When the market recovers, will you change allocations? (respect, place, income)
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I'm looking for an alternative to the bond allocation. I don't see bonds as a cushion. Yields are so low now, and once interest rates start back upwards, bond prices will drop. I invest in mutual funds, rather than stocks and bonds. I'm considering dividend growth funds (VDIGX and/or PTDGX) as an alternative to bonds. What do you think? I have sources of income for daily expenses.
I'm looking for an alternative to the bond allocation. I don't see bonds as a cushion. Yields are so low now, and once interest rates start back upwards, bond prices will drop. I invest in mutual funds, rather than stocks and bonds. I'm considering dividend growth funds (VDIGX and/or PTDGX) as an alternative to bonds. What do you think? I have sources of income for daily expenses.
Stocks are stocks dividends or not ...they are NEVER A REPLACEMENT FOR THE FIXED INCOME SIDE OF A PORTFOLIO...
Dividend stocks have been pounded just as bad ....100% of the Dow stocks and 80% of the s&p 500 pay dividends and are down just as badly.
Just look at utility darling Ppl ...it got smashed
I'll probably shift my asset allocation to 30% stocks, 70% bonds and cash in my retirement accounts when the market recovers, but that will be because I'll be close to retirement (if not actually retired), and my taxable account (which is almost as large as my retirement accounts) is 80% stocks. I'll take my equity risk in the account the government doesn't impose RMDs on.
I'm 68 years old and 100% in equities, and have been so since 1983.
But partially I can do so because I have a great federal pension.
My liquid assets have basically been 100% equities since 2008. For essentially the same reason....I tap into a very small portion of the portfolio for my yearly spending. There’s no need to reallocate or change my spending plans.
I never thought I would be lucky enough to hit another Great Recession, but here it comes. I have bonds that mature in June, CDs that mature about the same time, and bond funds that are making money hand over fist as interest rates drop. The whole wad is going into stocks. I'm hoping the market doesn't bottom until after the July quarterlies.
When I was a kid, a guy who bought a business in 1937 and ended life a very wealthy man told me, "Buy low." The Fed just added $1.5 trillion to the money supply, and might do it again. When that happens, keeping your money in money is really stupid. You don't have to hit the bottom to end up on top.
For now, I'm just sitting. I took a defensive position three years ago, so have hardly lost anything so far.
I'll probably shift my asset allocation to 30% stocks, 70% bonds and cash in my retirement accounts when the market recovers, but that will be because I'll be close to retirement (if not actually retired), and my taxable account (which is almost as large as my retirement accounts) is 80% stocks. I'll take my equity risk in the account the government doesn't impose RMDs on.
I'm IN retirement at age 61, and thank God I changed to that exact allocation back in October. Still seeing loss ATM, but not nearly as much as I would have if I had stayed 60/40.
If you are still working now, it would be a good idea to up your contributions to your retirement or other investment accounts. This is the time to be buying. You will get a lot more shares for your money now. As the market goes back up (eventually) all those extra shares will gain.
As for me, if my investment funds don't go below the amount I had when I retired 9 years ago, I will be happy. The amount I had then was the amount I needed to be able to retire. The increases in recent years were fun to watch, but it was all on paper.
Presently I'm so shell-shocked at these ghastly events, that I indulge in pornographic fascination of a Hieronymus Bosch painting of tormented souls dragging each other into hell... a world bleeding, burning, wretched in ineffable misery. I've not slept properly for a month, and dread to get a blood-pressure reading. Our local gym, which I've taken to frequenting with religious fervor, has as of today closed down... so there goes the relief of weights and treadmills.
Each day summons dread and misery anew, another leg down, another increment in free-fall, a ceaseless cavalcade of loss, of loss and loss and further erasing of what's so dear and precious and gingerly accumulated.
"When the market recovers", a different and more vigorous quiver of emotions will present itself, and what's to be decided then, can not be reckoned in the present shock. I close my eyes, and wish for the world, as Bishop Berkeley taught us, to cease and vanish. But it won't. It perseveres, wounded, fetid, gangrenous, staggering, but going nonetheless. I would that it would stumble and collapse! But no such luck.
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