Jonathan, Thank you for the quick response. "As I’ve argued before, I’m not inclined to lighten up on stocks when the market appears overheated, because there’s no limit to share prices might climb."
"When stocks soar, I sell shares to get back to my target percentage—but I would be loath to underweight stocks." I appreciate these statements, but they do have a 'qualitativeness' to them. Do you have more quantitative guidance on indicators when to begin the adjustment from 95-100% equity back to 70-80%? Also, sorry for the exclamation mark in my previous comment...what was I thinking ;).
Jonathan, Another great article! Your written words and conversational eloquence makes it so easy to absorb your messages. You have mention in previous articles and during the MiB podcast referenced in this thread that you invest more (over re-balance) during times of large market dips - dot.com, GFC, pandemic - resulting in, for example, a 95% equity weighting during the lows of the GFC. Consequently I assume, as the market bounces back, your portfolio would provide even greater gains in equity exposure. Can you discuss your strategy, timing and thought process to take your portfolio back to a more comfortable allocation level? Thanks, Andy
Tony,
Like it has been stated, one of the Boglehead tenets is setting an asset allocation that allows one to sleep at night...and of course, an investor is allowed to change their allocation if they feel compelled. Corrections (~10%), bear markets (~20%), crashes (yikes)... We don't like any of those :(, but they are the price of doing business. I'm curious what magnitude of correction you are looking for to "get back into the market." Recent down draft examples - S&P 500 down ~25% (~3600 from 4800), NASDAQ down~37% (10K from 16k). Obviously, those occurred while you were going to cash, but now what? Just curious if you have determined what magnitude of pullback and what index (or indices) will give you "the sign." Thanks.
Dick,
Reading others' financial journeys is always enlightening, which makes HumbleDollar special. But reading stories of gratitude are also welcomed. Appreciate your recognition of avoiding much of life's troubles and expressing gratitude for that bit of luck. Also btw, to jack facts and all the readers I offer a respectful correction --- Evel K attempted to jump the Snake River Canyon not the Grand Canyon.
Jesse, insightful and well-written article. I never agreed with the "over $75,000 doesn't increase happiness" conclusion.Your bringing the Killingsworth's study into the conversation cleared it up for me. You nailed it!
Ken,
Per your comment, "Not true, for her. She doesn’t have a federal pension." ... I'm researching the public service and social security tax guidelines and find it difficult to know if I'm interpreting the tax code correctly. Could you expand on this topic? Did your wife not have a "pension" at all or did she possibly have a Defined Contribution Plan (DCP) and you are stating that she is not affected by WEP/GPO in this case. It seems a teacher could be entitled to receive their DCP lump sum (i.e., not really a "pension"), but then later be dinged on SS monthly payment amount (their own or 50% spouse) by WEP/GPO. This topic is a bit confusing when one attempts to read the tax rules on these public pension scenarios and SS implications. Ken (or others), please weigh in on this topic. I haven't seen much discussion on HD regarding this SS nuance. Thanks!
Doug, Appreciate reading your story and plan for your retirement years. The financial inheritance was certainly good fortune, but a more valuable blessing is inheriting your parents' life and financial values. These values have served you well and will certainly continue throughout your remaining career and retirement. Having that $700K "safety net" does make things a bit easier, but very admirable that you have plans to apply that safety net in a charitable way down the road --- your parents and grandparents are surely proud.
Comments
Makes perfect sense. I was curious if you had any personal rules of thumb that you could offer, thus, the inquiry. Thanks for responding.
Post: Money Grows Up
Link to comment from January 19, 2025
Jonathan, Thank you for the quick response. "As I’ve argued before, I’m not inclined to lighten up on stocks when the market appears overheated, because there’s no limit to share prices might climb." "When stocks soar, I sell shares to get back to my target percentage—but I would be loath to underweight stocks." I appreciate these statements, but they do have a 'qualitativeness' to them. Do you have more quantitative guidance on indicators when to begin the adjustment from 95-100% equity back to 70-80%? Also, sorry for the exclamation mark in my previous comment...what was I thinking ;).
Post: Money Grows Up
Link to comment from January 19, 2025
Jonathan, Another great article! Your written words and conversational eloquence makes it so easy to absorb your messages. You have mention in previous articles and during the MiB podcast referenced in this thread that you invest more (over re-balance) during times of large market dips - dot.com, GFC, pandemic - resulting in, for example, a 95% equity weighting during the lows of the GFC. Consequently I assume, as the market bounces back, your portfolio would provide even greater gains in equity exposure. Can you discuss your strategy, timing and thought process to take your portfolio back to a more comfortable allocation level? Thanks, Andy
Post: Money Grows Up
Link to comment from January 19, 2025
Tony, Like it has been stated, one of the Boglehead tenets is setting an asset allocation that allows one to sleep at night...and of course, an investor is allowed to change their allocation if they feel compelled. Corrections (~10%), bear markets (~20%), crashes (yikes)... We don't like any of those :(, but they are the price of doing business. I'm curious what magnitude of correction you are looking for to "get back into the market." Recent down draft examples - S&P 500 down ~25% (~3600 from 4800), NASDAQ down~37% (10K from 16k). Obviously, those occurred while you were going to cash, but now what? Just curious if you have determined what magnitude of pullback and what index (or indices) will give you "the sign." Thanks.
Post: Waiting It Out
Link to comment from May 27, 2024
Dick, Reading others' financial journeys is always enlightening, which makes HumbleDollar special. But reading stories of gratitude are also welcomed. Appreciate your recognition of avoiding much of life's troubles and expressing gratitude for that bit of luck. Also btw, to jack facts and all the readers I offer a respectful correction --- Evel K attempted to jump the Snake River Canyon not the Grand Canyon.
Post: Luck Would Have It
Link to comment from May 27, 2024
Jesse, insightful and well-written article. I never agreed with the "over $75,000 doesn't increase happiness" conclusion.Your bringing the Killingsworth's study into the conversation cleared it up for me. You nailed it!
Post: Happy Conclusion
Link to comment from May 15, 2024
Very informative article, Dick. Generated lots of good discussion.
Post: Smaller Than It Looks
Link to comment from March 3, 2024
Thanks for the reply, Ken.
Post: Our Waiting Game
Link to comment from March 3, 2024
Ken, Per your comment, "Not true, for her. She doesn’t have a federal pension." ... I'm researching the public service and social security tax guidelines and find it difficult to know if I'm interpreting the tax code correctly. Could you expand on this topic? Did your wife not have a "pension" at all or did she possibly have a Defined Contribution Plan (DCP) and you are stating that she is not affected by WEP/GPO in this case. It seems a teacher could be entitled to receive their DCP lump sum (i.e., not really a "pension"), but then later be dinged on SS monthly payment amount (their own or 50% spouse) by WEP/GPO. This topic is a bit confusing when one attempts to read the tax rules on these public pension scenarios and SS implications. Ken (or others), please weigh in on this topic. I haven't seen much discussion on HD regarding this SS nuance. Thanks!
Post: Our Waiting Game
Link to comment from March 1, 2024
Doug, Appreciate reading your story and plan for your retirement years. The financial inheritance was certainly good fortune, but a more valuable blessing is inheriting your parents' life and financial values. These values have served you well and will certainly continue throughout your remaining career and retirement. Having that $700K "safety net" does make things a bit easier, but very admirable that you have plans to apply that safety net in a charitable way down the road --- your parents and grandparents are surely proud.
Post: Belt and Suspenders
Link to comment from February 16, 2024