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Trying to time things is a foolish game .if it is long term money just ride the cycles . You will grow a lot more money over time than trying to time when this long term money should be in or out . More money is lost or given up in anticipation of the next down turn than has been lost in the down turn assuming you don't shoot yourself in the foot behaving badly
Even at 65 i have long term money not used to eat for 20-30 years. in fact we all have this need . It woud be a bad move trying to time when this money should be in or out with decades to go. A 40/60 to 60/40 allocation provides decades of shorter term cash flow just by the nature of its make up.
Trying to time things is a foolish game .if it is long term money just ride the cycles . You will grow a lot more money over time than trying to time when this long term money should be in or out . More money is lost or given up in anticipation of the next down turn than has been lost in the down turn assuming you don't shoot yourself in the foot behaving badly
Even at 65 i have long term money not used to eat for 20-30 years. in fact we all have this need . It woud be a bad move trying to time when this money should be in or out with decades to go. A 40/60 to 60/40 allocation provides decades of shorter term cash flow just by the nature of its make up.
It's all about time horizon, as you noted. Certainly, as your time horizon increases, risk is reduced.
Well like i said the standard allocations for retirement have been working fine for as long as we have had markets. That mix stays constant good or bad . There is no trying to dodge the bullet and time the markets. It provides enough in low volatility assets to carry you through a long long time without playing the timing game . Which have been proven to hurt you
Well like i said the standard allocations for retirement have been working fine for as long as we have had markets. That mix stays constant good or bad . There is no trying to dodge the bullet and time the markets. It provides enough in low volatility assets to carry you through a long long time without playing the timing game . Which have been proven to hurt you
I'm not advocating market timing, but am advocating the merits of a financial plan. For example, we are going to be building a retirement home in 4 years. This money is in a 4 year, no risk CD. Could I earn more in the market? Perhaps, but I'm not willing to take that risk. We are planning to annuitize at least half of our portfolio in 4 years. We currently have more than enough to cover retirement living expenses, adjusted for inflation. This money is safely in a stable value fund. Why would I want to subject this money to market risk? Our Roth IRAs are invested very aggressively in stocks (domestic, international, and emerging markets) since we won't need this money for 16-18 years, if ever. The point I'm trying to make is that we need to be very careful suggesting there is a 'one size fits all' approach. If one doesn't have the skills or the desire to learn and do this type of planning, a fee-based financial planner is a good idea.
I agree with what you said 100% . But i do disagree with tryng to decide what is a risky time to be in and what is not. That is a recipe for disaster.
The whole point to retirement planning is not to do that. The down years are not ruled out. They are not only baked in but the entire concept of a safe withdrawal rate is only based on the down years.
This belief that people have that you need to ditch equities when you retire or just reduce to tiny levels without regard for the income level they hope to take can be a fatal mistake.
I agree with what you said 100% . But i do disagree with tryng to decide what is a risky time to be in and what is not. That is a recipe for disaster.
The whole point to retirement planning is not to do that. The down years are not ruled out. They are not only baked in but the entire concept of a safe withdrawal rate is only based on the down years.
This belief that people have that you need to ditch equities when you retire or just reduce to tiny levels without regard for the income level they hope to take can be a fatal mistake.
I'm in favor of having a contingency plan in case of a worst case scenario. I'm not in favor of being in the market (even a balanced portfolio) if you are going to need the money in 3-5 years.
I'm in favor of having a contingency plan in case of a worst case scenario. I'm not in favor of being in the market (even a balanced portfolio) if you are going to need the money in 3-5 years.
Nonsense. A balanced portfolio provides plenty of short term income from the bond side if stocks are down . That has no logic to it. Retirees have been rebalancing balanced portfolios yearly for the years spending cash forever. The only time i would not do it is if it is not money to live on.
You are buying a house , a car , a wedding , etc. That is outside the scope of your income generating portfolio.
That money is not allocated in the traditional fashion since it has a specific use other than being used for
Income
But if you are trying to tell us that the money you live on over next year or,3 or 4 years should not be in a balanced portfolio because it has part of it in equities i say nonsense . Big cash buckets are not needed for that
Last edited by mathjak107; 04-03-2018 at 03:01 PM..
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