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Ask this question again in 2 or 3 years when we're in the middle of another Great Recession. You do plan on still being retired then, right?
Same here. Generally, the philosophy I go by is to not get attached to a stock - if the money I could get by selling that stock would give me a greater return in a different stock, then it's done. I used to be a daytrader, and one of the first things I learned is that it's better to sell a day too early, and leave some money on the table, than a day too late and have to cancel that 3-week hiking trip in Big Sur.
Yes. Any profit is far better than any loss. Greed will do that. I have suffered way more "just one more day" losses than wins. Intentionally guessing with no justification is financial suicide. But to the point, I would NEVER have called the rise from 2008 through October 2016 a slow and steady bull!! Seriously. We are looking at more than 150% growth in less than 7 years. (March 2009 the Dow was 6547). It was a fast bull through about late 2014 then became a volatile bull after that. 17-18% a year is unsustainable. Even 10-11% still requires a correction and a bear to reset and re continue. Yes, equities since 2008 have been the smart place to be, and like you, I have benefited significanlty too. But because they have been the only place to be, all other safer venues have gone by the wayside to temper a sudden bear, which are alos places that non market investors could keep funds protected. I used to keep maybe 25% in long term CDs when 7% at the Credit Union was normal. It was at least inflation meeting and possibly beating, but not for the last 6 years at least. A HIGH rate 5 year CD is in the 1.85% range. With about any dividend stock pulling 4-5%? Makes no sense. Everyone with money to grow has it in the stock market because it is the only place to make any money.
Of course compared to the rock star decades of the 1950s, 80s, & 90s, it WAS a steady gain. But look what those decades cost investors the following decades. The 60s & 70s, TWENTY YEARS were returns of nothing, followed by huge inflation. The 2000s was negative. But at least during those years there was a physical basis for the growth. This growth is based on sentiment and reluctance IMO..
Last edited by Perryinva; 12-12-2016 at 04:36 PM..
Do any of you folks rebalance at the end of the year or beginning of the new year? What about RMD's or paying taxes. Isn't this a good time for a market uptick? With the hit in bonds they were already going to throw a curve to our allocation and now with the uptick in equities isn't this a good time to adjust and raise cash for good purposes? Even for drawdown if you do it for the year at one time.
Do any of you folks rebalance at the end of the year or beginning of the new year? What about RMD's or paying taxes. Isn't this a good time for a market uptick? With the hit in bonds they were already going to throw a curve to our allocation and now with the uptick in equities isn't this a good time to adjust and raise cash for good purposes? Even for drawdown if you do it for the year at one time.
I've taken some profits recently, bought a few stocks, but plan to keep a close eye on the new administration and see what changes they put in place. Changes in healthcare, military ventures, and infrastructure are a few things I'll watch. Right now I'm slightly over 25% cash since some of the stocks I'd like to own are too overbought at present. I only buy individual stocks or ETF's, but I try to be in at least 4 areas for balance.
Unfortunately many of us have missed the good fortune the last month has given many of us. If you have equity investments a pension or government services that benefit from tax revenue be thankful. Other than bonds it has been a good time for retirees and near retirees.
They have all benefited from the stellar stock market performance and all that I mentioned will benefit from what is appearing to be a successful 2016. I am sure pension fund managers regardless of ideology are happy and I know my portfolio could care less. Yours doesn't does it?
Are people who benefit from fully appreciative of our good fortune, regardless of the reason?
DH says this: The market giveth and the market taketh away.
DH says this: The market giveth and the market taketh away.
So selling is locking the profit or loss in and since for many of us this time of the year will involve selling this is a good thing and once sold and profit taken the market can no longer taketh.
Ummmmm you must be younger and not at a point where you are actually using your investments either taxable or non taxable. Even if you have a cash fund, once used you need to replenish etc etc etc. For us we are nearing the point where we need to replenish our cash fund for 2017-18 and that means a rotation of money to do that and rebalance allocations. Also we have RMD's starting in 2018. With the decline in bonds it might be to our advantage to liquidate equities for either cash and or to buy bonds on the cheap. We also have to position ourselves for my getting SS in 2018 etc etc. Do you ever sell? If so do you do it as needed or do you have a fund to access with minimum tax consequences and minimum loss risk?
Rebalancing is not meant to increase growth but to decrease risk. Usually you're losing a bit of growth and lowering risk to a greater degree. If your plan is to just keep increasing the percentage of your portfolio that's in stocks then just never rebalance. That's not what most aim to do though so don't fool yourself.
Do any of you folks rebalance at the end of the year or beginning of the new year? What about RMD's or paying taxes. Isn't this a good time for a market uptick? With the hit in bonds they were already going to throw a curve to our allocation and now with the uptick in equities isn't this a good time to adjust and raise cash for good purposes? Even for drawdown if you do it for the year at one time.
I do not rebalance very often, certainly not on a schedule. But I am a little loose with the AA and let it waver between 60/40 and 65/35. When I make a withdrawal I pull it from whatever is over the allocation for that asset. I make withdrawals quarterly.
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