Posted on 01/02/2020 1:20:44 PM PST by SeekAndFind
“feeling that a correction is coming soon”
For years I had that feeling and was ultra-cautious — invested way too much in fixed income when I was young, moved too much money out of equities in the big downturns, and got back into equities way too late.
It took me a lot of years to realize I couldn’t time the market and I just had to ride through the waves. The stats on how poor your returns get if you miss the upticks from the bottoms are sobering.
It takes a lot of steely nerves to ride through the downturns, especially when you retire.
Retirement is largely a crapshoot in that, if you retire at the start of a serious bear market, you are screwed. Conversely, if you retire during a bull market, you are made. So much of your retirement situation depends on how well the markets do during your first two or three years of retirement.
We believe in what Trump is doing and actually just increased our retirement equity exposure from the mid 30% range to the mid 40% range a month ago.
The stock market has gone up about 7% a year over the last 48 years. The median income has gone up about 4%. Of course the unit price has gone up.
I’m 60 this year and this is my allocation:
Fixed Income
- 20% Domestic
- 15% International
Equity
- 10% Large Cap Growth
- 20% Large Cap Value
- 15% Small / Mid Cap
- 20% International Equity
I purchase 3 ETFs for each, putting 50% in the best performing ETF from the previous year and 25% in each of the other two ETFs which ranked somewhere around mid pack.
So as an example, if your portfolio is $100,000, then you would invest $20,000 by buying 3 Domestic Fixed Income ETFs, the first one would be $10k and the other two would be $5k each - - wash, rinse and repeat...
I started off timid but got agressive the last 5 months...ended up with 24%!
I agree, I am ten years into retirement and I just last month readjusted from 60 40 to 50 50 as Trump’s first three years ran the stock market side up quite a bit.
I actually expect 5 more years of good market because the trade balance will be signed and the deal with Canada and Mexico and soon Britain will enhance business around the world, Will even be good for China.
Now we still have to be a bit concerned about international relations.
Yes, don’t push your luck, but at 50 50 your portfolio is balanced and the market must always be part of your strategy.
“And this headline puts this in a negative light WHY???”
To distract you and like-minded others that despite the great stock market, how many people still have to work more than 4 months to just pay their federal and state income taxes, and property taxes?
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.