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Old 12-17-2016, 10:19 AM
 
29,800 posts, read 34,894,042 times
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Quote:
Originally Posted by reneeh63 View Post
I only in the last couple years went from what was essentially 100% equities in my retirement investments. So now that I'm at about 75% equities I just realize that to stay there I need to keep any eye on it...I'm not yet retired so taxes aren't an issue but I need to learn up on all that so I'm ready when it does.
Good luck, you know what you are doing but this can get complicated post retirement. It something I have found that folks in there late 60's who are looking at CCRC's down the road are realizing. Entitlement reform could make it more challenging
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Old 12-18-2016, 03:44 AM
 
71,769 posts, read 71,875,234 times
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Quote:
Originally Posted by jrkliny View Post
Too bad you opted for a "glide path" with a low allocation in equities.
not at all . remember i use high yield funds instead of so much in equity. they are out performing most stock funds.

yet their beta is 40% less . they have 40% less swing than the s&p 500 .

the equity fund i use in that model is up 16,54 vs my high yield position at 15.16 . so while stock fund allocation is low the high yield is a proxy for owning more in equity funds . on a risk vs reward basis it has been the better deal . low allocations to equity does not have to mean low returns if the other components have the lifting power when it is their day in the sun .

just look at how some of the popular more stock heavy portfolio's failed to keep pace over time with something as simple as the golden butterfly portfolio with it's 40% equity position split between the s&p 500 and a small cap value fund . the other components in the model respond with so much volatility when it is their day to shine that they keep the portfolio gaining when others are falling .

it regains ground all the time in the down turns while heavier equity based portfolio's are losing money .

so the real deal is when you go over a full cycle . odds are more aggressive portfolio's will fall more while less aggressive fall less and depending on design make money and eventually they meet close in the middle somewhere . sure you may be a head when stocks are in a bull run , but things adjust once the other part of the cycle comes .

some of the comparisons in that real time portfolio analyzer i posted earlier are mind blowing when you see how much smaller the draw downs are on some portfolio's yet the performance is right on target .

looking at 100% equity as an example , if we go back to 1972 to get a good smattering of different time frames it averaged 7.50% in real return (after inflation ) , had a std deviation (swings ) of almost 18% , lost money 33% of the time and made it's average 14% of the time .

a 60/40 mix averaged 5.80% after inflation , had a std deviation of almost 12% swings , lost money 30% of the time ,hit its average 32% of the time .

looking at the golden butterfly with 40% equity it averaged 6.00% , had a std deviation of less than 8% , lost money just 20% of the time and made it's average 45% of the time .

what is interesting is the coffee house portfolio and golden butterfly came in pretty close yet the golden butterfly uses 20% in gold . that we all know was a horrible investment , but as the results show while gains sucked the gold provided a real time floor that rarely resulted in negative real returns over longer periods of time and provided kind of a floor for the portfolio in down turns .

which do you think might have given the smoothest sequence risk ride for a retiree drawing the bulk of their income from their portfolio ? most likely not the ones that lost money more often and had greater numbers of down years .

so portfolio design is based on a whole lot more than just allocation figures to equity's .

like i said at this stage i couldn't care less about maximizing every point in gain . if i was i would be a 100% sector portfolio investor .

what i want is the lowest volatility (lowest sequence risk ) that meets our goals over the full cycle . i have zero interest in making our retirement portfolio any more volatile than i need to ..

https://portfoliocharts.com/portfolios/

Last edited by mathjak107; 12-18-2016 at 05:03 AM..
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Old 12-18-2016, 06:42 AM
 
Location: RVA
2,172 posts, read 1,270,926 times
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One must remember that all "gains" are only realized if the holding is sold at the right time. This where a steady income has its advantages over appreciation returns. It would be too stressful as I aged to depend on investment timing to provide the bulk of my income. But as a supplement, not critical to living, that can be harvested when doing well, it is fine to deal with the volatility. Again, the argument for using savings to delay filing for SS as the easily best value annuity currently available.
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Old 12-18-2016, 01:15 PM
 
71,769 posts, read 71,875,234 times
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realized is a taxing event not an investment event . your worth is your worth at any point in time whether you choose to care in the interim or not .

it would be ludicrous thinking to think that if you choose to keep the money in play over night as opposed to selling at the close and re buying the same investment at the open somehow that changes your value .

when you calculate your draw rate it is on portfolio balance whether you sell or not has no bearing . there is no such thing as it is only a loss or gain on paper .

your value is your value whether in the same investment or in play in a different investment . like working on commission ,it changes daily ..

it is what it is .-period

Last edited by mathjak107; 12-18-2016 at 01:27 PM..
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Old 12-18-2016, 02:26 PM
 
3,145 posts, read 1,733,500 times
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Quote:
Originally Posted by TuborgP View Post
Forget who but the expectation is that regulations will be cut back and money and time spent on compliance will ease and resources can be redirected for economic growth. The financial industry will be unshackled and banks etc can increase profit and thirdly American energy production will become unshackled and see a boom. All of this and other burdens being removed will increase shareholder value.

Also money will be allowed to be repatriated from overseas without the brunt of it being used for the purposes determined by the Executive branch. It us felt that now it can comeback and be used to increase dividends, buybacks merger acquisitions etc. All good for shareholders. It is about the investor class which includes us pensioners as our pension funds are mega investors .

Also small caps have surged as they would really benefit the most from deregulation and ACA repeal.

It us about profit which us why we invest!
I thought you did not want politics in this thread but the above is politics. cutting back regulations and compliance may be good for the market but not for people. Business and commerce is not people.

The market that goes up can also crash. so elation over it is only an illusion of wealth.
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Old 12-18-2016, 05:03 PM
 
29,800 posts, read 34,894,042 times
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Quote:
Originally Posted by cb2008 View Post
I thought you did not want politics in this thread but the above is politics. cutting back regulations and compliance may be good for the market but not for people. Business and commerce is not people.

The market that goes up can also crash. so elation over it is only an illusion of wealth.
That isn't nor is what you wrote political it is take your pick economics or finance. Not mention of party or people by either of us.
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Old 12-19-2016, 08:22 AM
 
Location: Center City
6,865 posts, read 7,815,386 times
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There is more to life than our portfolio balance.
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Old 12-19-2016, 08:30 AM
 
71,769 posts, read 71,875,234 times
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that portfolio balance is wht gives us choices in life .

money may not buy happiness but it sure buys choices . like when medicaid wants to put you in a bed 100 miles away from your family .

sure , we all love to say the dough ain't important , especially if we have little but one of the worst feelings in the world is when you want to make a choice but have no choice because you lack the funds to have a choice .

that is a story i have seen repeat over and over , including in my own life
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Old 12-19-2016, 09:32 AM
 
Location: Center City
6,865 posts, read 7,815,386 times
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Quote:
Originally Posted by mathjak107 View Post
that portfolio balance is wht gives us choices in life .

money may not buy happiness but it sure buys choices . like when medicaid wants to put you in a bed 100 miles away from your family .

sure , we all love to say the dough ain't important , especially if we have little but one of the worst feelings in the world is when you want to make a choice but have no choice because you lack the funds to have a choice .

that is a story i have seen repeat over and over , including in my own life
Yes.

But there is more to life than our portfolio balance.
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Old 12-19-2016, 09:36 AM
 
Location: SoCal
13,278 posts, read 6,362,704 times
Reputation: 9903
I'm sure there is but can we stop lecturing people if we're happy, truly, who cares.
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