fund.


KlangFool
I second this !!!
This wont prevent a very nervous investor from going to 100% money market at the wrong time.
It does provide money management at a low cost while their money is in that fund.
It has been true that investors in balanced funds like target date or LifeStrategy funds tend not to sell off during stock market drops.
I guess it would depend on the level of nervousness. This should translate to an
appropriate AA.
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ruralavalon
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Re: Anyone here mostly cash in portfolio?

Post by ruralavalon »

balbrec2 wrote: Thu Nov 19, 2020 1:53 pm
ruralavalon wrote: Thu Nov 19, 2020 1:35 pm
balbrec2 wrote: Thu Nov 19, 2020 9:46 am
1210sda wrote: Tue Nov 17, 2020 10:38 am
KlangFool wrote: Tue Nov 17, 2020 9:49 am OP,


You should choose a target retirement fund and/or a Vanguard Life Strategy fund.


KlangFool
I second this !!!
This wont prevent a very nervous investor from going to 100% money market at the wrong time.
It does provide money management at a low cost while their money is in that fund.
It has been true that investors in balanced funds like target date or LifeStrategy funds tend not to sell off during stock market drops.
I guess it would depend on the level of nervousness. This should translate to an
appropriate AA.
Vanguard wrote: . . . when looking just at the trading of Vanguard Target Retirement Fund investors—although, as in 2019, that activity remained sharply lower than that of the overall participant population.
. . . . .
Vanguard Target Retirement Fund investors are five times less likely to trade, even amid acute economic and market stress. This bodes well for participant outcomes because in times of volatility, the automatic rebalancing of Target Retirement Funds spares investors the emotionally challenging task of rebalancing on their own.
Vanguard (10/30/2020), "COVID-19, the CARES Act, and plan participants' response", link.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started
Keenobserver
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Re: Anyone here mostly cash in portfolio?

Post by Keenobserver »

I was lucky enough to be mostly cash in March and have been DCAing my way since then.
deltaneutral83
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Re: Anyone here mostly cash in portfolio?

Post by deltaneutral83 »

Using index funds and being DIY but then engaging in one failed attempt at market timing (reasons notwithstanding) where you sell and watch the market run up 20% before you get back in is exponentially worse than having "a guy" charging 1% in actively managed funds for 30-40 years who gets you to back off the ledge. Not to mention sleeping better. The index funds, low ERs, DIY, and all that is what the BH dive into but staying the course is by far the biggest piece of the puzzle. That gets lost around here for those of us who have lived through a bear market and are numb to media sensationalism.
SimplicityNow
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Re: Anyone here mostly cash in portfolio?

Post by SimplicityNow »

We can always live in constant fear not knowing what tomorrow might bring. Hindsight is always 20/20.

I realize this so although I felt the fear back in March, I didn't change my asset allocation.

As many have said you need to pick an allocation of stocks to fixed income assets and leave it alone.

I think with your whipsaw reactions to market turmoil that a target date fund would be ideal.

Invest as much as you are able and leave it alone. Or as Jack use to say tongue in cheek, Don't Peek.

If that doesn't seem enough then perhaps something like Vanguard Personal Advisory Service would benefit you in the long term.

For the cost of 0.3% of your assets every year they will pick an asset allocation for you that will be "good enough"

The money you spend on this would be far less than the losses from your market timing.

Best of luck.
Marseille07
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Re: Anyone here mostly cash in portfolio?

Post by Marseille07 »

Keenobserver wrote: Sat Nov 21, 2020 7:35 am I was lucky enough to be mostly cash in March and have been DCAing my way since then.
Similar situation, I've had lots of cash in HYSA when they offered 2% APY; now at 0.5%, I've been DCAing the cash into taxable doing 80/20 AA.
Keenobserver
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Re: Anyone here mostly cash in portfolio?

Post by Keenobserver »

Marseille07 wrote: Sat Nov 21, 2020 11:30 am
Keenobserver wrote: Sat Nov 21, 2020 7:35 am I was lucky enough to be mostly cash in March and have been DCAing my way since then.
Similar situation, I've had lots of cash in HYSA when they offered 2% APY; now at 0.5%, I've been DCAing the cash into taxable doing 80/20 AA.
Oh how I wish was I had gone all in in March, dont you? Hindsight.
Marseille07
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Re: Anyone here mostly cash in portfolio?

Post by Marseille07 »

Keenobserver wrote: Sat Nov 21, 2020 8:13 pm
Marseille07 wrote: Sat Nov 21, 2020 11:30 am
Keenobserver wrote: Sat Nov 21, 2020 7:35 am I was lucky enough to be mostly cash in March and have been DCAing my way since then.
Similar situation, I've had lots of cash in HYSA when they offered 2% APY; now at 0.5%, I've been DCAing the cash into taxable doing 80/20 AA.
Oh how I wish was I had gone all in in March, dont you? Hindsight.
I started DCAing much later; my active trading did well in March though, shorting the market at the right time.
steadygrowth4ever
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Re: Anyone here mostly cash in portfolio?

Post by steadygrowth4ever »

nz_flyfishr wrote: Tue Nov 17, 2020 7:16 pm Long time lurker- first post because I can totally relate to this post about going to cash. :oops:

I am a recent "early" retiree (41M) with about 8M in total assets. I have been investing since the ripe age of 16. After seeing the grim jobs report, lowered economic forecast and widespread lockdowns in late March '20, I sold about a third of my portfolio after the market rebounded. At the time the world only had 48k Covid19 cases, but it seemed like containment was unlikely. Based on that the world GDP, consumer spending, jobs, energy, etc would all go down and credit risk would go up. All of those trends came to pass, but I suppose government stimulus, 0% interest and cheap capital won out in the market tug-of-war. Today, my money is just sitting around losing value with the US dollar while I look at the market and wonder whether/where I can/should increase my investment risk tolerance and buy back in at elevated prices-- or simply wait it out until I see opportunities that make sense to me.

As I look back, it was my capital allocation more so than my actual decision to sell that was the principle issue. I realized a big chunk of the money in what I sold might be tapped in the next 5-10-15 years. After a decade of putting that money in the market while I had income from work, I neglected to reallocate it once I decided to retire because I hadn't thought about my risk tolerance while I was seeing years of gains.

These days, I just console myself by looking at random charts and numbers when I get seller's regret:
https://www.multpl.com/s-p-500-pe-ratio/table/by-month
https://www.imf.org/en/Publications/WEO ... tober-2020
http://www.yardeni.com/pub/spearnrevalgrpeg.pdf
https://www.worldometers.info/coronavirus/

For the most part they tell the same story about the economy, the virus spread, and the relative price of the stock market vs earnings. I still am uncertain about the market and it feels like many stock prices are inflating without earnings growth (LT or SR). In the long-run (30-40+ years), it probably won't matter, but in the short term I can't help but feel like we're in an abnormally risky period.

So my two cents in summary (advice for me as well):

1) If you're holding for another 20-30 years, I wouldn't even worry about missing out this year...just buy in anytime and it'll look fantastic.

2) If you're looking at something shorter for some portion of those funds, I would really assess your capital allocation vs risk tolerance before committing the funds as it may be that you aren't properly allocated and it's causing you more stress to sell when the prices go down in the interim.

3) Write down your Investment Policy Statement and capital allocations. It'll keep you on track.

4) When you are down about how a trade went remember that: health, happiness, friends, family > money. Letting the equation flip is a recipe for some of the greatest regrets in life.
What did you do after all? Did you buy in more? I am in similar shoes to you. One side, I think the value is too high, but I dont want to miss the uprun as well. One thing I am different from you is that I don't have 41M, yet, lol, but I still have about 10-15 years. I am just curious about what you choose later on and would like to hear any recommendations if possible.
flaccidsteele
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Re: Anyone here mostly cash in portfolio?

Post by flaccidsteele »

gr7070 wrote: Wed Nov 18, 2020 10:26 am
oken wrote: Wed Nov 18, 2020 12:09 am
1) You can't be right all the time.
Unless one chooses to buy and hold at all times.
+1 this

The US market always recovers. Always. It’s never different this time

1. Always buy
2. Buy more during bears
3. Rinse and repeat
4. Enjoy being always right
The US market always recovers. It’s never different this time. Retired in my 40s. Investing is a simple game of rinse and repeat
anoop
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Re: Anyone here mostly cash in portfolio?

Post by anoop »

I am close to 100% cash and have been that way since early 2008. I occasionally trade stocks. I was 100% cash, but then I bought a tiny bit of gold amounting to just under 1% of my portfolio.
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CyclingDuo
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Re: Anyone here mostly cash in portfolio?

Post by CyclingDuo »

kareysue wrote: Tue Nov 17, 2020 4:40 am Since the March lows I've made a mistake of selling almost all of my equities. With everything up now, I realized I made a big mistake. Anyone in a similar situation and what did you end up doing?
Sorry to hear that. Decisions based on emotion typically are portfolio destruction events that are never recovered. You can make some mistakes and time will recover some of it, but you won't recover what "could have been". Nevertheless, you must move on regardless of your past performance.

We only get - on average - about 3, 4 or 5 expansion cycles as investors throughout our entire investing lifetimes. Riding through the contractions is part of the process that we must accept to capture the subsequent expansions.

Image

This thread - viewtopic.php?f=10&t=305476 - originally titled "Disappointed in forum members" was illustrative as we ended February and headed into the month of March with so many in panic mode and fear of the market decline, and the pandemic was leading to heightened emotions that created a wash out event. The thread is worth reading again in retrospect what some were saying. In that thread, I illustrated what a typical decline was going to mean to portfolios using Larry Swedroe's chart from the 1973-74 bear market, and added dollar amounts so one could brace for the impact and ride it out. If you know going into a black swan event what the likely portfolio declines could potentially be (I illustrated a 50% drop), it helps mitigate making improper decisions if you can look beyond it and what the subsequent expansion period will provide in rewards for the investor.

Our household has been invested through three of the expansions and contractions below as we entered this year's contraction. I would expect in our investing lifetimes, another expansion or two and of course the subsequent contractions that accompany the end of an expansion.

Image

Accept the astute advice from Ritholtz Wealth Management's Anthony Isola, a financial adviser at the firm who tweets under the handle @ATeachMoment.

Image
https://www.marketwatch.com/story/panic ... 2018-02-08

The media, the market, the investing forums, etc... love to provide fear, emotion, and what we could simply call "scare tactics". As difficult as it is to ignore all of that, one must learn to have a balanced view and ignore as much as you can of all the fear mongering, scare tactics and short term thinking.

Successful investors have been through all of that and reached a point where they can live with it, have an appropriate asset allocation for their level of dealing with the emotion, and find the forest through the trees. It's been a great year for enjoying wine. :D

:sharebeer

CyclingDuo
"Save like a pessimist, invest like an optimist." - Morgan Housel
JW-Retired
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Re: Anyone here mostly cash in portfolio?

Post by JW-Retired »

kareysue wrote: Tue Nov 17, 2020 4:40 am Since the March lows I've made a mistake of selling almost all of my equities. With everything up now, I realized I made a big mistake. Anyone in a similar situation and what did you end up doing?
Yes, some time in the Clinton presidency I sold a lot of equities because I thought they were due for crashing. Luckily it was not "all of my equities" because instead they went up and up. They only went way down some years later. I did learn that it was silly to think I could guess the market direction.

Since then, I have only made changes in my portfolio if it gets well above my 60% equities target. If it goes lower than my target I just let it be. It worked great!

In the last 20 something years I have only increased equities via new money. Since I'm now retired I hardly ever need to do anything. :beer
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DesertDiva
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Re: Anyone here mostly cash in portfolio?

Post by DesertDiva »

Trader Joe wrote: Wed Nov 18, 2020 7:50 pm
kareysue wrote: Tue Nov 17, 2020 4:40 am Since the March lows I've made a mistake of selling almost all of my equities. With everything up now, I realized I made a big mistake. Anyone in a similar situation and what did you end up doing?
No, it never even occurred to me.
+1. Same here! I've continued to follow my IPS.
anoop
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Re: Anyone here mostly cash in portfolio?

Post by anoop »

hudson wrote: Tue Nov 17, 2020 6:46 am
kareysue wrote: Tue Nov 17, 2020 4:40 am Since the March lows I've made a mistake of selling almost all of my equities. With everything up now, I realized I made a big mistake. Anyone in a similar situation and what did you end up doing?
I bailed out of stocks in 2008 and moved to fixed income.
I'm comfortable with where I am. I learned that I did not want to own any stocks ever.
I found my investing twin, haha.
checkyourmath
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Re: Anyone here mostly cash in portfolio?

Post by checkyourmath »

I am all cash. Selling on the slide has got to be horrible. I feel your FOMO. Risk is hard to really understand when we are bombarded by information and with a lot of aspects of normalcy thrown out the window. If you are closer to retirement you have my sympathy but if you are young time is still on your side. I sold bonds in 2017 I took a $3000 dollar lose which really worked out great. I also sold some stocks in 2010 which also worked out great. I sold everything in 2019 and I can't tell you how I feel about that. It is kind of up in the air. 2020 is like the Y2K we never had.

I think the GFC caused a lot of problems that never got solved and a ton of people were severely affected. We are currently looking at a generational shift in capital with this recession. If it is a bull or bear market right now I really don't care. I am not risking one dollar until I understand what the future holds.
JBTX
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Re: Anyone here mostly cash in portfolio?

Post by JBTX »

BabaWawa wrote: Tue Nov 17, 2020 7:57 am
kareysue wrote: Tue Nov 17, 2020 4:40 am Since the March lows I've made a mistake of selling almost all of my equities. With everything up now, I realized I made a big mistake. Anyone in a similar situation and what did you end up doing?
Kareysue,

I took the liberty of searching your previous posts here. What I see is someone who is undisciplined without an investment plan and seems to over react to market volatility and hype. Your first post was in the middle of the 2008 downturn where you asked about going to 100% cash. Then not another post for 7 years. That should have been a great learning experience, but it appears the lesson was lost again. I also noticed you asked about shorting the market this year on March 23, at the very bottom of this current downturn. You are still in cash and have missed a tremendous run up in equity value. You should now realize that your instincts can't be trusted.

You are young, but you can't afford to keep duplicating these mistakes. Please learn from this experience. Spend more time here learning how to write an Investment Policy Statement and develop an asset allocation you can stay the course with (its not 100% equities). Learn how to rebalance when the market gives you the opportunity to sell assets at a high price and buy when they are low (not the other way around as you have done previously). Your previous posts also seem to show a propensity towards individual stocks. For you I truly believe the 3 fund portfolio would benefit you and give you a solid foundation upon which to build.

I apologize if this seems harsh, but offer this only in your best interest.
Well said.

I view these decisions as an emotional based self destructive behavior. As somebody who has seen repeated self destructive behaviors, they will be repeated until "offender" has come to understand the reason for the behavior, deep down buy into the fact that it is self destructive, emotionally come to grips with it, and develop a mental and emotional thought process that can withstand the self destructive tendencies.

Once you have done that (which isn't easy), tactics to assist

- come up with a written plan
- try to educate and indoctrinate yourself where you emotional believe what you have learned.
- there is lots of evidence that you can't time the market or beat the market. But you have to believe it. There are thousands of posts in here articulating that with evidence, but when things go south people's emotions take over and deep down they don't believe it.
- condition yourself when things go down a lot, to buy just a little. You feel like you have to do something. Do that. And assuming the market eventually recovers, your behavior will be reinforced.
- figure out a reasonable risk tolerance and asset allocation and stick with it. Don't go too aggressive
- invest in target date and life strategy funds
- to the extent investments are in retirement accounts they seem more segregated and less accessible and are less likely to be tampered with.
- automate things as much as possible. Take decision making out of it. Target dates. Automatic funding and investing
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dogagility
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Re: Anyone here mostly cash in portfolio?

Post by dogagility »

CyclingDuo wrote: Sun Nov 22, 2020 9:53 am
kareysue wrote: Tue Nov 17, 2020 4:40 am Since the March lows I've made a mistake of selling almost all of my equities. With everything up now, I realized I made a big mistake. Anyone in a similar situation and what did you end up doing?
Sorry to hear that. Decisions based on emotion typically are portfolio destruction events that are never recovered. You can make some mistakes and time will recover some of it, but you won't recover what "could have been". Nevertheless, you must move on regardless of your past performance.

We only get - on average - about 3, 4 or 5 expansion cycles as investors throughout our entire investing lifetimes. Riding through the contractions is part of the process that we must accept to capture the subsequent expansions.

Image

This thread - viewtopic.php?f=10&t=305476 - originally titled "Disappointed in forum members" was illustrative as we ended February and headed into the month of March with so many in panic mode and fear of the market decline, and the pandemic was leading to heightened emotions that created a wash out event. The thread is worth reading again in retrospect what some were saying. In that thread, I illustrated what a typical decline was going to mean to portfolios using Larry Swedroe's chart from the 1973-74 bear market, and added dollar amounts so one could brace for the impact and ride it out. If you know going into a black swan event what the likely portfolio declines could potentially be (I illustrated a 50% drop), it helps mitigate making improper decisions if you can look beyond it and what the subsequent expansion period will provide in rewards for the investor.

Our household has been invested through three of the expansions and contractions below as we entered this year's contraction. I would expect in our investing lifetimes, another expansion or two and of course the subsequent contractions that accompany the end of an expansion.

Image

Accept the astute advice from Ritholtz Wealth Management's Anthony Isola, a financial adviser at the firm who tweets under the handle @ATeachMoment.

Image
https://www.marketwatch.com/story/panic ... 2018-02-08

The media, the market, the investing forums, etc... love to provide fear, emotion, and what we could simply call "scare tactics". As difficult as it is to ignore all of that, one must learn to have a balanced view and ignore as much as you can of all the fear mongering, scare tactics and short term thinking.

Successful investors have been through all of that and reached a point where they can live with it, have an appropriate asset allocation for their level of dealing with the emotion, and find the forest through the trees. It's been a great year for enjoying wine. :D

:sharebeer

CyclingDuo
Post of the year! :sharebeer
All children spill milk. Learn to smile and wipe it up. -- A Farmer's Wife
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dogagility
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Re: Anyone here mostly cash in portfolio?

Post by dogagility »

checkyourmath wrote: Sun Nov 22, 2020 2:16 pm I am all cash. Selling on the slide has got to be horrible. I feel your FOMO. Risk is hard to really understand when we are bombarded by information and with a lot of aspects of normalcy thrown out the window.
I suggest you think about how the "information" peddlers are not looking out for your best interest. They want to see money in their pockets and will use the best attention-grabber (fear) to get that money.
checkyourmath wrote: Sun Nov 22, 2020 2:16 pm I am not risking one dollar until I understand what the future holds.
What is your investing time horizon... more than a five years?

Do you believe humans are still innovative?

If the answer is yes to both of these questions, then you should be invested now in the stock market.
All children spill milk. Learn to smile and wipe it up. -- A Farmer's Wife
7eight9
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Re: Anyone here mostly cash in portfolio?

Post by 7eight9 »

dogagility wrote: Sun Nov 22, 2020 2:43 pm
checkyourmath wrote: Sun Nov 22, 2020 2:16 pm I am all cash. Selling on the slide has got to be horrible. I feel your FOMO. Risk is hard to really understand when we are bombarded by information and with a lot of aspects of normalcy thrown out the window.
I suggest you think about how the "information" peddlers are not looking out for your best interest. They want to see money in their pockets and will use the best attention-grabber (fear) to get that money.
checkyourmath wrote: Sun Nov 22, 2020 2:16 pm I am not risking one dollar until I understand what the future holds.
What is your investing time horizon... more than a five years?

Do you believe humans are still innovative?


If the answer is yes to both of these questions, then you should be invested now in the stock market.
I suspect many investors in the Nikkei circa December 1989 would have answered both questions in the affirmative.

How did that work out for them?
I guess it all could be much worse. | They could be warming up my hearse.
Ocean77
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Re: Anyone here mostly cash in portfolio?

Post by Ocean77 »

checkyourmath wrote: Sun Nov 22, 2020 2:16 pm I am all cash. Selling on the slide has got to be horrible. I feel your FOMO. Risk is hard to really understand when we are bombarded by information and with a lot of aspects of normalcy thrown out the window. If you are closer to retirement you have my sympathy but if you are young time is still on your side. I sold bonds in 2017 I took a $3000 dollar lose which really worked out great. I also sold some stocks in 2010 which also worked out great. I sold everything in 2019 and I can't tell you how I feel about that. It is kind of up in the air. 2020 is like the Y2K we never had.

I think the GFC caused a lot of problems that never got solved and a ton of people were severely affected. We are currently looking at a generational shift in capital with this recession. If it is a bull or bear market right now I really don't care. I am not risking one dollar until I understand what the future holds.
Well, being all cash is going to be quite risky in its own right. The dollars you have, I'm sure you worked hard for it. But they are being diluted by the trillions of dollars that the government is printing out of thin air. That will make the dollars we already have less valuable over time. In the long run, owning real assets like factories and real estate is going to be less risky than owning cash, since the government can't print those out of thin air.
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dogagility
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Re: Anyone here mostly cash in portfolio?

Post by dogagility »

7eight9 wrote: Sun Nov 22, 2020 2:49 pm
dogagility wrote: Sun Nov 22, 2020 2:43 pm
checkyourmath wrote: Sun Nov 22, 2020 2:16 pm I am all cash. Selling on the slide has got to be horrible. I feel your FOMO. Risk is hard to really understand when we are bombarded by information and with a lot of aspects of normalcy thrown out the window.
I suggest you think about how the "information" peddlers are not looking out for your best interest. They want to see money in their pockets and will use the best attention-grabber (fear) to get that money.
checkyourmath wrote: Sun Nov 22, 2020 2:16 pm I am not risking one dollar until I understand what the future holds.
What is your investing time horizon... more than a five years?

Do you believe humans are still innovative?


If the answer is yes to both of these questions, then you should be invested now in the stock market.
I suspect many investors in the Nikkei circa December 1989 would have answered both questions in the affirmative.

How did that work out for them?
Ah, yes... the Japan, Czarist Russia, Roman Empire trope. Go ahead and invest in a single economy and live in fear. Take your money out of the market on a whim.
All children spill milk. Learn to smile and wipe it up. -- A Farmer's Wife
bi0hazard
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Re: Anyone here mostly cash in portfolio?

Post by bi0hazard »

checkyourmath wrote: Sun Nov 22, 2020 2:16 pm I am not risking one dollar until I understand what the future holds.
Please let us know when you find out
Marseille07
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Re: Anyone here mostly cash in portfolio?

Post by Marseille07 »

dogagility wrote: Sun Nov 22, 2020 2:55 pm
7eight9 wrote: Sun Nov 22, 2020 2:49 pm
dogagility wrote: Sun Nov 22, 2020 2:43 pm
checkyourmath wrote: Sun Nov 22, 2020 2:16 pm I am all cash. Selling on the slide has got to be horrible. I feel your FOMO. Risk is hard to really understand when we are bombarded by information and with a lot of aspects of normalcy thrown out the window.
I suggest you think about how the "information" peddlers are not looking out for your best interest. They want to see money in their pockets and will use the best attention-grabber (fear) to get that money.
checkyourmath wrote: Sun Nov 22, 2020 2:16 pm I am not risking one dollar until I understand what the future holds.
What is your investing time horizon... more than a five years?

Do you believe humans are still innovative?


If the answer is yes to both of these questions, then you should be invested now in the stock market.
I suspect many investors in the Nikkei circa December 1989 would have answered both questions in the affirmative.

How did that work out for them?
Ah, yes... the Japan, Czarist Russia, Roman Empire trope. Go ahead and invest in a single economy and live in fear. Take your money out of the market on a whim.
I'm not in an all-cash camp, but to be fair the S&P500 faced the same fate between 1929-1954. The US markets aren't immune to lengthy drawdowns.
Dottie57
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Re: Anyone here mostly cash in portfolio?

Post by Dottie57 »

I have a lot in fixed income/cash. Mostly because I want to pay cash for a new home, and I have 6.5 years until SS. At 70 I hope to be 50/50 stocks to bonds.
anoop
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Re: Anyone here mostly cash in portfolio?

Post by anoop »

bi0hazard wrote: Sun Nov 22, 2020 3:00 pm
checkyourmath wrote: Sun Nov 22, 2020 2:16 pm I am not risking one dollar until I understand what the future holds.
Please let us know when you find out
Some people know. Like Buffett. Which is why he sold out of airlines and banks.
anoop
Posts: 1846
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Re: Anyone here mostly cash in portfolio?

Post by anoop »

Marseille07 wrote: Sun Nov 22, 2020 3:03 pm
dogagility wrote: Sun Nov 22, 2020 2:55 pm
7eight9 wrote: Sun Nov 22, 2020 2:49 pm
dogagility wrote: Sun Nov 22, 2020 2:43 pm
checkyourmath wrote: Sun Nov 22, 2020 2:16 pm I am all cash. Selling on the slide has got to be horrible. I feel your FOMO. Risk is hard to really understand when we are bombarded by information and with a lot of aspects of normalcy thrown out the window.
I suggest you think about how the "information" peddlers are not looking out for your best interest. They want to see money in their pockets and will use the best attention-grabber (fear) to get that money.
checkyourmath wrote: Sun Nov 22, 2020 2:16 pm I am not risking one dollar until I understand what the future holds.
What is your investing time horizon... more than a five years?

Do you believe humans are still innovative?


If the answer is yes to both of these questions, then you should be invested now in the stock market.
I suspect many investors in the Nikkei circa December 1989 would have answered both questions in the affirmative.

How did that work out for them?
Ah, yes... the Japan, Czarist Russia, Roman Empire trope. Go ahead and invest in a single economy and live in fear. Take your money out of the market on a whim.
I'm not in an all-cash camp, but to be fair the S&P500 faced the same fate between 1929-1954. The US markets aren't immune to lengthy drawdowns.
At this point in time, I'd say pension funds are going to be in really, really bad shape if there is a long drawdown. Safe to say, unless the entire financial system collapses and the fed ends, this is not going to happen.
lws
Posts: 181
Joined: Tue Apr 25, 2017 6:12 pm

Re: Anyone here mostly cash in portfolio?

Post by lws »

I panicked and sold.
Why did I do that?
I thought I knew my risk tolerance but I did not.
What shall I do now?
Choose another allocation and try again.
Marseille07
Posts: 316
Joined: Fri Nov 06, 2020 1:41 pm

Re: Anyone here mostly cash in portfolio?

Post by Marseille07 »

lws wrote: Sun Nov 22, 2020 5:31 pm I panicked and sold.
Why did I do that?
I thought I knew my risk tolerance but I did not.
What shall I do now?
Choose another allocation and try again.
Sure, be sure to add more bonds to it until you're comfortable holding through another crash.
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