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In my younger years, I made a lot of money with Ron Rowland’s Single Sector Portfolio and later with Fidelity Monitor’s Sector Portfolio (Fidelity Insight was purchased by Fidelity Monitor and subsequently renamed). At some point, they increased the number of sectors they traded. It made it less risky, but I believe also potentially less profitable.
fidelity monitor was always more aggressive then fidelity insight .
when they merged they became a bit less aggressive but not as volatile either.
the problem with sector funds i believe at fidelity is i think they have short term trading rules and penalties so they are not true trading vehicles
it could be a bit uncomfortable for some if they missed the boat and all those trades or investments they post or talk about are really what may amount to a dabble with a good portion of growth missed on the bulk of their money if they are truthful
guess i was right .not a lot of responses.
i guess kind of like you see who is swimming naked once the tide goes out.
my guess is so many love posting about their trades or scores but don’t want it known they basically missed the boat investing by either sitting it out with most of their liquid assets or are just being so conservative these posted trades bring little to the party overall as far as growth and
still others here talk about being invested aggressively but they only count the section of money in those funds while everything else sits in cash instruments , bonds or annuity products .
which is okay as we all have our reasons for doing what we do .
but i dont think one should portray yourself as having a high level of equities because you only count the small portion you may have in a retirement account.
so this is just a general question to see overall where we all are at this snap shot in time so we can all understand someone’s overall investing posture better when they comment.
it is also reflective on their timing skills too if they are the type that bailed out last year with the intention of beating mr market at his own game and buying in after the proverbial, elusive mr crash.
we never had a standard that everyone conforms to when talking about how much is really allocated to equities
Last edited by mathjak107; 12-24-2023 at 03:23 AM..
Everyone here is basically completely anonymous. Why act like they're not? It's weird, right?b
not really .
i mean you see many try to force up the value of net worths in discussions here by wanting to add a few hundred thousand to it because they have an income source that can spin off x amount so to them they add in a phantom lump sum like they had some lump sum that they don’t .
so there are no standards here for what constitutes net worth for purposes of our discussions or what constitutes an allocation when one says they are 80 0r 100% equities.
even that great stock they bought and posted in last your trades may mean nothing in the scheme of things depending how much of it moves the growth meter overall
so everything is relative as well as relative to the bigger picture
Last edited by mathjak107; 12-24-2023 at 04:32 AM..
I have 2 retirement accounts, one relatively large (not quite a million but getting there -- this one is from my most recent employer -- it's with TIAA) and one much smaller (a bit over $100k -- that's with Fidelity and holds some funds from my 22-years-ago employer as well as some other funds) plus a very small Vanguard account (<$10,000) plus ~$50-70k in cash, which I keep reinvesting in 4-week t-bills (or I-bonds once a year).
I took early retirement (as of 7/1/2021) when my employer offered a very generous incentive. For me, it became a no-brainer as I got my regular salary for a year and a half (that ended 12/31/22) plus, since I turned 62 in 2021, health insurance at the cheap employee rate until Medicare kicked in (which for me was 12/1/23 -- basically 1 month early due to my New Year's birthday).
I am still teaching but ONLY when/if I want to -- I have no other responsibilities. So I have been fine this year even with no incentive payments.
The one BIG issue with early retirement is that I had 95%-plus of my retirement account money IN STOCKS because I wasn't planning to retire for AT LEAST 6-8 more years -- I was tenured but that means nothing if your college runs into financial problems, as mine did during and just after COVID. Anyway, being that invested in stocks was crappy for 2022 but has been quite good this year. There was no way I was going to move my funds OUT of stocks when they were down (as in, during 2022), but now I may GRADUALLY move some, e.g. in the larger fund, maybe $100k a year for 2-3 years? (I can't imagine ever getting COMPLETELY out of stocks, although once my house is paid off -- which should be in the next 5 years at the longest, hopefully 3-4 years -- my needs will be quite modest and would likely be 100% covered by Social Security (which it looks like I won't take until 2025, unless things get weird -- at that point it will be close to $3,000/month for me).
Mathjak and all, any thoughts on the GRADUAL readjustment of funds?
Last edited by karen_in_nh_2012; 12-24-2023 at 11:11 AM..
Reason: added missing word!
I have 2 retirement accounts, one relatively large (not quite a million but getting there -- this one is from my most recent employer -- it's with TIAA) and one much smaller (a bit over $100k -- that's with Fidelity and holds some funds from my 22-years-ago employer as well as some other funds) plus a very small Vanguard account (<$10,000) plus ~$50-70k in cash, which I keep reinvesting in 4-week t-bills (or I-bonds once a year).
I took early retirement (as of 7/1/2021) when my offered a very generous incentive. For me, it became a no-brainer as I got my regular salary for a year and a half (that ended 12/31/22) plus, since I was 62 in 2021, health insurance at the cheap employee rate until Medicare kicked in (which for me was 12/1/23 -- basically 1 month early due to my New Year's birthday).
I am still teaching but ONLY when/if I want to -- I have no other responsibilities. So I have been fine this year even with no incentive payments.
The one BIG issue with early retirement is that I had 95%-plus of my retirement account money IN STOCKS because I wasn't planning to retire for AT LEAST 6-8 more years -- I was tenured but that means nothing if your college runs into financial problems, as mine did during and just after COVID. Anyway, being that invested in stocks was crappy for 2022 but has been quite good this year. There was no way I was going to move my funds OUT of stock when they were down (as in, during 2022), but now I may GRADUALLY move some, e.g. in the larger fund, maybe $100k a year for 2-3 years? (I can't imagine ever getting COMPELTELY out of stocks, although once my house is paid off -- which should be in the next 5 years at the longest, hopefully 3-4 years -- my needs will be quite modest and would likely be 100% covered by Social Security (which it looks like I won't take until 2025, unless things get weird -- at that point it will be close to $3,000/month for me).
Mathjak and all, any thoughts on the GRADUAL readjustment of funds?
i would read about the red zone , i posted an excerpt and a link to the whole article
what i do is run a different portfolio based on when i need the money
so basically 2 years cash , then a very conservative income model for more shorter term money and that is 25% equities but with conservative equity funds .
then an intermediate term 60/40 with more aggressive funds as equity funds nd a 100% equity model for eating two to 3 decades from now .
there are all different equity funds so as an example fidelity equity income is nothing like fidelity blue chip growth or an ark fund
EXECUTIVE SUMMARY
The final decade leading up to retirement, and the first decade of retirement itself, form a retirement danger zone, where the size of ongoing contributions and the benefits of continuing to work are dwarfed by the returns of the portfolio itself. As a result of this “portfolio size effect”, the portfolio becomes almost entirely dependent on getting a favorable sequence of returns to carry through.
And because the consequences of a bear market can be so severe when the portfolio’s value is at its peak, it becomes necessary to dampen down the volatility of the portfolio to navigate the danger – a strategy commonly implemented by many lifecycle and target date funds, which use a decreasing equity glidepath that drifts equity exposure lower each year.
Yet the reality is that the retirement danger zone is still limited – after the first decade, good returns will have already carried the retiree past the point of danger, and bad returns at least mean that good returns are likely coming soon, as valuation normalizes and the market cycle takes over. Which means while it’s necessary to be conservative to defend against the portfolio size effect, it’s not necessary to reduce equity exposure indefinitely.
Instead, the optimal glidepath for asset allocation appears to be a V-shaped equity exposure, that starts out high in the early working years, gets lower as retirement approaches, and then rebuilds again through the first half of retirement. Or viewed another way, the prospective retiree builds a reserve of bonds in the final decade leading up to retirement, and then spends down that bond reserve in the early years of retirement itself (allowing equity exposure to return to normal).
Ultimately, further research is necessary to determine the exact ideal shape of this “bond tent” (named for the shape of the bond allocation as it rises leading up to retirement and then falls thereafter). But the point remains that perhaps the best way to manage sequence of return risk in the years leading up to retirement and thereafter is simply to build up and then use a reserve of bonds to weather the storm.
Last edited by mathjak107; 12-24-2023 at 11:19 AM..
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