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Strategies & Market Trends : Young and Older Folk Portfolio -- Ignore unavailable to you. Want to Upgrade?

To: carbolady who wrote (2409)	5/8/2024 1:37:01 PM
From: mykesc2020	3 Recommendations Recommended By ddbpaso Keowee Tam3262 Respond to of 21851

"RE :We are in a fairly good position. Have been retired for about 10 years although only 63. Started transitioning our portfolio about 8 years ago to be an income producing portfolio. We have about 20% of our portfolio in cash (treasuries, CD's and Money Markets), enough for about 5 years of expenses. The rest produces income for us." This is pretty much our position as well. We are 80% equities, 20% cash, our cash is liquid tho, 5.25% HYSA and we dont have CDs or other cash instruments. I personally love the 5+ years or so expenses in cash, especially since it's actually earning decent now. That allows me to continue to also feel good about the income producing equity portfolio that currently pays our bills. "I have been handling our investments for the last 12 years and my husband has only recently, last few months, taken an interest. He feels that we should go to cash. I have spent the last 8 years building the income and do not want to go to completely cash. When DC over at SA posited that perhaps going to cash and repurchasing after a market crash I was interested in the replies but no one took him seriously. When I saw the tzandig reply here I was curious what he had to say as well as the opinions of anyone one else on this board. We have compromised so far in that we are no longer reinvesting dividends." My wife has been the same over the past decade. Not much interest, but every once in a while (driven by some sort of huge news story), pops in to have an interest. She's popped in regarding gold, bitcoin, cash, etc. over the years. At that point we sit down and I try to re-explain the DGI strategy, the nest egg, reliable increasing income no matter a stocks/or market pricing, the balance of equities and cash. Also, it's best to be buying into a down market, more shares, more income. I personally am just not a fan of market timing in that way. I market time almost ALL of my individual equity purchases based on various valuation methods...but timing the entire market? Moving in and out of the market in whole? That scares me a bit, maybe even more than a bit. The other thing for me is, buying a cash asset means the value never goes up. It might throw off good income at the moment (which is very nice) but you put in $100K, that's what you are getting back + interest. With high quality equities that pay an increasing dividend, you not only have reliable and increasing cash flow, you stand a pretty good chance there will be capital gain as well. You are not going to get a NVDA type return, but that is not needed if the DGI and cash can cover expenses. You just watch the next egg grow. Timing the market like that to me is hard. If you are not fully engaged, know what is affecting the business cycles at all moments, in all sectors, investing sentiment and a whole lot of other stuff, I think one could get hurt a bit. Not killer hurt, but certainly it could erode the overall plan of reliable and increasing income. It certainly would depart you from what you are comfortable with and throw you in a discomfort zone. I know it would me. To me, in the beginning, passive investing in good companies was an attraction. I'm not running these companies, others are. I don't have to pay attention to every detail, just passively follow the news, earning and dividends. Suppose you go all cash, lock it up for 3 years, have a nice ride for those 3 years, then all the CDs are due, rates are <1%, and the market is at an all time high? You'd be investing at prices that would give you less income based on market highs. Add to that, you do all that and 3 months later the market crashes 25%. Gives me the willies just thinking about some bad scenarios. Good luck to you and update us on your decisions if you could. One last thing: "We are in a fairly good position." If so, why tinker too much with that, let alone make a massive directional charge? PS: I love that we can bold and italicize quotes here. I always wondered why SA couldn't accommodate that. It just seems so basic and adds so much context.

To: carbolady who wrote (2409)	5/8/2024 3:01:34 PM
From: iagt	2 Recommendations Recommended By jopapgh Keowee Read Replies (1) \| Respond to of 21851

“He feels that we should go to cash. I have spent the last 8 years building the income and do not want to go to completely cash. When DC over at SA posited that perhaps going to cash and repurchasing after a market crash I was interested in the replies but no one took him seriously.” I would not recommend moving to cash and later repurchasing after a crash. That is blustering by DC. He is fishing for an argument. Importantly, doing this would be your attempting to time the market. Alternatively, I recommend checking your overall equity exposure (you mentioned having years of expenses in cash already) and looking at your asset allocation. For individual positions, check the SSD score and Chowder number to see that your future income looks reasonably secure. I checked this morning and decided to exit two positions immediately since bond rates are more attractive than the possible return on those holdings and two more that will soon go on the chopping block. Once this is done, ignore market swings by focusing on your dividend income. The market return is still positive over longer periods, declines are temporary. The bozo-DC would believe that I am saying that unrealized gains do not matter…No, they do of course. Focusing on income during market downturns is purely a psychological ploy to help me feel better about my decreasing net worth. I am sure you already know all of this and more! It seems your husband is not as experienced as you with investing, particularly in developing an income producing portfolio. Getting more information for him may alleviate some of his concerns and better align your investing goals. Be gentle with him, us guys can be knuckleheads! Ha!

To: carbolady who wrote (2409)	5/8/2024 5:58:59 PM
From: vicki kiyay	7 Recommendations Recommended By catsup ddbpaso suncoaster Tam3262 tdanzig and 2 more members Read Replies (1) \| Respond to of 21851

Whenever I hear someone contemplating going to cash, it reminds me of an SA article from 2014 -- "The Day I Sold Everything". seekingalpha.com The author was having serious FUD. He did subsequently get back in, but just think of all he would have missed out on if he had stayed in cash. Your husband doesn't have your experience with investing; he's scared about what might be coming. That's a tough situation. I'm just spitballing here, but if I were in that situation I think I'd want to address the fear, present the evidence, and find places for compromise. You both own the assets; you both need to feel comfortable with your allocations. Maybe there's a compromise possible in there about divesting from or reducing the holding of certain companies and agreeing which companies you'll definitely continue to hold. There will be impacts of going to cash; it's worth talking about that too. There are many companies that weathered the Great Recession just fine, and maybe if you subscribe to FAST Graphs you can show him the business performance of those companies at that time. And perhaps talk about market timing too, there are a lot of articles out there about the dangers of trying to time the market. I like how you have enough in cash and cash equivalents to weather a 5-year storm. That's worth talking about too.

To: carbolady who wrote (2409)	5/8/2024 6:43:06 PM
From: DoctorRicky	Respond to of 21851

Wow! That’s amazing financial planning. Good for you. I wish more women had your financial savvy.

To: carbolady who wrote (2409)	5/8/2024 7:44:24 PM
From: cemanuel	6 Recommendations Recommended By ddbpaso jritz0 Keowee suncoaster Tam3262 and 1 more member Read Replies (1) \| Respond to of 21851

I have been handling our investments for the last 12 years and my husband has only recently, last few months, taken an interest. He feels that we should go to cash. I have spent the last 8 years building the income and do not want to go to completely cash. Something I have considered doing - but have not done - is rather than reinvesting dividends let it sit as cash when the market is hot and wait for a pull back. I can also see trimming a little from some you feel are overvalued. But going to all cash IMO is not a good move. Sure, some day the market will drop 20-30%, or more. But it could be another 50% higher before that happens. And even if the market takes a hit, who's to say what you hold will do? Generally I just stay fully invested beyond my EF and enough to live on for a little while. I'm just not smart enough to figure out when the market is near its top and if it drops I doubt I'll call the bottom.

To: carbolady who wrote (2409)	5/9/2024 8:19:12 AM
From: ChillyWillie	Respond to of 21851

We are currently 23.5% in cash (not including emergency funds) down from about 35% at the peak waiting for the recession (for about a year now! and still waiting). We will probably have an additional 5% cash as I sold 5/17 $130 calls on KMB and 5/17 $75 calls on PNW (we are indifferent to owning them at this level and sold the calls). I cannot imagine going to 100% cash even in this environment of 5+% yields on MM and CDs. With respect to a recession, while I might be wrong, I am not uncertain...hence the "only 23.5% in cash. Bill

To: carbolady who wrote (2409)	5/9/2024 9:18:43 PM
From: jvincen2	9 Recommendations Recommended By cajman1 chowder Gordon Gekko 23 IncHunter Jacob Marley and 4 more members Read Replies (1) \| Respond to of 21851

That reads like you're thinking about making a choice and my view would be not really. The markets go up and down but over longer time frames head higher. I have been at this a long time now and at this point in time going to cash isn't anything I would ever consider, even when trading harder back in time now wouldn't be a go to cash move. One big reason why is when, not if, they offer a IRs cut of even .25 base points the markets are going to explode higher. Besides things like that the reality is you can follow advice from people like DC who suggest selling your investments and buying a CD or several legendary investors who have made it very clear how to succeed investing in stocks. “Don't try to time the market.” And that simple advice has been passed down often by successful investors like Benjamin Graham, Warren Buffett, Jack Bogle, and Peter Lynch through the decades. I don't see anyone from over at SA suggesting to time the markets by going to cash name in that list and make no mistake about it that is exactly what they're suggesting, do you ? One thing I learned along the way is successfully investing in stocks is a marathon race run over many years, not an annual sprint. Vince