How to re-enter market in 2023

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traveling_salesman
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Re: How to re-enter market in 2023

Post by traveling_salesman »

mruizesparza wrote: Mon Jan 23, 2023 12:20 am Thank you to everyone for taking the time to share your advice, information, and thoughts...and truth. I needed to hear it.

I am looking into supplementing income for a couple of years. I have enjoyed the extra time being at home with my wife and volunteering. Its been great.
Personally, I think you shouldn’t be too hard on yourself. Mistakes happen, especially when the stakes are so high. That said, perhaps you could think of this as a opportunity to learn not about the market but about your personal reactions to its movement.

FWIW, I do not think you should re-enter the market. No amount of financial advice can help when your gut is screaming to get the hell out of the market (and in fairness to you, there are times when there is real uncertainty… though sept 2022 doesn’t seem to really count).

In any case, for your age and the current interest environment, you might consider an immediate annuity. USAA is paying out 7+% at the moment. There’s the benefit that you don’t need to pay attention to the market, and that you don’t have to curtail spending in the fear of the next downturn.
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Taylor Larimore
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Re: How to re-enter market in 2023

Post by Taylor Larimore »

arcticpineapplecorp. wrote: Sat Jan 21, 2023 9:17 pm
mruizesparza wrote: Sat Jan 21, 2023 8:23 pm On 9/27/22, I panicked and sold most of our holdings. We were in 60/40 equity to bond allocation. I regret it now. I missed the Q4 run in the market. I am withdrawing cash from brokerage account for living expenses. Our goal is to be fully invested at a 50/50 allocation to equities and bonds by year end. As the bonds, mature I plan on moving them into iShares 1-3 Year Treasury Bond ETF.
My main concern is earnings risk that is not priced into the market and I do not want to buy at high.

Questions:
1. Should begin dollar cost averaging in April as Q1 earnings season report out or wait till June?
2. Do the following allocations and investments make sense for my wife and my IRA? Here are the allocations and investments:
- 50% iShares 1-3 Year Treasury Bond ETF, SHY, 0.15%
- 43.5% Vanguard Value Trust, VTV, 0.06%
- 2% iShares S & P small cap, IJR, 0.06%
- 2% iShares S & P mid cap, IJH, .05%
- 2% iShares Core MSCI Emerging Mkts, IEMG, 0.09%
.5% Vanguard Materials, VAW, 0.10%
3. Does the standard Boglehead 3 fund portfolio (42/18 /40 approach; US/International/Bonds) still work and is it a better option?
4. Is my retirement plan compromised?

I greatly appreciate any feedback and insights from this community on anything regarding the plan.
these numbers below do not correspond with your numbered questions above.

1. how did you settle on 50/50 instead of 60/40? Do you think you won't panic again with 50/50 like you did with 60/40? If so, why do you think that exactly?

If you look at the following post you see that the difference in performance in 2022 between 60/40 and 50/50 would have been just 1% less worst drawdown. So instead of losing 21.02% (with 60/40) last year, you would have "only" lost 20.02% (with 50/50). Would you seriously have had a different reaction?

look at that info on that post above where i listed the worst drawdowns during the Great Recession. 60/40 lost 30.66% whereas 50/50 "only" lost 25.10%. If you panic sold last year with 60/40 when the market fell 21.02% would you not have had the same (or worse) reaction in March 2009?

2. holding such small percentages in funds is not likely to make much difference either way, so most would say why bother? It's complicating the portfolio for no real benefit.

3. The standard boglehead portfolio will always work in the sense that you're guaranteed to never underperfom the indexes (except by the expense ratio). That doesn't mean you'll always like the returns you get from those indexes, but you don't get to choose what the markets (stock and/or bond) give you. You take what you get. It also means that you'll get the returns commensurate with the risk you take. 60/40 will earn one return over the next x number of years. And 50/50 probably will earn slightly less because it's less risk. Generally if you take less risk, you get lower returns. That's the tradeoff.

You're asking at the end (in reference to the "boglehead portfolio) if the 60/40 still works. Compared to what?
What were you expecting it to do?
Are you expecting the 50/50 to outperform the 60/40 or do something the 60/40 won't?

4. no your retirement plan is not compromised. You just need to get back on course and STAY THE COURSE. Getting in and out of the market is why most people never get the return of the market (because you can't get the return if you're not in it to receive it. Or in it to win it as Randy Jackson says).

the chart below (and highlighted link) shows two things: 1. if you miss some of the best days, you could lose out on a lot of money and 2. some of the best days occurred soon after some of the worst days so stay in the market or you'll miss out. Here's another good article that explains that it's Better to face the correction because "More money has been lost in anticipation of corrections than in the corrections themselves"--Peter Lynch

You also have hopefully learned that a portfolio is like a wet bar of soap; the more you handle it, the smaller it gets.

Image

5. Not sure what is meant by "earnings risk is not priced in". The market is smarter than you. In aggregate all information is priced in, so you need not worry. That doesn't mean something bad won't happen in the market. But if it does, it's because of new information that will come out in the future, not what we already know today. That's priced in already.

6. regarding buying at an all time high the market was higher than it is now back in Nov 2021. So you're not buying at a high, the market hasn't gotten back to its previous high. So you're buying today at a discount.

Also, in 2021 the market reached 70 All TIME HIGHS. Do you know how many posts there were on bogleheads that year from people saying exactly the same thing: "I can't buy now. The market's at an ALL TIME HIGH!!" Guess they missed out on making money every time the market went on to create, yet, another ALL TIME HIGH.

Even if the market was at an all time high right now (it's not), do you really think the market won't ever create another all time high in the future? If you believe there will never ever ever be a new all time high then why would you invest in the first place?

7. I think you should review a couple things:
a. An Investment Policy Statement
b. make sure your allocation matches your need, ability and willingess to take risk:
How much risk do you need to take: https://www.cbsnews.com/news/asset-allo ... -you-need/
How much risk do you have the ability to take: https://www.cbsnews.com/news/asset-allo ... -you-take/
How much risk do you have the willingness to take: https://www.cbsnews.com/news/asset-allo ... tolerance/
How to deal with conflicts between the need, ability and willingness to take risk: https://www.cbsnews.com/news/asset-allo ... ing-goals/

what do you think?
arcticpineapplecorp:

I think your post is excellent. Bogleheads at its best.

Thank you and best wishes.
Taylor
Jack Bogle's Words of Wisdom: “Success in short can be measured, not in what we attain for ourselves, but in what we contribute to society.”
"Simplicity is the master key to financial success." -- Jack Bogle
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jose
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Re: How to re-enter market in 2023

Post by jose »

This is what I would do:
  • Re-evaluate spending. How are you spending 70k a year? Everyone is assuming that you own your home and don't pay rent, but I don't remember if you mentioned that. If this is not the case you need to go back to work now.
  • Your retirement savings are suffcient for shoestring retirement for 2 people. Assuming you own the home, I would try to stay retired and live on about $3,000 a month, half your current spend rate, which is not sustainable, even with future SS payments, which we don't know. That additional SS income might be needed for your additional healthcare and services that come with old age, and for inflation protection.
  • I would go to a 50% stocks and start following boglehead advice instead of getting a financial advisor. Not all financial advisors follow your interests, and some make the same mistakes you made, or similar. I'd rather go bankrupt for my own mistakes than for the mistakes of an advisor that charged me a % annually.
  • By re-entering the market you are going to realize a loss. That is painful. It might be less painful/scary to do a quick DCA instead of lump-sum. I would consider a disciplined 6-month DCA. The market could go up or down. In any case, thik "I will most likely see S&P500 way past 6,000". It will make it easier knowing that you are likely buying very cheap now.
  • Instead of bonds, consider a CD ladder. Rates are good enough and you have no risk. Lots of argument on this, but I don't see the advantage of bonds especially at your age.
  • You recognize you made mistakes, and I believe you are able to follow boglehead advice. Nothing is easier. Just do nothing. Like each time you think of messing with your investments, just go out and get a nice dinner with your wife. How hard is that? You can do it.
  • I would include an allocation clause in my IPS. In my case, the allocation change procedure says to write a proposal with rationale and expected benefits, spend 3 months to re-evaluate and edit, and then approve it. After another 3-month reflection period, you can do what your last version of the written proposal says.
Good luck to you my friend, relax and enjoy your simple living retirement!
Last edited by jose on Mon Jan 23, 2023 9:33 am, edited 1 time in total.
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Wiggums
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Re: How to re-enter market in 2023

Post by Wiggums »

I’ve been investing in the S&P 500 then the three fund portfolio once I learned of it since I was 22. I don’t watch investment shows because nobody has a crystal ball. I have an asset allocation that I can live with in good and bad times. I don’t check the portfolio balance often. I believe that fee’s matter.

You missed the October lows followed by a big run up. We are close to the end of rate hikes so the market bottom is probably in, however, volatility is here to stay. As a fellow retiree, you have to be invested. My mom is age 93 and she has Wellesley.

I would go with a simple portfolio and dump all the individual stocks. I’ve said on this forum before that an all in one fund is better than paying a 1% AUM fee. However, if paying a fee will help you stay invested, you want to pay the lowest fee to the broker who will give you a three fund like portfolio.

We hold the three fund portfolio, a municipal fund and treasury bills. That’s it. Our children have a balanced index fund. Simple and relatively tax efficient.

Claiming SS at full retirement age is ok. Normally the higher wager earned delays to 70, but that’s up to you. In addition to the 8% increased payout, the surviving spouse gets the higher SS.

Good luck to you.
"I started with nothing and I still have most of it left."
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HMSVictory
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Re: How to re-enter market in 2023

Post by HMSVictory »

SevenBridgesRoad wrote: Sun Jan 22, 2023 10:48 am
HMSVictory wrote: Sun Jan 22, 2023 9:17 am
You have to honestly after action your panic sell that you did in 2022. What caused that?
Some OPs need prescriptions. You are getting plenty.

Some OPs need to be asked questions, like a physician trying to get you to open up and talk about the real problem, before prescribing.

You asked 4 questions, three of which show you don't understand your problem. Bright red flags.

So, would you answer HMSVictory's question? Sharing your reflections (probably) will help.
Or else it will just happen again and again and again. :shock:
Stay the course!
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mruizesparza
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Re: How to re-enter market in 2023

Post by mruizesparza »

So my biggest concern is that my plan is viable. So I am glad you view it still good. I rechecked Fidelity's Monte Carlo and this is what it shows if I move to a balanced allocation.
It shows 3 cases for balances at age 90 if we move to a balance allocation
>Significantly Below Avg Market performance $345K, withdrawal rate stays at 5.2%
>Below Avg Market performance $754K. withdrawal rate drops to 3.5% at 67
>Avg performance $1.8MM, withdrawal rate drops to 2.7%

So my plan is get to 60/40. Using Mr. Larimore postings the investments and allocations are:
VTI 42%
VGSTX 18%
VGIT 50% (VGIT is an idea from a 3 fund believer who leaned towards treasuries vs corps)

How I get there will take some time. I need a view on this.
So I move lump sum to the VTI and VGSTX for mine and my wife's IRA.
Per Fidelity, the individual bonds ($190K about 40 at $5K) will take time to sell or I can just invest them in VGIT when as mature. The two treasury ladder of about $389K, two thirds will mature by April of 2024 will move to VGIT.

Yes we do have a mortgage of $160K and a payment of $714 ($8.5K/yr) with taxes and insurance of about $3.5K per year.

So have cash about $77K in the brokerage should get us to April 2024, when is the time we would begin drawing from the IRAs which will have had a year in the 3 fund model.

And there is a possibly I could work for a yr to give us some more time to get things even more stable.

What do you think?
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Wiggums
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Re: How to re-enter market in 2023

Post by Wiggums »

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Last edited by Wiggums on Mon Jan 23, 2023 4:35 pm, edited 1 time in total.
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Wiggums
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Re: How to re-enter market in 2023

Post by Wiggums »

mruizesparza wrote: Mon Jan 23, 2023 4:25 pm So my plan is get to 60/40. Using Mr. Larimore postings the investments and allocations are:
VTI 42%
VGSTX 18%
VGIT 50% (VGIT is an idea from a 3 fund believer who leaned towards treasuries vs corps)
Names for those funds are:
VTI - Vanguard Total Stock Market Index Fund ETF

VGSTX - Vanguard Star Fund Investor Shares

VGIT - Vanguard Intermediate-Term Treasury Index Fd ETF


Note: Those percentages total 108%
"I started with nothing and I still have most of it left."
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mruizesparza
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Re: How to re-enter market in 2023

Post by mruizesparza »

Regarding why I sold. There have been many questions on this. So this is a tender topic to discuss but here goes. As we went into retirement, I began to make sure my wife was at the table like never before on our finances. For most of our marriage, my updates were how much I was contributing to our 401K and her IRAs. So in retirement we both had our eyes on the markets, market TV programs, and our balances. So with Sept being so painful and more rate hikes to come, us both looking at all the red on the screen, we made the decision...easier for her than me. And we both saw our money get creamed in the dot.com and road that down. But we over allocated to tech. This time, being older, I did not want to make a decision that would compromise her retirement and that meant not over-riding her. Believe me, we have talked about this 1000 times and she knows it was a mistake. But with all the changes in the country we began to think the worst was happening to the markets as well.

So we understand markets is not something we can out smart.
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mruizesparza
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Re: How to re-enter market in 2023

Post by mruizesparza »

Yes.
VTI, Vanguard Total Stock Market ETF 42%
VGTSX, Vanguard Total Intl Stock Index Inv 18%
VGIT Vanguard Intmdt-Term Trs ETF, 40%
retireIn2020
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Re: How to re-enter market in 2023

Post by retireIn2020 »

I second all the suggestions for an advisor like Vanguard PAS. This bad decision cost you in the neighborhood of $75k - $80k, How many of those can you afford? Also, bad financial decisions can lead to animosity and finger pointing (or worse) between couples.

Vanguard PAS with .3 % fee will get you as good an advisor as most at higher cost.
Retired as of July 2020
SevenBridgesRoad
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Re: How to re-enter market in 2023

Post by SevenBridgesRoad »

mruizesparza wrote: Mon Jan 23, 2023 4:36 pm Regarding why I sold. There have been many questions on this. So this is a tender topic to discuss but here goes. As we went into retirement, I began to make sure my wife was at the table like never before on our finances. For most of our marriage, my updates were how much I was contributing to our 401K and her IRAs. So in retirement we both had our eyes on the markets, market TV programs, and our balances. So with Sept being so painful and more rate hikes to come, us both looking at all the red on the screen, we made the decision...easier for her than me. And we both saw our money get creamed in the dot.com and road that down. But we over allocated to tech. This time, being older, I did not want to make a decision that would compromise her retirement and that meant not over-riding her. Believe me, we have talked about this 1000 times and she knows it was a mistake. But with all the changes in the country we began to think the worst was happening to the markets as well.

So we understand markets is not something we can out smart.
I know this is hard for both you and your wife. Doing the work of personal and couples reflection and then saying it out loud to a supportive group (BH can serve that role) is a strong step.

Consider and report back:
1) You and your wife didn’t have enough confidence in your retirement plan. You need a retirement withdrawal and spending plan that brings you confidence, even in the inevitable market ups and and downs. What is that new plan? What is your (you and your wife) confidence level in that plan?
2) You and your wife would benefit from a behavioral circuit breaker. What is your very simple plan, in writing, to slow down your reaction to extreme anxiety next time? Don’t just say, we’ve learned and will do better next time. That’s great, but it’s not a plan. What is your simple circuit breaker plan?
3) Eliminate your consumption of “market TV programs”. Most are designed to create fear. You and your wife are in this for the long haul ('til death) and so-called news is dangerous and unnecessary to the success of your new retirement plan, the one in which you have extreme confidence. What will be your new approach to “news”?
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Rick Ferri
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Re: How to re-enter market in 2023

Post by Rick Ferri »

In fact, if I remember correctly, some very smart folks like Rick Ferri propose 30/70 for most retirees.
This is a misstatement. I do not propose 30/70 for most retirees. I wrote an article years ago suggesting that people have at least 30% in equity in retirement to achieve at least the inflation rate, then work their way higher in equity from there based on their unique situation.

Rick Ferri
The Education of an Index Investor: born in darkness, finds indexing enlightenment, overcomplicates everything, embraces simplicity.
secondopinion
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Re: How to re-enter market in 2023

Post by secondopinion »

Rick Ferri wrote: Tue Jan 24, 2023 6:10 pm
In fact, if I remember correctly, some very smart folks like Rick Ferri propose 30/70 for most retirees.
This is a misstatement. I do not propose 30/70 for most retirees. I wrote an article years ago suggesting that people have at least 30% in equity in retirement to achieve at least the inflation rate, then work their way higher in equity from there based on their unique situation.

Rick Ferri
I think at least 30% in stocks is smart. But I myself would not be at merely 30% in stocks in retirement unless I had a bunch of rental properties or had my own business to glean income. I much rather ride at 50% personally at that point (since I do take credit risk in my bonds).
Passive investing: not about making big bucks but making profits. Active investing: not about beating the market but meeting goals. Speculation: not about timing the market but taking profitable risks.
Katietsu
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Re: How to re-enter market in 2023

Post by Katietsu »

mruizesparza wrote: Mon Jan 23, 2023 4:42 pm Yes.
VTI, Vanguard Total Stock Market ETF 42%
VGTSX, Vanguard Total Intl Stock Index Inv 18%
VGIT Vanguard Intmdt-Term Trs ETF, 40%
Wow. What a change.

I am someone who is not far off from your age. I too fight the feeling of being skittish now despite being only mildly stressed by the tech bubble and great recession.

For me, I keep a slice in things that will not visibly go down in value. Right now that means bank CDs, treasuries with less than an 2 year maturity and HYS accounts. I might earn little less in the long run than VGIT. But it means that I am not tempted to liquidate investments when the headlines look bad.
Phaedrus
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Re: How to re-enter market in 2023

Post by Phaedrus »

mruizesparza wrote: Mon Jan 23, 2023 4:36 pm Regarding why I sold. There have been many questions on this. So this is a tender topic to discuss but here goes. As we went into retirement, I began to make sure my wife was at the table like never before on our finances. For most of our marriage, my updates were how much I was contributing to our 401K and her IRAs. So in retirement we both had our eyes on the markets, market TV programs, and our balances. So with Sept being so painful and more rate hikes to come, us both looking at all the red on the screen, we made the decision...easier for her than me. And we both saw our money get creamed in the dot.com and road that down. But we over allocated to tech. This time, being older, I did not want to make a decision that would compromise her retirement and that meant not over-riding her. Believe me, we have talked about this 1000 times and she knows it was a mistake. But with all the changes in the country we began to think the worst was happening to the markets as well.

So we understand markets is not something we can out smart.
I don’t mean to rag on you as I’ve been there - and have made the same mistakes - myself. But just want to say that the latest crisis is ALWAYS going to feel like it’s different or worse as it is happening. The cacophony of talking heads, pundits, friends, papers, etc., will scare you. And sometimes it may actually be worse (e.g. the 2008 crisis was particularly scary). I suspect and fear that you will make the same mistake the next time another crisis comes along, as you will have forgotten how you feel now and only feel the then current pervasive anxiety in the world. So I would echo those here and:

1. Strongly recommend you consider paying Vanguard PAS 0.30%. Having someone you can call and handhold next time you feel like making changes will more than save their minimal fees.

2. Deeply think about what kind of asset allocation is appropriate for you, and if in doubt, tend to the more conservative side. Whatever asset allocation mix you pick, look up the worst drawdown percentage on record, and discuss with your spouse if you can stomach living through that without selling.
dcabler
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Re: How to re-enter market in 2023

Post by dcabler »

mruizesparza wrote: Mon Jan 23, 2023 4:42 pm Yes.
VTI, Vanguard Total Stock Market ETF 42%
VGTSX, Vanguard Total Intl Stock Index Inv 18%
VGIT Vanguard Intmdt-Term Trs ETF, 40%
If you have an account at Fidelity and you click on the "performance" tab, one thing it does is to compare historic performance of your accounts vs. a reference portfolio, of which they have several choices

What you show above is very close to their 60/40 reference portfolio which is
42% Total US Stock Market
18% Total International Stock Market.

The difference is mainly on the fixed income side which they show as
35% Total US Bond
5% Cash via a T-Bill Index

I personally believe that taking the 40% income and putting is all in an intermediate Treasury bond fund is just fine and is what I would do if I were a 3-fund portfolio holder. In fact, in the past my bond holdings were an intermediate treasury fund, just not VGIT.

You've learned that one of the biggest risks an investor can face isn't the exact portfolio choice itself, but behavioral errors. Though certain portfolios make pose more risk of succumbing to behavioral errors than others. And many investors have come to your aid here with some great advice. I don't have much to add except that many of us have been there and it ultimately took making our own errors to get to the point where we can grit our teeth through market turmoil.

One other option you might want to consider is a "one fund portfolio" such as is described here: viewtopic.php?t=287967

Expense ratio will be a little higher than a DIY 3-fund portfolio and their underlying holdings might not be exactly what you'd do yourself, but they are good options for a "set and forget" portfolio that you might be less inclined to tinker with.

The thread's author gives a couple of examples, but for a 60/40 two good choices are:
Mutual Fund: Vanguard's 60/40 LifeStrategy VSMGX
ETF: iShares 60/40 Core Allocation AOR

Cheers.
Last edited by dcabler on Wed Jan 25, 2023 5:34 am, edited 2 times in total.
Ed 2
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Re: How to re-enter market in 2023

Post by Ed 2 »

I think this was the last “ I missed the market recovery , is it good time to re-enter?” post. Market is going to kaboom again. Lol :D
Sorry for been a party popper , but I’ve developed very good intuition.
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Re: How to re-enter market in 2023

Post by livesoft »

arcticpineapplecorp. wrote: Sat Jan 21, 2023 9:17 pm...
the chart below (and highlighted link) shows two things: 1. if you miss some of the best days, you could lose out on a lot of money and 2. some of the best days occurred soon after some of the worst days so stay in the market or you'll miss out. ...
I think that it also needs to be pointed out that
some of the best worst days occurred soon after some of the worst best days.
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azphx1972
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Re: How to re-enter market in 2023

Post by azphx1972 »

SevenBridgesRoad wrote: Tue Jan 24, 2023 11:22 am 3) Eliminate your consumption of “market TV programs”. Most are designed to create fear. You and your wife are in this for the long haul ('til death) and so-called news is dangerous and unnecessary to the success of your new retirement plan, the one in which you have extreme confidence. What will be your new approach to “news”?
Strongly concur with this. I've already stopped paying attention to news for the most part, but after seeing the fear and paranoia it's created within my own parents, my plan in retirement is to tune out all news in the form of TV/social media/apps and check my portfolio infrequently so that I can focus on staying healthy/active and enjoying life.
Ed 2
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Re: How to re-enter market in 2023

Post by Ed 2 »

azphx1972 wrote: Wed Jan 25, 2023 7:15 am
SevenBridgesRoad wrote: Tue Jan 24, 2023 11:22 am 3) Eliminate your consumption of “market TV programs”. Most are designed to create fear. You and your wife are in this for the long haul ('til death) and so-called news is dangerous and unnecessary to the success of your new retirement plan, the one in which you have extreme confidence. What will be your new approach to “news”?
Strongly concur with this. I've already stopped paying attention to news for the most part, but after seeing the fear and paranoia it's created within my own parents, my plan in retirement is to tune out all news in the form of TV/social media/apps and check my portfolio infrequently so that I can focus on staying healthy/active and enjoying life.
This problem can’t be fixed as longer humans are exists . My chill pill is my hobby - behavioral economics.
"The fund industry doesn't have a lot of heroes, but he (Bogle) is one of them," Russ Kinnel
WillRetire
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Re: How to re-enter market in 2023

Post by WillRetire »

Rick Ferri wrote: Tue Jan 24, 2023 6:10 pm
In fact, if I remember correctly, some very smart folks like Rick Ferri propose 30/70 for most retirees.
This is a misstatement. I do not propose 30/70 for most retirees. I wrote an article years ago suggesting that people have at least 30% in equity in retirement to achieve at least the inflation rate, then work their way higher in equity from there based on their unique situation.

Rick Ferri
My apologies. I must have misunderstood this:
https://www.forbes.com/sites/rickferri/ ... aee67a5dae
retireIn2020
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Re: How to re-enter market in 2023

Post by retireIn2020 »

WillRetire wrote: Wed Jan 25, 2023 12:18 pm
Rick Ferri wrote: Tue Jan 24, 2023 6:10 pm
In fact, if I remember correctly, some very smart folks like Rick Ferri propose 30/70 for most retirees.
This is a misstatement. I do not propose 30/70 for most retirees. I wrote an article years ago suggesting that people have at least 30% in equity in retirement to achieve at least the inflation rate, then work their way higher in equity from there based on their unique situation.

Rick Ferri
My apologies. I must have misunderstood this:
https://www.forbes.com/sites/rickferri/ ... aee67a5dae
I don't think you misunderstood it or your being facetious. Bonds were outperforming stocks from 2000 up until right about the time of the article. It sounded like a good strategy at the time.

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Rick Ferri
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Re: How to re-enter market in 2023

Post by Rick Ferri »

“ Of course, I’m speaking about the average investor and everyone is different. Some people will decide 30/70 is too conservative and move up the risk scale. ”

Let’s put this in perspective. The “average investor” has $300,000 in savings as they enter retirement.
The Education of an Index Investor: born in darkness, finds indexing enlightenment, overcomplicates everything, embraces simplicity.
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Re: How to re-enter market in 2023

Post by KyleAAA »

You should learn your lesson that you aren't able to time the market. So stop trying to time the market and get back into your target asset allocation now without regard to whether or not earnings risk is priced into the market. Probably the real issue is that 60/40 was too aggressive for you. Maybe consider 40/60?
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Re: How to re-enter market in 2023

Post by lostdog »

jfave33 wrote: Mon Jan 23, 2023 1:20 am
Nate79 wrote: Sun Jan 22, 2023 5:52 pm Step one is to admit you have no clue what you are doing. Maybe buy a target date fund and set and forget especially since the portfolio is a mess. Your feelings and ability to time the market has failed you.
Yes this nails it for me. The simplicty the OP lacks. Getting to the root of the problem ie the OP thinks they know how to beat the market at every turn and fails. Set and let it run. Everytime the you think you can make it better give yourself a slap on the wrist and leave it alone. By the time social security kicks in they will be fine.
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mruizesparza
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Re: How to re-enter market in 2023

Post by mruizesparza »

Thank you for these comments. Taking steps to get the portfolio in place. Thank again so much for the encouragement and focus.
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Re: How to re-enter market in 2023

Post by White Coat Investor »

mruizesparza wrote: Sat Jan 21, 2023 8:23 pm Currently retired as of 5/1/2021.
Household income: Withdrawing $6000/month,$72k annually, withdrawals coming from brokerage account
Emergency funds: $15k cash
Debt: $166K Mortgage
Tax filing status: Married filing jointly
Tax rate: 15% federal, 5% state
State of residence: NC
Age: 61; wife: 59
Social Security: we will both apply at age 67
Our Current assets $1,308MM: 10% stocks / 30% bonds and 60% cash. Self-Managed at Fidelity

Fidelity Monte Carlo with returns significantly below avg returns show ending balance of $254 at age 90 for my wife and I

My IRA
Bonds $579K, 36%, Par $614K (65/35 Treasuries/Corp), YTM 4.5%
52 individual bonds, $190K current value, $210K YTM 4.12% (For example: WASTE MANAGEMENT INC COMPANY GUARNT GLB 02.000% JUN 01 2029 Market Value includes $23.77 of accrued interest)and Treasuries are in a 2 year ladder

ETFs & Stocks, 8%
Vanguard Health Care ETF, $10K, 0.10%
Vanguard High Yield ETF, $54K, 0.06%
Salesforce, $4.3,
Honeywell, $5.2K
JnJ, $3K
TJX, $5K

CASH $381K, 56% Fidelity Premium Money Market 4.27% 7 day Yield
Total $977K

My Roth
ETF & Stocks $7K, 53%
Vanguard High Yield, $4K. 0.06%
Halliburton, $3.5K
Morgan Stanley, $2.4K
Constellation Brands, $3.5

CASH $11.5K, 47% Fidelity Money Market 4.15% 7 day Yield
Total $25K

Her IRA
Bonds $74K, 45%, Par $74K (Treasuries), YTM 4.5%
Treasuries are in a 2 year ladder
Total $74K

ETFs & Stocks, $16K 10%
Vanguard Health Care ETF, $2K, 0.10%
Vanguard High Yield ETF, $10K, 0.06%
JnJ, $3.9K

New Annual Contributions
none

CASH $73K, 45% Fidelity Premium Money Market 4.27% 7 day Yield
Total $163K


Our Brokerage Account Taxable Funds
Stocks $11K, 15%
ALPHABET INC SHS $11,762 16%

Cash $72K, 86%

Total $85K

Deferred Income $28K
Blackrock 2030 Target fund

HSA $30K
100% Blackrock target date 2030


On 9/27/22, I panicked and sold most of our holdings. We were in 60/40 equity to bond allocation. I regret it now. I missed the Q4 run in the market. I am withdrawing cash from brokerage account for living expenses. Our goal is to be fully invested at a 50/50 allocation to equities and bonds by year end. As the bonds, mature I plan on moving them into iShares 1-3 Year Treasury Bond ETF.
My main concern is earnings risk that is not priced into the market and I do not want to buy at high.

Questions:
1. Should begin dollar cost averaging in April as Q1 earnings season report out or wait till June?
2. Do the following allocations and investments make sense for my wife and my IRA? Here are the allocations and investments:
- 50% iShares 1-3 Year Treasury Bond ETF, SHY, 0.15%
- 43.5% Vanguard Value Trust, VTV, 0.06%
- 2% iShares S & P small cap, IJR, 0.06%
- 2% iShares S & P mid cap, IJH, .05%
- 2% iShares Core MSCI Emerging Mkts, IEMG, 0.09%
.5% Vanguard Materials, VAW, 0.10%
3. Does the standard Boglehead 3 fund portfolio (42/18 /40 approach; US/International/Bonds) still work and is it a better option?
4. Is my retirement plan compromised?

I greatly appreciate any feedback and insights from this community on anything regarding the plan.
Did you fix whatever caused you to panic sell before? 50/50 doesn't behave much differently from 60/40. You don't have enough money to mess this up again.

Also, don't bother with <5% in anything.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course
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