How is your portfolio balanced?

[mnhtnbb]

I'm 68. Widowed. Sold the family house (which we owned outright) last December. Caught the market at a correction and rode the ticker up for the last 7 months.

But I decided last week to book some profits and take some money off the table. Wouldn't be surprised to see the Fed cut interest rates next week. I'm concerned about just how much higher this market can go given the underlying economic conditions and decided it might be time to focus a bit more on preserving capital, given my age.

So I decided to rebalance my portfolio. Holding a sizable position in cash--about 15% of my total assets--but reconfigured the invested portion to reflect 55% in fixed income, 43% in equities, and 2% in gold. My longest fixed income instrument matures in 2024.

How about you? Have you made any recent changes? What? Why? Or are you holding steady?

Care to comment?

[elleng]

1. Wish I could answer,

mine's professionally managed.

IF I could find the docs (not likely,) I'd give you more info. I signed onto 'low risk.'

[mnhtnbb]

2. Hmm...

investing has been a minor hobby of mine for years. Really 35 years.

The rebalancing that I just did was designed to moderate my risk, but I wouldn't consider where it is now "low risk".

[A HERETIC I AM]

8. Your managers should be able to give you a snapshot just about any time

These days it’s highly likely they have a way to access your balances online, but at the very least they could print you out a summary with a few keystrokes on their computer

[elleng]

9. I'm sure they can.

[cilla4progress]

3. Thanks for your post.

Haven't made any recent changes. But appreciate your info, made notes, and will go check my balances now.

Spouse and I are 64. He is retiring next year from full time employment. He will receive a nice, solid state pension + SS. I will continue to work part-time in self-employment. No mortgage, but some consumer debt we are trying to pay off first.

Thanks!

[mnhtnbb]

5. One of the reasons I decided to take some profits

was that I recently considered buying a condo. Currently I'm renting. Love my apartment. Love the fact that when the a/c died on me the other night (yes 8 pm at night) the management had a guy up here to fix it within an hour. The capacitor on the heat pump had gone out--which they do--given the stress it's had with all our 90+ degree weather.

But I am paying a lot in rent. I figured out if I bought a condo--instead of continuing to rent here-- that I could probably build about $40-50,000. in equity just by reducing the loan balance that much during 10 years, without factoring in any appreciation. That would be a nice chunk of change to add to my boys' inheritance.

On the other hand, there is something to be said for not having to worry about maintenance! And the a/c going out really brought that home.

After my husband died I applied for widow's SS benefits and the survivor's benefit of his VA pension. Makes a nice monthly income. I have set up my portfolio to generate additional income so that I'm living comfortably.

When I decided to sell some of the equities, I focused on the ones that were yielding less than 3% so I wouldn't be cutting the income from them by too much when the assets were converted to fixed income instruments.

[FBaggins]

4. Seems appropriate for your situation

I'm more heavily weighted toward equities, but I don't pay attention to shorter-term market fluctuations and have a consistent history of riding out market downturns without selling. The only part of the portfolio that is shorter term.. are the funds needed for college tuition over the next few years.

If you want to play the market-timing game and focus on the Fed's actions... I've recently read that Fed cuts that are driven not by economic weakness, but instead by trying to extend the cycle (as appears to be the case now)... usually result in another 20-30% before a market top. Having said that... 15% in cash doesn't seem like jumping the gun. Especially when the reasonably-liquid end of the fixed-income market isn't paying remarkably more than your money market account probably is.

[mnhtnbb]

6. One of the reasons I decided to

reduce my exposure to equities was so I could not worry about leaving them alone during a market downturn. I do not own a stock that doesn't pay a dividend and the ones that are left all yield > 3%. As long as the Republicans don't reduce my SS or pension payments, I should be fine now to ride out a downturn that could last several years.

[FBaggins]

7. Sounds like you're in just the right place

Thumbs up from me (worth exactly what you paid for it of course).

[bif]

10. I'm 64 and...

About 80% of my money is in Mutual Funds. Spread out among four different ones-Large Cap, Small Cap, Aggressive Growth, and an Overseas Fund. Haven't touched them in years and they just keep going up every year. (Best and only good financial advice my dad ever gave me.) The rest is in a 401k. I just play around with the stock market. Unbelievably, I've turned 20 grand into $185,000! I can afford to lose it all and still be okay.

[PoindexterOglethorpe]

11. I can't tell you my exact percentages,

All of my investments are in funds, and I have a money manager who has done very well for me.

I have a Roth IRA, an IRA that's a rollover from a 403b plan, and a separate set of funds that are straightforward investments. The approximate percentages are 6%, 31%, and 63% respectively. Just glancing at the holdings, I'd say I'm about 60% equity, 40% bonds.

I'm 70 years old, and my income derives from Social Security, a very small pension, and income from two annuities my financial guy got me into a few years back, plus income from those investments. I actually have a higher income than I've ever had, which feels quite nice.

No matter how old you are you should have some of your investments in equities. You need the growth. Periodically people here say they're nervous about the future and sell all of their investments, which is a very bad idea. Taking some profits can make a lot of sense, but you need to do a bit of research on how time in the market is vastly better than trying to time the market.

Buying stocks that have a good history of paying dividends, and using those dividends as income can make a lot of sense. Again, you'd need to do research.

And keep in mind, that while stocks periodically reach new highs, they never reach new lows. And yesterday's rate cut made the Dow drop a bit more than 300 points. Right now, today, it's recovered much of that.

[PoindexterOglethorpe]

12. I now see that the Dow is currently down

about 230 points from yesterday's close.

Not real a big deal.

[progree]

14. OMG! I didn't know that! It's down even more now: 277. It's the beginning of the GREAT CRASH

that I've been predicting since 2011. Its a casino, I tell you!!!!

(When the market is up, "it's a bubble!", when the market is down, "See, I told you so" )

[PoindexterOglethorpe]

15. YES! YES! YES!

SELL EVERYTHING!

It's down almost 1% from yesterday, which was down a bit over 1% from the day before. Yep, clearly a crash. According to a lot of people here those kinds of declines indicate a Crash of 1929 proportions.

[A HERETIC I AM]

18. You are quoting the repeated lamentations of the daily "Stock Market Watch" thread.

The running theme there for years has been exactly that - when it's up it's a bubble, when it's down, well...that's what is supposed to happen.

Oh...and if on a down day, there is a sudden turnaround, well then by god, it's the nefarious and mysterious "Plunge Protection Team" at work!

[progree]

19. Oh darn, I forgot the Plunge Protection Team. They didn't seem to be on duty today

Some reporter asked Trump today about the 1% drop in the Dow in the wake of the new tariffs on China. He said something about once people understand it, they will be happy about it or something like that.

I thought the PPT would push the Dow up in the wake of the tariffs announcement to make Trump look good.

[progree]

21. "not lookin' too good right now I'm sure the PPT will come along to bail 'em out . . . . "

Just saw this posted over there. By someone who won't be any surprise to you.

I thought the usual "logic" is that whenever the stock market goes down, it's Trump's buddies selling short. (Trouble is, selling short means borrowing shares and selling them, but then one has to buy the shares back later on the market so as to give the shares back to the lender -- doesn't work if the buy back price exceeds the selling price + fees. And downside risk is infinite.

"He who sells what isn't his'n, must pay up or go to prison" -- Wall Street Week

[A HERETIC I AM]

22. LOL!

As Chris Rock said;

“That Train’s never late!”

2.9%. It’s down less than three percent and the sky is apparently falling.

Yeah... love the “selling short” comment on the other thread.

It never seems to be noted that the Dow and S&P are basically flat for the last year

[progree]

23. Is it time to declare The Death Of Equities?

"The Death Of Equities" - Business Week's August 13, 1979 cover story. (Only 3 years later the U.S. stock market began its ascent from a Dow of 777 to whatever it is now ... 778? LOL. And just looking at the gain in the index leaves out dividends entirely, and more importantly, reinvested dividends.

https://web.archive.org/web/20090313020927/http://www.businessweek.com/investor/content/mar2009/pi20090310_263462.htm

[A HERETIC I AM]

24. Any day now!

[progree]

25. Odd posting at SMW today on a day when Dow up 371 (1.43%) and S&P 500 up 1.88%

and that followed 2 days where they both went up about 1.2% (both days combined)



The "Death of Equities" I guess.

But at least no:

[progree]

13. Liquid assets: 84% equities, 16% bonds and cash.

In my liquid assets my equities are 83.6%, while my cash (1.3%) and bonds (15.1%) total 16.4%

The main reason for the bonds position is for if the S&P 500 drops 30% from peak-to-trough, I will sell all my bonds and buy equities.

Virtually all my equities (and all my bonds) are in mutual index funds and ETFs (I only have one indivdual stock that I inherited and haven't sold yet - I don't want to pay the capital gains and it is a utility stock (Sempra).

At my 67 age, my bonds (and cash) are supposed to be my age (67%) or another formula is "your bonds = your age minus 10", which comes to 57% bonds.

However, not included in the above are my non-liquid assets which are all non-equity --

* A charitable gift annuity from Population Connection that pays nearly $21,000/year (there are no inflation adjusments)

* Social Security which I'm collecting, maybe $20,000/year (before reduction by the Medicare Part B premium). This increases with inflation.

* A paid-off townhouse (though I value it at only $70,000 because it needs extensive work)

* Unfortunately, no pension (I took it as a lump sum and invested it)

Anyway, my reasoning for stocks is splattered all over the recent "How Different Generations Think About Investing" https://www.democraticunderground.com/11211641
so I won't repeat all that here.

[PoindexterOglethorpe]

16. The problem with the notion that

bonds ought to be your age, is that once you get over 70 you simply don't have enough potential growth with equities. Especially if you live to be over 90, which more people will than they realize.

[progree]

17. I agree. That's why I don't follow the conventional wisdom. I wish the damned interest rates

weren't so pathetically low, I'd gladly get more bonds.

[mnhtnbb]

20. I am very happy I made the changes to rebalance my portfolio

given the market today. In fact, my IRA is actually up a few $$ in spite of the DJIA being down over 550 points.

I'm definitely going to be sleeping better for probably the next year. Very happy I took some profits, reduced the allocation towards equities, and upped the percentage of fixed income instruments. And if/when we see a bottom, I will have some cash to go bargain hunting.

Of course, we could all be blown up by that orange sack of $hit before the next election.

[virgogal]

26. What portfolio?

[AJT]

27. Since I have no idea what I am doing...

I am 61and my IRA is 60% bonds 40% in the market.
I have some cash in savings(which I consider an emergency fund for house repairs, etc.)and live on SS survivor benefits(I'm a widow)and a small pension. I outright own a home currently valued at $350,000. I have no debt. My biggest monthly output is for medical insurance. I would like to learn more about managing my money, if anyone has any suggestions I'd appreciate it.

[question everything]

28. Ours are only stock and bonds funds in our IRA accounts

Have been taking our monthly RMDs from stock because, well, stock funds have been going up.

For August will probably go to the bond funds.