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I am getting little nervous about the stock market making such large gains over the past year. I have all my retirement saving in Fidelity Funds. I think my investments are fairly aggressive the Rate of Return last year was around 19.0%. They are mainly in S&P 500 and Fidelity Freedom 2020.
I have around 3 years til retirement. Should I be investing in more conservative funds at this point?
I'm not sure if this is the right place for answers. Is there a good investment forum around?
I've also thought about trying to find a financial advisor in the area. Does anyone know a good one in the Orange County area?
Yes some of your money should be more conservative. I like the bucket idea where you put several years of the cash you will need in bucket one. Then if the market tanks you live off of bucket one and do not refill it until the market recovers. You can then have say a 5 to 10 year bucket and a 10 year plus bucket. Your current investments are probably the type that goes into the third bucket. This is a real general answer so do some research on buckets.
I am getting little nervous about the stock market making such large gains over the past year. I have all my retirement saving in Fidelity Funds. I think my investments are fairly aggressive the Rate of Return last year was around 19.0%. They are mainly in S&P 500 and Fidelity Freedom 2020.
I have around 3 years til retirement. Should I be investing in more conservative funds at this point?
I'm not sure if this is the right place for answers. Is there a good investment forum around?
I've also thought about trying to find a financial advisor in the area. Does anyone know a good one in the Orange County area?
It's understandable that you're having questions, and it's a good thing you're looking at your allocation. The S&P fund, how much is in that percentage wise. You may want a bit of diversification in conjunction, maybe some ETF bond funds just for example, but not saying that should be where you go.
As far as your target date fund, with 3 years to retirement, it's in a VERY conservative mode, I would guess without looking at it simply due to the way target date funds are structured, that it's almost 75% cash or cash equivalents if not more. No need to worry there, unless you want some additional return which means risk.
I am getting little nervous about the stock market making such large gains over the past year. I have all my retirement saving in Fidelity Funds. I think my investments are fairly aggressive the Rate of Return last year was around 19.0%. They are mainly in S&P 500 and Fidelity Freedom 2020.
I have around 3 years til retirement. Should I be investing in more conservative funds at this point?
I'm not sure if this is the right place for answers. Is there a good investment forum around?
I've also thought about trying to find a financial advisor in the area. Does anyone know a good one in the Orange County area?
Why don't you have it all in the Fidelity Freedom 2020? Target date funds are supposed to be all-in-one. If you're not using them that way, then you are defeating the purpose of owning one. Target Date funds do the asset allocation for you so that you don't have to think about it. They're for people who don't like thinking about this stuff.
Yes, you should have some relatively liquid assets. If things turn and you are retired, unless you have cash reserves outside your Fidelity funds, you'll still have to sell some of the Fidelity 2020 if you're planning to start a drawdown immediately. Even in a 2020 fund, this might not be a good thing. That said, you don't have to do anything until age 70-1/2 - and that is only if you're in tax-deferred IRAs/401k.
I follow bucket principle - two years cash very liquid; up to another five years moderately conservative investment (because most markets recover before then); rest is in growth with varying degrees of risk. So, even if market collapses when you retire, you have the cash to wait it out and don't need to sell at the bottom. After the 2008 crash, best funds recovered to their pre-crash levels in about two years.
Christine Benz at Morningstar has set up bucket portfolio models. Start learning about buckets, here:
just keep in mind buckets offer no financial advantage vs just rebalancing from stocks and bonds and may even hurt you with no better protections . .
we like to compartmentalize things in our heads and mentally we are more comfortable , but the reality is in a down market all rebalancing would be from bonds and stocks would not be sold . this is another urban myth ..
40/60 is about where i am now retired , i let things run up to 50/50 and rebalance . current years spending is kept in cash instruments .
buckets rebalance based on years of money left , you can be 80 , just finishing off buckets 1 and 2 and getting ready to refill and be 80% equities prior to refilling .
convention rebalancing is rebalanced based on allocation.
buckets have no allocation target range , as you spend cash and bonds stock allocation increases while conventional rebalancing does have a fixed allocation . .
Last edited by mathjak107; 01-08-2018 at 02:46 AM..
in times of high inflation but cash got hurt more . you got crushed in cash and eventually when inflation and rates came down those bonds were golden with those rates ,
I am getting little nervous about the stock market making such large gains over the past year. I have all my retirement saving in Fidelity Funds. I think my investments are fairly aggressive the Rate of Return last year was around 19.0%. They are mainly in S&P 500 and Fidelity Freedom 2020.
I have around 3 years til retirement. Should I be investing in more conservative funds at this point?
I'm not sure if this is the right place for answers. Is there a good investment forum around?
I've also thought about trying to find a financial advisor in the area. Does anyone know a good one in the Orange County area?
What if any other sources of income will you have. Should we assume SS? Any pensions?
What if any other sources of income will you have. Should we assume SS? Any pensions?
My SS will be around $2800 mo. We have two houses one of them paid in full. I also put money into our company stock which is very stable even during downturns. My pension is a Defined Contribution which the company contributes and is in Fidelity funds. I manage the portfolio. ALso have the regular 401k which I contribute and the company matches also in Fidelity.
My wife also will have SS and she has Defined Contribution 401k too.
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