Gravy train ride over ? Time to reevaluate asset allocation

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Jimsad
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Gravy train ride over ? Time to reevaluate asset allocation

Post by Jimsad »

Hi
I feel that the the huge returns we have been enjoying last 10 years will be ending .
Is it time to reassess one’s asset allocation?
I was 60/40 and let it drift to 75/25 due to greed and to take advantage of the roaring market .
But now am planning to dial down back to my target 60/40

I feel that especially those who have been investing <10 years and are 100% stocks may have a rude awakening and realize they do not have the stomach for 100% stocks ;this happened to me in 2008 when I went through the crash
Nathan Drake
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Re: Gravy train ride over ? Time to reevaluate asset allocation

Post by Nathan Drake »

Nobody knows

I am 100% stocks and am comfortable in that position because it is highly diversified

Short term corrections don’t bother me. What we experienced the last week is literally nothing alarming, but I guess a year and a half of almost non stop returns distorts our perception of risk

10% corrections are normal and happen most years, without them there would be no returns
20% VOO | 20% VXUS | 20% AVUV | 20% AVDV | 20% AVES
260chrisb
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Re: Gravy train ride over ? Time to reevaluate asset allocation

Post by 260chrisb »

You'll never (as you already know) be able to predict the market accurately. Adjust your asset allocation to a level you can live and sleep at night with.
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Portfolio7
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Re: Gravy train ride over ? Time to reevaluate asset allocation

Post by Portfolio7 »

Greed makes a poor IPS.

I'm not entirely averse to the idea of adjusting your AA if your willingness to take risk has changed. Many people shift their AA as they age, or as their financial conditions change. However, you're talking about timing the market. This is a particularly difficult thing to do. If you knew how to do it, you wouldn't be asking that question, and certainly not on a Bogleheads forum. It's kind like getting married. You either have confidence in the decision... or else it's a really, really bad idea.
"An investment in knowledge pays the best interest" - Benjamin Franklin
delamer
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Re: Gravy train ride over ? Time to reevaluate asset allocation

Post by delamer »

You only change your allocation when you think the stock market won’t continue to perform well?

Then you aren’t rebalancing, you are market timing.
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. - Alexandre Dumas, fils
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Jimsad
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Re: Gravy train ride over ? Time to reevaluate asset allocation

Post by Jimsad »

I let my portfolio drift and become more aggressive due to greed and complacency
But today I remembered again 2008 when I felt like I was throwing my money in to a furnace or a bottomless pit .
delamer
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Re: Gravy train ride over ? Time to reevaluate asset allocation

Post by delamer »

Jimsad wrote: Fri Dec 03, 2021 4:02 pm I let my portfolio drift and become more aggressive due to greed and complacency
But today I remembered again 2008 when I felt like I was throwing my money in to a furnace or a bottomless pit .
Then make a change.

But you seem to imply that others on this forum have made the same mistakes (greed and complacency). And that isn’t necessarily (or even likely to be) true.
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. - Alexandre Dumas, fils
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HomerJ
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Re: Gravy train ride over ? Time to reevaluate asset allocation

Post by HomerJ »

Jimsad wrote: Fri Dec 03, 2021 3:48 pm Hi
I feel that the the huge returns we have been enjoying last 10 years will be ending .
Is it time to reassess one’s asset allocation?
I was 60/40 and let it drift to 75/25 due to greed and to take advantage of the roaring market .
But now am planning to dial down back to my target 60/40

I feel that especially those who have been investing <10 years and are 100% stocks may have a rude awakening and realize they do not have the stomach for 100% stocks ;this happened to me in 2008 when I went through the crash
Don't change your AA based on what you think the market will do next. Pick a long-term AA that you can hold through all markets. Change it when your personal situation changes (which could correlate with a market run-up, it's true - like you could hit your number).

But no one should be changing their AA today because they THINK the "gravy train" is over.

One should ALWAYS be prepared for a market crash that starts tomorrow. Because it might. This is always true.

At least you let it drift I guess, instead of actually changing it back in the day. Letting it drift back down isn't terrible either.

If you are closer to retirement, and you've made enough over the past 10 years to hit your number, you could go more conservative at this point, since you may no longer have the "long-term" until retirement. But you should have been thinking about that last month and last year, not just because the market has gone down a bit in the past week.
"The best tools available to us are shovels, not scalpels. Don't get carried away." - vanBogle59
exodusNH
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Re: Gravy train ride over ? Time to reevaluate asset allocation

Post by exodusNH »

Jimsad wrote: Fri Dec 03, 2021 3:48 pm Hi
I feel that the the huge returns we have been enjoying last 10 years will be ending .
Is it time to reassess one’s asset allocation?
I was 60/40 and let it drift to 75/25 due to greed and to take advantage of the roaring market .
But now am planning to dial down back to my target 60/40

I feel that especially those who have been investing <10 years and are 100% stocks may have a rude awakening and realize they do not have the stomach for 100% stocks ;this happened to me in 2008 when I went through the crash
Is this how you felt in September, when the market was at this level and also down from what was the peak? Why didn't you make the change then? What's different now?
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Watty
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Re: Gravy train ride over ? Time to reevaluate asset allocation

Post by Watty »

Jimsad wrote: Fri Dec 03, 2021 4:02 pm I let my portfolio drift and become more aggressive due to greed and complacency
But today I remembered again 2008 when I felt like I was throwing my money in to a furnace or a bottomless pit .
You are also 13 years older and likely closer to retirement, or farther into retirement.

Depending on how old you are you may have use up a lot of your "human capital"(ie future earnings potential) in the last 13 years.

I would suggest trying to ignore the past and your current asset allocation and pretend that you have a blank slate and you need to figure out what asset allocation you should have now and what it should be in the future too. Once you know that you can look at your current asset allocation and then decide how to get to what you want to have.

There is nothing magically right about it but as a starting point you could look at what asset allocation a target date fund has that matches your expected retirement date.
Topic Author
Jimsad
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Re: Gravy train ride over ? Time to reevaluate asset allocation

Post by Jimsad »

delamer wrote: Fri Dec 03, 2021 4:09 pm
Jimsad wrote: Fri Dec 03, 2021 4:02 pm I let my portfolio drift and become more aggressive due to greed and complacency
But today I remembered again 2008 when I felt like I was throwing my money in to a furnace or a bottomless pit .
Then make a change.

But you seem to imply that others on this forum have made the same mistakes (greed and complacency). And that isn’t necessarily (or even likely to be) true.
I am not sure why you thought I was implying others are greedy .
I am trying to warn myself and also others to be more vigilant
Topic Author
Jimsad
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Re: Gravy train ride over ? Time to reevaluate asset allocation

Post by Jimsad »

Jimsad wrote: Fri Dec 03, 2021 4:18 pm
delamer wrote: Fri Dec 03, 2021 4:09 pm
Jimsad wrote: Fri Dec 03, 2021 4:02 pm I let my portfolio drift and become more aggressive due to greed and complacency
But today I remembered again 2008 when I felt like I was throwing my money in to a furnace or a bottomless pit .
Then make a change.

But you seem to imply that others on this forum have made the same mistakes (greed and complacency). And that isn’t necessarily (or even likely to be) true.
I am not sure why you thought I was implying others are greedy .
I am trying to warn myself and also others to be more vigilant
What I am guilty of doing is not rebalancing due to greed of higher returns but trying to get myself back into line now and remembering how I felt in 2008
Misenplace
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Re: Gravy train ride over ? Time to reevaluate asset allocation

Post by Misenplace »

This thread is now in the Personal Investments forum (personal asset allocation).
Jimsad, maybe you would like to post some more details to get better input on your own situation and make it actionable?

There is also the classic thread Subject: A time to EVALUATE your jitters
surfstar
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Re: Gravy train ride over ? Time to reevaluate asset allocation

Post by surfstar »

OP seems all over the place with posts - bought Rivian, Bonds are concerning, etc...

If a 4% drop from ATH is causing you to "reevaluate"... good, I guess?

I'll remain greedy if people are getting fearful :D
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Beensabu
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Re: Gravy train ride over ? Time to reevaluate asset allocation

Post by Beensabu »

Jimsad wrote: Fri Dec 03, 2021 3:48 pm I was 60/40 and let it drift to 75/25...
But now am planning to dial down back to my target 60/40
You don't need to say anything else but this. That's a decent amount of drift. You sure made some money. Good for you.

Do your thing.
"The only thing that makes life possible is permanent, intolerable uncertainty; not knowing what comes next." ~Ursula LeGuin
delamer
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Re: Gravy train ride over ? Time to reevaluate asset allocation

Post by delamer »

Jimsad wrote: Fri Dec 03, 2021 4:18 pm
delamer wrote: Fri Dec 03, 2021 4:09 pm
Jimsad wrote: Fri Dec 03, 2021 4:02 pm I let my portfolio drift and become more aggressive due to greed and complacency
But today I remembered again 2008 when I felt like I was throwing my money in to a furnace or a bottomless pit .
Then make a change.

But you seem to imply that others on this forum have made the same mistakes (greed and complacency). And that isn’t necessarily (or even likely to be) true.
I am not sure why you thought I was implying others are greedy .
I am trying to warn myself and also others to be more vigilant
I can only give you my interpretation of your comments.

As one of the moderators asked above, what question did you have?
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. - Alexandre Dumas, fils
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FlatSix
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Re: Gravy train ride over ? Time to reevaluate asset allocation

Post by FlatSix »

Jimsad wrote: Fri Dec 03, 2021 3:48 pm I feel that the the huge returns we have been enjoying last 10 years will be ending
So the market drops 5% and now you are shook? Sure, certainly a good time for You to re-evaluate Your risk tolerance. Curious what you did in Spring 2020?
Vtsax100
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Re: Gravy train ride over ? Time to reevaluate asset allocation

Post by Vtsax100 »

Jimsad wrote: Fri Dec 03, 2021 4:18 pm
delamer wrote: Fri Dec 03, 2021 4:09 pm
Jimsad wrote: Fri Dec 03, 2021 4:02 pm I let my portfolio drift and become more aggressive due to greed and complacency
But today I remembered again 2008 when I felt like I was throwing my money in to a furnace or a bottomless pit .
Then make a change.

But you seem to imply that others on this forum have made the same mistakes (greed and complacency). And that isn’t necessarily (or even likely to be) true.
I am not sure why you thought I was implying others are greedy .
I am trying to warn myself and also others to be more vigilant
Be more vigilant? So change our AA? Or just rebalance?
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climber2020
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Re: Gravy train ride over ? Time to reevaluate asset allocation

Post by climber2020 »

Jimsad wrote: Fri Dec 03, 2021 3:48 pm Hi
I feel that the the huge returns we have been enjoying last 10 years will be ending .
It already ended. In March 2020.
It'll end again at some indeterminate point in the future.
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Kenkat
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Re: Gravy train ride over ? Time to reevaluate asset allocation

Post by Kenkat »

You had a 60/40 allocation and you got a little bit inattentive and yes, it didn’t hurt that the market kept going up. So, yes, rebalance back to your original allocation. You don’t have to make any predictions about the future state of the market. It worked out. Great. It may or may not in the future. There’s no way to know which way it will be. You know what you need to do.
000
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Re: Gravy train ride over ? Time to reevaluate asset allocation

Post by 000 »

Still time for one more stop at the turkey station I think, but yeah, this gravy train may very well veer off the tracks soon.
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Jimsad
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Re: Gravy train ride over ? Time to reevaluate asset allocation

Post by Jimsad »

calvin+hobbes wrote: Fri Dec 03, 2021 5:06 pm
Jimsad wrote: Fri Dec 03, 2021 3:48 pm I feel that the the huge returns we have been enjoying last 10 years will be ending
So the market drops 5% and now you are shook? Sure, certainly a good time for You to re-evaluate Your risk tolerance. Curious what you did in Spring 2020?
Bought more stocks in spring 2020
But feel it will be different going forward .
Not sure why - higher inflation , new COvid law of averages catching up ? Just a bad feeling
Topic Author
Jimsad
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Re: Gravy train ride over ? Time to reevaluate asset allocation

Post by Jimsad »

Jimsad wrote: Fri Dec 03, 2021 5:43 pm
calvin+hobbes wrote: Fri Dec 03, 2021 5:06 pm
Jimsad wrote: Fri Dec 03, 2021 3:48 pm I feel that the the huge returns we have been enjoying last 10 years will be ending
So the market drops 5% and now you are shook? Sure, certainly a good time for You to re-evaluate Your risk tolerance. Curious what you did in Spring 2020?
Bought more stocks in spring 2020
But feel it will be different going forward .
Not sure why - higher inflation , new COvid stain, law of averages catching up ? Just a bad feeling
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Wiggums
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Re: Gravy train ride over ? Time to reevaluate asset allocation

Post by Wiggums »

I reduced my AA in retirement. You are adjusting stock/bond allocation, because it drifted higher. Nothing wrong with those scenarios. I only rebalance once a year. I personally don’t make changes outside of the annual rebalance unless the drift is extreme. Then I might adjust with new money.
"I started with nothing and I still have most of it left."
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Jimsad
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Re: Gravy train ride over ? Time to reevaluate asset allocation

Post by Jimsad »

delamer wrote: Fri Dec 03, 2021 4:53 pm
Jimsad wrote: Fri Dec 03, 2021 4:18 pm
delamer wrote: Fri Dec 03, 2021 4:09 pm
Jimsad wrote: Fri Dec 03, 2021 4:02 pm I let my portfolio drift and become more aggressive due to greed and complacency
But today I remembered again 2008 when I felt like I was throwing my money in to a furnace or a bottomless pit .
Then make a change.

But you seem to imply that others on this forum have made the same mistakes (greed and complacency). And that isn’t necessarily (or even likely to be) true.
I am not sure why you thought I was implying others are greedy .
I am trying to warn myself and also others to be more vigilant
I can only give you my interpretation of your comments.

As one of the moderators asked above, what question did you have?
My question is how many others feel the way ?
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Jimsad
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Re: Gravy train ride over ? Time to reevaluate asset allocation

Post by Jimsad »

Jimsad wrote: Fri Dec 03, 2021 5:45 pm
delamer wrote: Fri Dec 03, 2021 4:53 pm
Jimsad wrote: Fri Dec 03, 2021 4:18 pm
delamer wrote: Fri Dec 03, 2021 4:09 pm
Jimsad wrote: Fri Dec 03, 2021 4:02 pm I let my portfolio drift and become more aggressive due to greed and complacency
But today I remembered again 2008 when I felt like I was throwing my money in to a furnace or a bottomless pit .
Then make a change.

But you seem to imply that others on this forum have made the same mistakes (greed and complacency). And that isn’t necessarily (or even likely to be) true.
I am not sure why you thought I was implying others are greedy .
I am trying to warn myself and also others to be more vigilant
I can only give you my interpretation of your comments.

As one of the moderators asked above, what question did you have?
My question is how many others feel the same way I do?
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HomerJ
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Re: Gravy train ride over ? Time to reevaluate asset allocation

Post by HomerJ »

000 wrote: Fri Dec 03, 2021 5:42 pm Still time for one more stop at the turkey station I think, but yeah, this gravy train may very well veer off the tracks soon.
And then it will start up again.

Investing is long-term. No one should fear the crashes. It's part of investing.

The long-term 9%-10% nominal return of the stock market INCLUDES the crashes.

The only trick is picking an AA that you can hold long-term. If you're young, that still might be 100/0 or 90/10. If you're closer to retirement, some of your money is short-term money, and not long-term money, so you should go more conservative.
"The best tools available to us are shovels, not scalpels. Don't get carried away." - vanBogle59
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HomerJ
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Re: Gravy train ride over ? Time to reevaluate asset allocation

Post by HomerJ »

Jimsad wrote: Fri Dec 03, 2021 5:45 pm My question is how many others feel the way ?
Lots of people may feel the gravy train is over. But lots of people felt that way in 2011, 2012, 2013, 2014, 2015, 2016, well, you get the picture.

You shouldn't act on your feelings on whether or not the gravy train ride is over.

BECAUSE YOU DON'T KNOW. None of us do.

So dial back to 60/40 and stay there.
"The best tools available to us are shovels, not scalpels. Don't get carried away." - vanBogle59
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Jimsad
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Re: Gravy train ride over ? Time to reevaluate asset allocation

Post by Jimsad »

Vtsax100 wrote: Fri Dec 03, 2021 5:25 pm
Jimsad wrote: Fri Dec 03, 2021 4:18 pm
delamer wrote: Fri Dec 03, 2021 4:09 pm
Jimsad wrote: Fri Dec 03, 2021 4:02 pm I let my portfolio drift and become more aggressive due to greed and complacency
But today I remembered again 2008 when I felt like I was throwing my money in to a furnace or a bottomless pit .
Then make a change.

But you seem to imply that others on this forum have made the same mistakes (greed and complacency). And that isn’t necessarily (or even likely to be) true.
I am not sure why you thought I was implying others are greedy .
I am trying to warn myself and also others to be more vigilant
Be more vigilant? So change our AA? Or just rebalance?
I will try to rebalance with new money going more on fixed income side
000
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Re: Gravy train ride over ? Time to reevaluate asset allocation

Post by 000 »

HomerJ wrote: Fri Dec 03, 2021 5:46 pm And then it will start up again.
It may or may not; or the crash may be so deep many may not live to see full recovery.
Investing is long-term. No one should fear the crashes. It's part of investing.
Fearing the crashes is why there's a risk premium at all.
The long-term 9%-10% nominal return of the stock market INCLUDES the crashes.
Only in a handful of geographies and only over the last century.
The only trick is picking an AA that you can hold long-term. If you're young, that still might be 100/0 or 90/10. If you're closer to retirement, some of your money is short-term money, and not long-term money, so you should go more conservative.
I'm not sure it's a good idea for anyone to be 100% stocks.
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HomerJ
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Re: Gravy train ride over ? Time to reevaluate asset allocation

Post by HomerJ »

000 wrote: Fri Dec 03, 2021 5:50 pm
HomerJ wrote: Fri Dec 03, 2021 5:46 pm And then it will start up again.
It may or may not; or the crash may be so deep many may not live to see full recovery.
True enough... No one knows the future... Even more reason to have a good chunk of money out of the market as you near retirement. That money may be all we get.

But, so far, the U.S. market has always come back.

Fairly likely that something that, so far, has always happened, will continue to happen.

More likely than your idea that something that, so far, has never happened in the U.S. will happen in the next 30 years.

Seems like people will continue to go to work, and make money, and spend money in the future.
"The best tools available to us are shovels, not scalpels. Don't get carried away." - vanBogle59
wrongfunds
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Re: Gravy train ride over ? Time to reevaluate asset allocation

Post by wrongfunds »

Jimsad wrote: Fri Dec 03, 2021 3:48 pm Hi
I feel that the the huge returns we have been enjoying last 10 years will be ending .
Is it time to reassess one’s asset allocation?
I was 60/40 and let it drift to 75/25 due to greed and to take advantage of the roaring market .
But now am planning to dial down back to my target 60/40

I feel that especially those who have been investing <10 years and are 100% stocks may have a rude awakening and realize they do not have the stomach for 100% stocks ;this happened to me in 2008 when I went through the crash
There was some person who was very bullish on Rivian. I wonder how that ride went?
delamer
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Re: Gravy train ride over ? Time to reevaluate asset allocation

Post by delamer »

Jimsad wrote: Fri Dec 03, 2021 5:45 pm
delamer wrote: Fri Dec 03, 2021 4:53 pm
Jimsad wrote: Fri Dec 03, 2021 4:18 pm
delamer wrote: Fri Dec 03, 2021 4:09 pm
Jimsad wrote: Fri Dec 03, 2021 4:02 pm I let my portfolio drift and become more aggressive due to greed and complacency
But today I remembered again 2008 when I felt like I was throwing my money in to a furnace or a bottomless pit .
Then make a change.

But you seem to imply that others on this forum have made the same mistakes (greed and complacency). And that isn’t necessarily (or even likely to be) true.
I am not sure why you thought I was implying others are greedy .
I am trying to warn myself and also others to be more vigilant
I can only give you my interpretation of your comments.

As one of the moderators asked above, what question did you have?
My question is how many others feel the way ?
Well, you can count me as one who does not feel the same way.

If that helps.
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. - Alexandre Dumas, fils
moneyflowin
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Re: Gravy train ride over ? Time to reevaluate asset allocation

Post by moneyflowin »

Yeah the gravy train is over, sell all your equities and go 100% Treasuries.

Is that what you wanted to hear? It sounds like you already convinced yourself
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Jimsad
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Re: Gravy train ride over ? Time to reevaluate asset allocation

Post by Jimsad »

wrongfunds wrote: Fri Dec 03, 2021 6:20 pm
Jimsad wrote: Fri Dec 03, 2021 3:48 pm Hi
I feel that the the huge returns we have been enjoying last 10 years will be ending .
Is it time to reassess one’s asset allocation?
I was 60/40 and let it drift to 75/25 due to greed and to take advantage of the roaring market .
But now am planning to dial down back to my target 60/40

I feel that especially those who have been investing <10 years and are 100% stocks may have a rude awakening and realize they do not have the stomach for 100% stocks ;this happened to me in 2008 when I went through the crash
There was some person who was very bullish on Rivian. I wonder how that ride went?
Rivian is 0.2 % of my total portfolio; part of my play money allocation - I am prepared to lose it all . Will hold it long term and see what happens
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David Jay
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Re: Gravy train ride over ? Time to reevaluate asset allocation

Post by David Jay »

Portfolio7 wrote: Fri Dec 03, 2021 3:56 pmGreed makes a poor IPS.
+1
It's not an engineering problem - Hersh Shefrin | To get the "risk premium", you really do have to take the risk - nisiprius
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arcticpineapplecorp.
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Re: Gravy train ride over ? Time to reevaluate asset allocation

Post by arcticpineapplecorp. »

Jimsad wrote: Fri Dec 03, 2021 4:02 pm I let my portfolio drift and become more aggressive due to greed and complacency
But today I remembered again 2008 when I felt like I was throwing my money in to a furnace or a bottomless pit.
It always feels that way when stocks are down to keep buying stocks that either go down further or stay down for a while, but you make more money buying stocks at lower prices than you do at higher prices. You just don't know it yet, because it takes time to materialize.

As has been said, when the market has gone up people focus on opportunity and ignore risk and when the market is down people focus on risk and ignore opportunity.

you want to know what others think, but you will lack context.

What if most say, "Stay the course"?

Is that because they have 20 years or more until they get to retirement so a short term or even protracted decline is of little consequence?

Is it because they can afford to take risk due to tenure, union backing/government job, etc that may not be relevant to you?

Is it because they have the willingness that you might not have?

Is it because they might have a need to take risk you no longer need to?

See how without the context what someone tells you is irrelevant??

So you don't need to know what others are doing.

You only need to know your need, ability and willingness to take risk:

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/

https://www.cbsnews.com/news/asset-allo ... ing-goals/

then decide what your worst tolerable loss is, assuming a market decline of 50% (using 2008-2009 numbers):

Image

Then stay the course. always be prepared for a 50% decline in stocks and set your AA to your maximum paint point regardless of fear or greed.

Also, feelings don't make for good investing behavior. You'll end up making mistakes based on feelings.
It's hard to accept the truth when the lies were exactly what you wanted to hear. Investing is simple, but not easy. Buy, hold & rebalance low cost index funds & manage taxable events. Asking Portfolio Questions | Wiki
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Beensabu
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Re: Gravy train ride over ? Time to reevaluate asset allocation

Post by Beensabu »

arcticpineapplecorp. wrote: Fri Dec 03, 2021 8:32 pm then decide what your worst tolerable loss is, assuming a market decline of 50% (using 2008-2009 numbers):

Image

Then stay the course. always be prepared for a 50% decline in stocks and set your AA to your maximum paint point regardless of fear or greed.
I like your new table. :) It's a good one.
"The only thing that makes life possible is permanent, intolerable uncertainty; not knowing what comes next." ~Ursula LeGuin
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Re: Gravy train ride over ? Time to reevaluate asset allocation

Post by tetractys »

Jimsad wrote: Fri Dec 03, 2021 3:48 pm Hi
I feel that the the huge returns we have been enjoying last 10 years will be ending .
Is it time to reassess one’s asset allocation?
I was 60/40 and let it drift to 75/25 due to greed and to take advantage of the roaring market .
But now am planning to dial down back to my target 60/40

I feel that especially those who have been investing <10 years and are 100% stocks may have a rude awakening and realize they do not have the stomach for 100% stocks ;this happened to me in 2008 when I went through the crash
I also “feel” the huge returns will end someday, it seems reasonable; but I have no idea if recovery from the pandemic will see markets rise or fall?

It certainly wouldn’t hurt to rebalance back to target. I’ve been staying close to my 60/40 target the whole time and enjoying the returns immensely!

For those 100% stock holders, best of luck.
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burritoLover
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Re: Gravy train ride over ? Time to reevaluate asset allocation

Post by burritoLover »

You need a mechanical rebalancing strategy - pick something - bands, time interval, your birthday, whatever. Stick to it. Investing by feelings is for your play money not your main portfolio.
dcabler
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Re: Gravy train ride over ? Time to reevaluate asset allocation

Post by dcabler »

I also went through the same gut wrench as many here on the forum did back in 2008. I learned from it and set an AA I could live with.

Multiple times since 2008 there was noise about large corrections that were about to happen. I ignored them and kept my AA and rebalancing according to my IPS. OP: Did you do likewise all along the way or did you make changes every time you thought it didn't feel like the party was going to continue? Did it work out for you? Do you have an IPS (a contract to yourself) that tells you exactly what to do?

I have only a vague inkling of what the next 10 years might look like, but the error bars are probably huge. So huge, in fact, that I see no way to act on it in any reasonable way. So.... staying the course.

Cheers.
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Jimsad
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Re: Gravy train ride over ? Time to reevaluate asset allocation

Post by Jimsad »

dcabler wrote: Sat Dec 04, 2021 6:01 am I also went through the same gut wrench as many here on the forum did back in 2008. I learned from it and set an AA I could live with.

Multiple times since 2008 there was noise about large corrections that were about to happen. I ignored them and kept my AA and rebalancing according to my IPS. OP: Did you do likewise all along the way or did you make changes every time you thought it didn't feel like the party was going to continue? Did it work out for you? Do you have an IPS (a contract to yourself) that tells you exactly what to do?

I have only a vague inkling of what the next 10 years might look like, but the error bars are probably huge. So huge, in fact, that I see no way to act on it in any reasonable way. So.... staying the course.

Cheers.
My IPS is 60/40 but sticking to it is a bit like losing weight - Easy in theory( eat less , exercise more ) but hard in practice .
But I am trying….
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Wiggums
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Re: Gravy train ride over ? Time to reevaluate asset allocation

Post by Wiggums »

Jimsad wrote: Sat Dec 04, 2021 6:10 am
dcabler wrote: Sat Dec 04, 2021 6:01 am I also went through the same gut wrench as many here on the forum did back in 2008. I learned from it and set an AA I could live with.

Multiple times since 2008 there was noise about large corrections that were about to happen. I ignored them and kept my AA and rebalancing according to my IPS. OP: Did you do likewise all along the way or did you make changes every time you thought it didn't feel like the party was going to continue? Did it work out for you? Do you have an IPS (a contract to yourself) that tells you exactly what to do?

I have only a vague inkling of what the next 10 years might look like, but the error bars are probably huge. So huge, in fact, that I see no way to act on it in any reasonable way. So.... staying the course.

Cheers.
My IPS is 60/40 but sticking to it is a bit like losing weight - Easy in theory( eat less , exercise more ) but hard in practice .
But I am trying….
Do you feel that 60/40 is still too high?
"I started with nothing and I still have most of it left."
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Jimsad
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Re: Gravy train ride over ? Time to reevaluate asset allocation

Post by Jimsad »

Wiggums wrote: Sat Dec 04, 2021 6:15 am
Jimsad wrote: Sat Dec 04, 2021 6:10 am
dcabler wrote: Sat Dec 04, 2021 6:01 am I also went through the same gut wrench as many here on the forum did back in 2008. I learned from it and set an AA I could live with.

Multiple times since 2008 there was noise about large corrections that were about to happen. I ignored them and kept my AA and rebalancing according to my IPS. OP: Did you do likewise all along the way or did you make changes every time you thought it didn't feel like the party was going to continue? Did it work out for you? Do you have an IPS (a contract to yourself) that tells you exactly what to do?

I have only a vague inkling of what the next 10 years might look like, but the error bars are probably huge. So huge, in fact, that I see no way to act on it in any reasonable way. So.... staying the course.

Cheers.
My IPS is 60/40 but sticking to it is a bit like losing weight - Easy in theory( eat less , exercise more ) but hard in practice .
But I am trying….
Do you feel that 60/40 is still too high?
I do not feel 60/40 is high . But I feel where I am - 75/25 is too high for my comfort . So need to go dial back .
Blue456
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Re: Gravy train ride over ? Time to reevaluate asset allocation

Post by Blue456 »

Jimsad wrote: Fri Dec 03, 2021 3:48 pm
I was 60/40 and let it drift to 75/25 due to greed and to take advantage of the roaring market .
But now am planning to dial down back to my target 60/40
So you were buying high and now are selling low?
Topic Author
Jimsad
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Re: Gravy train ride over ? Time to reevaluate asset allocation

Post by Jimsad »

Blue456 wrote: Sat Dec 04, 2021 6:19 am
Jimsad wrote: Fri Dec 03, 2021 3:48 pm
I was 60/40 and let it drift to 75/25 due to greed and to take advantage of the roaring market .
But now am planning to dial down back to my target 60/40
So you were buying high and now are selling low?
I will not be doing any selling of stocks . I will do it by putting my new contributions more on fixed income side
Blue456
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Re: Gravy train ride over ? Time to reevaluate asset allocation

Post by Blue456 »

Jimsad wrote: Sat Dec 04, 2021 6:24 am
Blue456 wrote: Sat Dec 04, 2021 6:19 am
Jimsad wrote: Fri Dec 03, 2021 3:48 pm
I was 60/40 and let it drift to 75/25 due to greed and to take advantage of the roaring market .
But now am planning to dial down back to my target 60/40
So you were buying high and now are selling low?
I will not be doing any selling of stocks . I will do it by putting my new contributions more on fixed income side
+1. Then if you already asking this question in here then I would definitely re-evaluate my asset allocation.
BlueCable
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Re: Gravy train ride over ? Time to reevaluate asset allocation

Post by BlueCable »

Jimsad wrote: Fri Dec 03, 2021 3:48 pm Hi
I feel that the the huge returns we have been enjoying last 10 years will be ending .
Is it time to reassess one’s asset allocation?
I was 60/40 and let it drift to 75/25 due to greed and to take advantage of the roaring market .
But now am planning to dial down back to my target 60/40

I feel that especially those who have been investing <10 years and are 100% stocks may have a rude awakening and realize they do not have the stomach for 100% stocks ;this happened to me in 2008 when I went through the crash
I came to the same conclusion in 2017!
UpperNwGuy
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Re: Gravy train ride over ? Time to reevaluate asset allocation

Post by UpperNwGuy »

Jimsad wrote: Fri Dec 03, 2021 5:45 pm My question is how many others feel the way ?
I don't feel that way.

By the way, this is what you posted exactly one week ago:
I think this is a buying opportunity
Anybody else buying ?
Why the sudden change in your thinking?
dcabler
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Location: TX

Re: Gravy train ride over ? Time to reevaluate asset allocation

Post by dcabler »

Jimsad wrote: Sat Dec 04, 2021 6:10 am
dcabler wrote: Sat Dec 04, 2021 6:01 am I also went through the same gut wrench as many here on the forum did back in 2008. I learned from it and set an AA I could live with.

Multiple times since 2008 there was noise about large corrections that were about to happen. I ignored them and kept my AA and rebalancing according to my IPS. OP: Did you do likewise all along the way or did you make changes every time you thought it didn't feel like the party was going to continue? Did it work out for you? Do you have an IPS (a contract to yourself) that tells you exactly what to do?

I have only a vague inkling of what the next 10 years might look like, but the error bars are probably huge. So huge, in fact, that I see no way to act on it in any reasonable way. So.... staying the course.

Cheers.
My IPS is 60/40 but sticking to it is a bit like losing weight - Easy in theory( eat less , exercise more ) but hard in practice .
But I am trying….
Completely understandable. Many words written here on the forum which discuss how to prevent behavioral issues. For many people, going with a 1-fund portfolio is the answer. Both Vanguard and ishares have relatively cheap options in this space with a selection of AA's to choose from. Pretty easy to set-and-forget and just plow money into them. They're not for everybody, but they suit many. Best of luck!

viewtopic.php?t=287967

Cheers.
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