I know we can "Stay the course," but.......

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Nowizard
Posts: 3388
Joined: Tue Oct 23, 2007 5:33 pm

I know we can "Stay the course," but.......

Post by Nowizard »

We are extremely fortunate. Though probably in the middle in terms of assets (assuming a fairly large standard deviation), we have "won the game" when considering our expenditures, assets, SS and a pension that meets approximately 30% or so of our expenditures. We have essentially been saving for our children with a 60/40 portfolio, changed to 47/53 with a combination of changes made in the past six months and reduction of equities by the downturn. We are 77 and 73 in age and have had difficulty moving from accumulation to preservations stages since retirement. We are down approximately $600K for the year. We are willing to seriously consider staying the course but increasingly consider whether this site has a bias among those who are primary contributors (and who I suspect have larger portfolios) for that approach either based on younger age or portfolio size. In other words, different circumstances. We have not reached a decision stage but have considered moving to a 20/80 stage with most of the "80" being in money market or just staying the course. Any comments would be greatly appreciated.

Tim
Fallible
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Joined: Fri Nov 27, 2009 4:44 pm

Re: I know we can "Stay the course," but.......

Post by Fallible »

Nowizard wrote: Wed Mar 18, 2020 6:03 pm We are extremely fortunate. Though probably in the middle in terms of assets (assuming a fairly large standard deviation), we have "won the game" when considering our expenditures, assets, SS and a pension that meets approximately 30% or so of our expenditures. We have essentially been saving for our children with a 60/40 portfolio, changed to 47/53 with a combination of changes made in the past six months and reduction of equities by the downturn. We are 77 and 73 in age and have had difficulty moving from accumulation to preservations stages since retirement. We are down approximately $600K for the year. :happy We are willing to seriously consider staying the course but increasingly consider whether this site has a bias among those who are primary contributors (and who I suspect have larger portfolios) for that approach either based on younger age or portfolio size. In other words, different circumstances. ...
The Bogleheads' "bias" - and it's a positive one (biases can be bad and good) - is to do what is right for you. You seem to have described what is right in your case, but another way to check it is to consider your ability, willingness (risk tolerance), and need to take risk, as written about by Larry Swedroe. Here are links to his three blogs:

https://www.cbsnews.com/news/asset-allo ... -you-take/
https://www.cbsnews.com/news/asset-allo ... tolerance/
https://www.cbsnews.com/news/asset-allo ... -you-need/
"Yes, investing is simple. But it is not easy, for it requires discipline, patience, steadfastness, and that most uncommon of all gifts, common sense." ~Jack Bogle
RadAudit
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Re: I know we can "Stay the course," but.......

Post by RadAudit »

Some time ago, I looked at VG Retirement Income - the final step down on their target date fund offerings. Their AA was 30 stocks / 70 bonds and that stopping point kicked in about seven years after the last date on the target date fund, IIRC. (Retire at 65 and their portfolio AA gets to 30 / 70 by 72) So, slight deviation from a proposed 20 / 80 portfolio.

After reading some of the threads about how an inherited estate probably won't make it past the grandkids or great grandkids no matter what we do, we decided to stop accumulating for those generations, too. Frankly, we started a planned spending program - dining out, cruises, etc. Then this Corona virus came along - and we can't dine out or go on cruises. (I guess we could order out from Mickey D's and have Grub Hub deliver, but, that wasn't what we really had in mind.)

I've told the kids for years not to expect anything when we're gone. Hope they listened.
FI is the best revenge. LBYM. Invest the rest. Stay the course. Die anyway. - PS: The cavalry isn't coming, kids. You are on your own.
Chip Shot
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Joined: Tue Apr 30, 2019 5:42 am

Re: I know we can "Stay the course," but.......

Post by Chip Shot »

Fallible wrote: Wed Mar 18, 2020 6:19 pm
Nowizard wrote: Wed Mar 18, 2020 6:03 pm We are extremely fortunate. Though probably in the middle in terms of assets (assuming a fairly large standard deviation), we have "won the game" when considering our expenditures, assets, SS and a pension that meets approximately 30% or so of our expenditures. We have essentially been saving for our children with a 60/40 portfolio, changed to 47/53 with a combination of changes made in the past six months and reduction of equities by the downturn. We are 77 and 73 in age and have had difficulty moving from accumulation to preservations stages since retirement. We are down approximately $600K for the year. :happy We are willing to seriously consider staying the course but increasingly consider whether this site has a bias among those who are primary contributors (and who I suspect have larger portfolios) for that approach either based on younger age or portfolio size. In other words, different circumstances. ...
The Bogleheads' "bias" - and it's a positive one (biases can be bad and good) - is to do what is right for you. You seem to have described what is right in your case, but another way to check it is to consider your ability, willingness (risk tolerance), and need to take risk, as written about by Larry Swedroe. Here are links to his three blogs:

https://www.cbsnews.com/news/asset-allo ... -you-take/
https://www.cbsnews.com/news/asset-allo ... tolerance/
https://www.cbsnews.com/news/asset-allo ... -you-need/
Thank you for posting these links. I have always wondered how people come up with their asset allocation. I kind of pulled mine out of thin air, based upon what I read was appropriate for my age, and then adjusted to be a little more conservative 45/55. Going through our current crisis, I realize that I really didnt have a need to even be that aggressive, 30/70 is probably more appropriate for my situation
BlueMoonXD
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Joined: Sat Sep 14, 2019 11:50 pm

Re: I know we can "Stay the course," but.......

Post by BlueMoonXD »

Nowizard wrote: Wed Mar 18, 2020 6:03 pm We are extremely fortunate. Though probably in the middle in terms of assets (assuming a fairly large standard deviation), we have "won the game" when considering our expenditures, assets, SS and a pension that meets approximately 30% or so of our expenditures. We have essentially been saving for our children with a 60/40 portfolio, changed to 47/53 with a combination of changes made in the past six months and reduction of equities by the downturn. We are 77 and 73 in age and have had difficulty moving from accumulation to preservations stages since retirement. We are down approximately $600K for the year. We are willing to seriously consider staying the course but increasingly consider whether this site has a bias among those who are primary contributors (and who I suspect have larger portfolios) for that approach either based on younger age or portfolio size. In other words, different circumstances. We have not reached a decision stage but have considered moving to a 20/80 stage with most of the "80" being in money market or just staying the course. Any comments would be greatly appreciated.

Tim
If the losses so far (and potential future losses) will not affect your ability to have a comfortable retirement, I don't see why you would sell now and leave your children 600k less -- they can afford to wait as long as needed for the portfolio to recover.

If this affects your retirement planning, then I would do whatever is needed to ensure that is taken care of.
carminered2019
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Re: I know we can "Stay the course," but.......

Post by carminered2019 »

What is you withdraw rate and don't forget inflation for 80% of your money sitting in MM ? I won the game at at 50 and retired but my drawdown is less 1.5% so I am not changing anything even at a negative 700K after today.
Last edited by carminered2019 on Wed Mar 18, 2020 8:06 pm, edited 1 time in total.
mary1969
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Re: I know we can "Stay the course," but.......

Post by mary1969 »

Nowizard wrote: Wed Mar 18, 2020 6:03 pm We are extremely fortunate. Though probably in the middle in terms of assets (assuming a fairly large standard deviation), we have "won the game" when considering our expenditures, assets, SS and a pension that meets approximately 30% or so of our expenditures. We have essentially been saving for our children with a 60/40 portfolio, changed to 47/53 with a combination of changes made in the past six months and reduction of equities by the downturn. We are 77 and 73 in age and have had difficulty moving from accumulation to preservations stages since retirement. We are down approximately $600K for the year. We are willing to seriously consider staying the course but increasingly consider whether this site has a bias among those who are primary contributors (and who I suspect have larger portfolios) for that approach either based on younger age or portfolio size. In other words, different circumstances. We have not reached a decision stage but have considered moving to a 20/80 stage with most of the "80" being in money market or just staying the course. Any comments would be greatly appreciated.

Tim
been a long time since i have posted. quite simply i look at the dollar amount I am willing to lose as a key point to my AA. for example, lets say i have $3 mln and i don't want to lose more than $400k. roughly speaking it comes to a 30/70 to 35/65 AA. I use laddered CD's for a good portion of my fixed income. i like to have fresh cash coming in every year for whatever opportunities present themselves. i have been buying VTI and VEU this week with recent matured CD's. No need to sell bonds although i did sell some VBMFX on Monday.
dumbttt
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Joined: Sun Jan 09, 2011 2:59 pm

Re: I know we can "Stay the course," but.......

Post by dumbttt »

I'm in my 40's and contributing, so I'm staying the course. In your case it really depends on what your children will do after they get the money.
Topic Author
Nowizard
Posts: 3388
Joined: Tue Oct 23, 2007 5:33 pm

Re: I know we can "Stay the course," but.......

Post by Nowizard »

Our children are doing fine. When I asked them this question, one said to essentially go to cash, the other to stay the course. They will not need an inheritance but would accept of course. With our RMD's and other income, we have more than we spend. We have purchased two stocks during the current downturn, for example, so our withdrawal rate is based on RMD's, minus approximately 10% of that which is reinvested. The comment about not locking in current losses sounds reasonable, but so do the ones about a 30/70 portfolio.

Tim
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