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Originally posted by mrvmax:
Yesterday was a good day so I sold off everything I had that I was positive on (as far as profit) in my 3 accounts.

I am going to wait this thing out and see what the market does, I am too close to retirement to take any big hits right now.

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Originally posted by Fly-Sig:

quote:

Originally posted by mrvmax:
Yesterday was a good day so I sold off everything I had that I was positive on (as far as profit) in my 3 accounts.

I am going to wait this thing out and see what the market does, I am too close to retirement to take any big hits right now.

If you sold just your small amount that you're trading, yeah you have to do what it takes to sleep well.

Nobody ever explained to me how different finances are when approaching and then in retirement.

If you sold everything, that's usually not a good plan, as tempting as it can be. There are only a few up days that really matter when the market switches from bear to bull, so you don't want to miss those. Plus, how does one pick the point to buy back in? When the market is down 10%? 20%? Wait until it hits a low and then is back up some specific %? What if an event changes the mood and the markets turn up for the next 5 years?

That's a Trader's mindset, fine for some of a portfolio, but high risk for a retiree portfolio. It is too easy to err, thus selling low to only buy back later at higher prices.

Nearing retirement, one's philosophy should be transitioning towards the same as being in retirement. Money that you need for normal spending for the next 3 - 5 years should be cash-like (safely earning interest). Money needed ~5+ years out should be in diversified investments, understanding that bear markets usually recover within 5 years, so those investments should ride through ok.

Sequence of returns is the big risk for new retirees. A big drop early on is harder to recover from. But you need to get the upside when it happens. Going to cash is seductive when a bear is seeming likely, but you give up any upside.

Thus the 3 - 5 year cash-like bucket. I like spending guardrails to lightly adjust spending rates depending on portfolio performance. Annual rebalancing stabilizes performance and reduces risk. I sleep well.

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so I sold off everything I had that I was positive on (

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Originally posted by Georgeair:

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so I sold off everything I had that I was positive on (

This is one of the most puzzling timing strategies I've ever seen someone describe.

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Originally posted by mrvmax:

My situation is a bit different than most, I am not worried about preserving my principle and will be drawing down as needed. I have run my numbers through different Monte Carlo simulations and used other projections just to see how different scenarios affect me. My pensions are enough to pay my bills, in 5 years SS will give me more than I need to live so 401k is just for extras. I am still working now so I am fixing up the house and replacing everything I expect will be at end of life in retirement. My house is one paid for and I have no other bills but utilities and normal living expenses.

Everything I sold I was positive on, I did not sell anything for a loss. I have a few things left that I will wait until I am profitable on before I sell. I have done abnormally well the last 6 years and although the market always recovers in the long run, I am not sure if I will be around in the long run. Yes, I could make some more gains but the risk is not worth it, I am fine with what I have now.