We've recovered most of what we lost in the recent downturn. Reading the tea leaves I think we may be headed for another, longer-lived downturn. So I'm thinking now would be a good time to move to a more conservative investment position.

Our investments have been returning about 8-1/2% annually. The recent market hit took us for about a 15% ride. I'd like to not see that again. So I'm thinking move to a position that gets us more in the 6% earnings range. Not exceedingly safe, but safer.

What say the SF Investment Gurus?

Somewhere I hear JAllen talking about timing the market.

How soon do you need all of that money? How soon do you need a small portion of that money?

It sucks to look at balance numbers as they go down, but if you don't actually need to use that money it's just a temporary change "on paper," that doesn't really affect you. You don't actually take a loss, or make a gain, until you actually withdraw the funds.

quote:

Originally posted by DMF:
How soon do you need all of that money? How soon do you need a small portion of that money?

It sucks to look at balance numbers as they go down, but if you don't actually need to use that money it's just a temporary change "on paper," that doesn't really affect you. You don't actually take a loss, or make a gain, until you actually withdraw the funds.

This is true unless you are invested in the latest, going to change the world, got a million eyeballs but no income company. A lot of times those go away when things go south. Another thing to consider is the debt load of the companies you are invested in. Companies with a lighter debt load (or better yet none) are likely to be in a much better position come the next credit crunch than those that borrow to live.

quote:

Originally posted by BBMW:
Somewhere I hear JAllen talking about timing the market.

Not to derail the topic, but it says so much about JAllen that so many still carry the wisdom he shared on this forum. He is still positively impacting the world.

If you don't know what you're doing, get with a broker and check out the lifecycle type funds. You outline goals and a timetable and they shift investments for you.

quote:

Originally posted by BBMW:
Somewhere I hear JAllen talking about timing the market.

This and what DMF said.

Unless you are using all of your savings to buy something in the next six months I'd advise against moving completely conservative. That is unless you plan on dying really soon, then conservative is definitely the way to go.

Have you considered making two buckets, one for short/mid term use, and one for long term/end of life care/inheritance?

A few probabilities here:

The market will in all likelihood take you for more than a 15% ride in the next downturn.

You will earn more than you lose if you continue to invest during that downturn and remain patient.

The stock market will always create anxiety for one simple reason - other than what investments you select and the amount of $ you choose to invest, you have zero control or influence on anything that happens to your investments.

quote:

Originally posted by DMF:
How soon do you need all of that money? How soon do you need a small portion of that money?

We're withdrawing approximately 5% of the balance annually, and have been since my retirement. It's being used to supplement our SS income.

I'm 68 years old. My wife close to that. We have nobody we feel any particular need to leave it to. We just want to make sure it lasts as long as we do and maintain enough cushion for unexpectedly high emergency expenses (e.g.: catastrophic illness or injury). "As long as we do" could be until tomorrow or until twenty years from now. Numbers for life expectancy in the U.S. say 10-12 years.

In short: We don't have "decades" in which to recover from a big hit. Personally, my goal has always been for its gains to more-or-less offset what we're taking out of it.

As to this:

quote:

Originally posted by BBMW:
Somewhere I hear JAllen talking about timing the market.

There's "timing the market," then there's "gently" moving stuff around a bit based on reasonable expectations. When you see automotives laying off and closing facilities, a record seven million Americans 90 days behind in their car payments, the unemployment rate taking an unexpected hike in your state, unexpectedly poor retail sales a month ago (during the prime retail season) and other indicators of softness: I believe one is wise to consider their position.

quote:

Originally posted by Graniteguy:
... other than what investments you select and the amount of $ you choose to invest, you have zero control or influence on anything that happens to your investments.

That's rather my point.

E.g.: We have our main retirement account, into which most of my 401K was moved, and the remainder of my 401K. That remainder is very conservatively invested. In that recent downturn our main retirement account took a 15% hit almost overnight. That old 401K, which has nearly tripled in value since I moved the bulk out of it, took a couple percent hit--at the most.

Admittedly: If we'd been withdrawing the same percentage from the old 401K like we are from our main retirement account, it'd probably be about exhausted, because its earnings rate is very low. My thought it to move the main retirement account closer to where that 401K is, not to match it.

quote:

Originally posted by ensigmatic:
We're withdrawing approximately 5% of the balance annually, and have been since my retirement. It's being used to supplement our SS income.

You.might want to run a few scenarios, using a calculator like this:
https://www.calcxml.com/calcul...g-will-my-money-last

It might help you estimate what minimum rate of return is needed to make your savings last.

It's a bit frustrating because to a certain degree it's a guessing game. Your tax rate is the only variable in there you can project with any degree of certainty. Rates of return, and rate of inflation, are very hard to predict.

https://sigforum.com/eve/forums...0601935/m/6530004354

there are some good comments in this active thread on the same subject.

If you use the formula that BBMW talks about I think you would already be there at your age.

Short answer would be yes. But you do not indicate what your portfolio mix is now.
I would think if I were in your shoes I would be 40 stock funds and 60 bond type funds. Maybe even more conservative.
ymmv

JAllen also would tell you; Beware the investment advice received on any forum. No two investors have the same investment funds, risk aversion, or requirements at retirement. A Certified Financial Planner has a fiduciary responsibility to you so investment suggestions are to your benefit. Seek one out and ask questions. The answers will likely help you.

I'm not a guru but I pay Fisher Investments to be mine.

They said the December downturn was a correction. By their definitions, corrections are drops for no reason and cannot be foreseen as opposed to bear markets.

They still say we're in the final third of the current bull market. Their analysis of previous bull markets show a progression of thirds with the first third spectacularly rising out of a bear market followed by a second third of decent but moderated increase and finally a third where the biggest gains occur just before complacency sets in.

They say the fundamentals are still solid and they expect 2019 to be a continuation of the sharp V rise coming out of the correction. Still more volatile than 2017 because they say volatility is the actual norm but they expect a continued rise.

As you said you ARE retired, I think it's entirely appropriate to be in a very conservative mix. What that looks like exactly would require someone with more expertise than I. But in short, my opinion is yeah.

quote:

Originally posted by AZSigs:
JAllen also would tell you; Beware the investment advice received on any forum. No two investors have the same investment funds, risk aversion, or requirements at retirement. A Certified Financial Planner has a fiduciary responsibility to you so investment suggestions are to your benefit. Seek one out and ask questions. The answers will likely help you.

Be equally wary of financial planners who are often more interested in how they are compensated, and how much, rather than actually following through on their supposed "fiduciary responsibility," to their clients.

For fucks sake stay away from financial planners unless you are completely against doing any amount of self learning. I’m not talking Rhodes scholar research either. Just basic economics 101 stuff. If you think your financial planner knows much more than that then you are in for a rude awakening.

In the last downturn lots of my friends got furloughed. Very generically they tended to migrate to two basic jobs. Pharmaceutical sales and financial planning. Mind you, these aren’t dummies but they don’t really know much about either of those subjects. Which is my point.

You would do well to spend some tim3 reading some basics and you will do fine. Don’t chase returns and think long term. Your age factors into the risks you are willing to take. Etc etc.

Assuming you aren’t near retirement I would ask you the same thing I ask every market timer I’ve ever talked to. Ok, you indicators suggest now is the time to get on the sidelines. What indicators will you use to get back into the market? Most people can’t answer that so be prepared to get back in long after the market has turned back upwards. In other words instead of buying (dollar cost averaging) high and low in the market you will be solely buying on the upswing. That’s a rough ride.

Buy solid and keep buying and don’t let the swings worry you too much.

[/QUOTE]Be equally wary of financial planners who are often more interested in how they are compensated, and how much, rather than actually following through on their supposed "fiduciary responsibility," to their clients.[/QUOTE]

*Totally agree with this.

quote:

Originally posted by DMF:

quote:

Originally posted by AZSigs:
JAllen also would tell you; Beware the investment advice received on any forum. No two investors have the same investment funds, risk aversion, or requirements at retirement. A Certified Financial Planner has a fiduciary responsibility to you so investment suggestions are to your benefit. Seek one out and ask questions. The answers will likely help you.

Be equally wary of financial planners who are often more interested in how they are compensated, and how much, rather than actually following through on their supposed "fiduciary responsibility," to their clients.

That's why there is a difference from a Certified Financial Planner and a investment advisor/financial Planner/etc. CFP's have a fiduciary responsibility to their clients. Recommendations are based on client risk aversion and other factors during the clients' visit. I've had "investment advisers" loose hundreds of thousands of dollars in my accounts. My CFP makes his money based on my total investments. In other words he doesn't make money on each trade but on the total investment dollars at the end of the year. I grow a million dollars he makes his 1.2% on that. He has an incentive to grow my account based on my risk factors. You can find a lot more information if you go the distance and interview one. I interviewed 3 different ones to find the guy I use.

quote:

Originally posted by DMF:
How soon do you need all of that money? How soon do you need a small portion of that money?

It sucks to look at balance numbers as they go down, but if you don't actually need to use that money it's just a temporary change "on paper," that doesn't really affect you. You don't actually take a loss, or make a gain, until you actually withdraw the funds.

Of course human nature is to think about how much more you'd have if you'd sold at the top and bought at the bottom.

That is hard when "it's not where you end up. But rather the journey that matters"