Author Topic: 100% stocks for retiring in 10 years? optimize me!!!  (Read 9929 times)

TheGibberingPotato

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100% stocks for retiring in 10 years? optimize me!!!
« on: January 04, 2015, 07:11:26 AM »
Hello all,
I am a psuedo-mustachian; living the general life style by nature for most of my adult life, but not discovering MMM until last year, and only looking at these forums recently.  For this reason, I am not fully optimized, but am trying to become that way.  I realize this is a huge post; if you can make it through it, thank you!  I will try to pay back the forums by sharing advice where I can.

Financial Summary:
My goal is retire in 5-10 years.  I realize I could probably retire closer to 5, but may want to work longer for personal reasons.  I contribute ~3.5k/month into the vanguard accounts, and I am now maxing out my 401k.  I make about 100k/year not counting investments.

Regardless, I want to optimize my savings. 
I currently have ~$325k in Vangaurd, 100% in stocks.  1/3 in VTSAX, the rest is split between various admiral index funds that cover small caps, mid caps, etc...  Despite this, only ~13k of this is in a RothIRA. 

I separately have an employer 401k, which has ~40k, 100% of it is in an index approximating the Russel 3000 (it's a troweprice account, fyi).  I max-out my HSA with HSAadministrators, all of which is in VTSAX; currenlty ~7k in there.


I keep ~5-10k in a savings account.

Issues:
1.  I know that I have relatively little in tax-deferred accounts.  This is because I didn't immediately realize I should always max out them out, and for a while only did enough to get the employer max.  I will be maxing out from now on.  If I'm ever not employed, I'll try to become self-employed to get a SEP-IRA, but that's years away and will be approaching retirement. 
Are there other ways to hasten the transfer of funds into tax-deferred accounts.  I can't get much more in the Roth because I make too much and am married (filed seperately).

2.  I am 100% stocks right now.... I know that may be a little risky considering my retirement timeframe, but initially my thought was that a recession can definitely recover within a few years, and that 5 years from now I can go heavier in bonds and work a couple extra years if I need to.  Am I setting myself up for failure?  What bond funds are favorites?  I've looked at the vanguard total bond fund and it's growth is terrible over the last decade.  I realize that balances out the risks of stocks, but ugh!!!

3.  If I get more bonds, I've read that it's more optimal to have the bonds in the tax-free/deferred accounts for tax reasons.  I realize the taxes on bonds are higher, but the growth of stocks can be much higher, and so they have more to tax (at a lower rate).  Prior to looking at the bogleheads wiki, I had always thought my riskiest largest growing funds should be in the tax free accounts because they can grow so much more (given long enough horizons) and so will have the largest taxes despite being in the long term capital gains brackets.  Clearly I am missing something here; can someone set me straight?

4.  Any major investing / tax related items (or areas to tax advantage of) I've missed here?  This post encompasses my main strategies.

thanks!
17oclockshadow

goodrookie

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Re: 100% stocks for retiring in 10 years? optimize me!!!
« Reply #1 on: January 04, 2015, 02:59:02 PM »
Assuming you can last without your investment for 1 year, place all of it in SPY and sell LEAP.
Currently, SPY is at $205.
SPY 225 at Jan 2016 = $4.11 (your target will be different based on your risk)
If SPY does not reach 225, your profit is at least 2% and whatever the appreciation
If it does reach, then profit = (225-205)+4.11 ~ 11%

TheGibberingPotato

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Re: 100% stocks for retiring in 10 years? optimize me!!!
« Reply #2 on: January 04, 2015, 03:07:33 PM »
What is SPY?  What is LEAP?

mxt0133

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Re: 100% stocks for retiring in 10 years? optimize me!!!
« Reply #3 on: January 04, 2015, 04:14:10 PM »
Regarding #3 you are correct that stocks have the higher potential of capital gains vs bonds, but remember those are taxes and capital gains rates and not are your current income tax rates.  For those of us that are planning to be in a lower tax bracket when we FIRE, you might not even be paying taxes on your capital gains.   See GoCurryCracker for a concrete example of this: http://www.gocurrycracker.com/never-pay-taxes-again/

TheGibberingPotato

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Re: 100% stocks for retiring in 10 years? optimize me!!!
« Reply #4 on: January 04, 2015, 05:05:14 PM »
So what your saying is that you agree that, assuming you'll retire and be in a lower tax bracket (I most definitely will be), it makes sense to keep the high earning potential funds (growth oriented equities) in the tax-deferred accounts?

mxt0133

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Re: 100% stocks for retiring in 10 years? optimize me!!!
« Reply #5 on: January 04, 2015, 07:47:38 PM »
Sorry, I was not clear on my opinion.  Assets/Finds that earn high interest or have a lot of turnover should be in tax-deferred accounts while passive index funds such as VTSAX should be in taxable accounts if you do not anymore space in tax-deferred accounts.

Here is a good read on the subject: https://www.bogleheads.org/wiki/Principles_of_tax-efficient_fund_placement

Jeremy

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Re: 100% stocks for retiring in 10 years? optimize me!!!
« Reply #6 on: January 04, 2015, 09:38:56 PM »
This somewhat depends on your age.  If you are 60 and plan to retire in 5 years, then advice would be different than if you are 25 and plan to retire in 5 years

The "have bonds" advice is for people that retire when they are 65 and will be dead within 15 years

We retired 2 years ago in our 30's, and are 90% in stocks and moving towards 100% stock.

If you are flexible on your withdrawal rate (e.g. you said you can work a couple more years and you may enjoy doing so) then a 100% stock portfolio has the best long term survival rate (60+ years) and maximum terminal value (the $ we will leave to charity)


RapmasterD

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Re: 100% stocks for retiring in 10 years? optimize me!!!
« Reply #7 on: January 05, 2015, 09:23:32 PM »
+1

Depending on your specific situation I don't NECESSARILY see an issue here.

milesdividendmd

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Re: 100% stocks for retiring in 10 years? optimize me!!!
« Reply #8 on: January 06, 2015, 12:24:07 AM »
The biggest risk with 100% stocks is hitting a bear market and then losing faith and increasing your bond percentage. In other words overestimating your risk tolerance/stomach. (A very common mistake.)

Other risks include losing your job in a bear market and having to tap your stash when it is undervalued, thus locking in your losses.

By having a 100% stock portfolio what you are saying is that you are going to be able to stomach a 50-80% loss in your portfolio value without losing faith.

Only you know if this is the case.

innerscorecard

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Re: 100% stocks for retiring in 10 years? optimize me!!!
« Reply #9 on: January 06, 2015, 01:08:36 AM »
In this bull market, everyone thinks they can handle 100% stocks. Look at posts on the Bogleheads forum from 2007-2009.

I don't think anything magical changed to make people more resilient emotionally permanently between then and now. Rather, everyone is in a "risk-on" mood and think they can handle that risk forever.

Some people will be able to. But more won't. The more conservative thing to do is to assume that you won't be able to.

RapmasterD

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Re: 100% stocks for retiring in 10 years? optimize me!!!
« Reply #10 on: January 06, 2015, 11:23:26 AM »
MilesDividend MD offers strong guidance. Assuming a 50% haircut at some point along the way is pragmatic.

Also, we don't know how much you're saving each year.

Conservatively, your 365K honeypot could come very close to doubling in 10 years. If we hit a snag, it could take a few years longer. And yes, we most certainly will hit that snag -- but it all depends on when in the next many years we do.

Bottom line: In your shoes I'd probably put 80%-90% in a simple and easy stock index fund, and I'd be much more focused on the SAVINGS side of the equation.

NoraLenderbee

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Re: 100% stocks for retiring in 10 years? optimize me!!!
« Reply #11 on: January 06, 2015, 03:14:03 PM »
In this bull market, everyone thinks they can handle 100% stocks. Look at posts on the Bogleheads forum from 2007-2009.

I don't think anything magical changed to make people more resilient emotionally permanently between then and now. Rather, everyone is in a "risk-on" mood and think they can handle that risk forever.

Some people will be able to. But more won't. The more conservative thing to do is to assume that you won't be able to.

+2. A bear market can last a long time.

Bob W

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Re: 100% stocks for retiring in 10 years? optimize me!!!
« Reply #12 on: January 06, 2015, 03:33:29 PM »
The biggest risk with 100% stocks is hitting a bear market and then losing faith and increasing your bond percentage. In other words overestimating your risk tolerance/stomach. (A very common mistake.)

Other risks include losing your job in a bear market and having to tap your stash when it is undervalued, thus locking in your losses.

By having a 100% stock portfolio what you are saying is that you are going to be able to stomach a 50-80% loss in your portfolio value without losing faith.

Only you know if this is the case.

+1  Very few private investors ever make money on stocks.  They buy high (now) and sell low (the next big turn down)  That is 80-90% of individual investors.

My guess is that you will fall into this group based on your narrow experience and understanding of markets.  You're betting against pros here you know?

So one of two things -

1.  Do lots of homework and reading (about 200 hours worth of time)
0r
2.  Buy something you understand like CDs and Annuities that are guaranteed.   If you CD ladder (look it up)  Your long term return will be on par with bonds and slightly below stocks (The S and P 500 has had something like a 1.5% annual return over the past decade so that isn't too hard to beat)

Your age makes a hell of a lot of difference as well as your predicted date of death.

Better to read,  read,  read and understand investments/money and work a few extra years. 

milesdividendmd

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Re: 100% stocks for retiring in 10 years? optimize me!!!
« Reply #13 on: January 06, 2015, 03:56:23 PM »

The biggest risk with 100% stocks is hitting a bear market and then losing faith and increasing your bond percentage. In other words overestimating your risk tolerance/stomach. (A very common mistake.)

Other risks include losing your job in a bear market and having to tap your stash when it is undervalued, thus locking in your losses.

By having a 100% stock portfolio what you are saying is that you are going to be able to stomach a 50-80% loss in your portfolio value without losing faith.

Only you know if this is the case.

+1  Very few private investors ever make money on stocks.  They buy high (now) and sell low (the next big turn down)  That is 80-90% of individual investors.

My guess is that you will fall into this group based on your narrow experience and understanding of markets.  You're betting against pros here you know?

So one of two things -

1.  Do lots of homework and reading (about 200 hours worth of time)
0r
2.  Buy something you understand like CDs and Annuities that are guaranteed.   If you CD ladder (look it up)  Your long term return will be on par with bonds and slightly below stocks (The S and P 500 has had something like a 1.5% annual return over the past decade so that isn't too hard to beat)

Your age makes a hell of a lot of difference as well as your predicted date of death.

Better to read,  read,  read and understand investments/money and work a few extra years.

Reading is key as is really finding a philosophy you really believe in.

The name of the game is sticking to your approach.

But This advice is a little bit extreme IMO. Although we all tend to overestimate our own risk tolerances, it is not necessarily unreasonable for someone, even a new investor  to choose an all stock portfolio

For one thing, The S&P has returned 100% over the past decade!  That's more like an annualized return of 7% nominal.

Not bad.

index

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Re: 100% stocks for retiring in 10 years? optimize me!!!
« Reply #14 on: January 06, 2015, 04:43:10 PM »

The biggest risk with 100% stocks is hitting a bear market and then losing faith and increasing your bond percentage. In other words overestimating your risk tolerance/stomach. (A very common mistake.)

Other risks include losing your job in a bear market and having to tap your stash when it is undervalued, thus locking in your losses.

By having a 100% stock portfolio what you are saying is that you are going to be able to stomach a 50-80% loss in your portfolio value without losing faith.

Only you know if this is the case.

+1  Very few private investors ever make money on stocks.  They buy high (now) and sell low (the next big turn down)  That is 80-90% of individual investors.

My guess is that you will fall into this group based on your narrow experience and understanding of markets.  You're betting against pros here you know?

So one of two things -

1.  Do lots of homework and reading (about 200 hours worth of time)
0r
2.  Buy something you understand like CDs and Annuities that are guaranteed.   If you CD ladder (look it up)  Your long term return will be on par with bonds and slightly below stocks (The S and P 500 has had something like a 1.5% annual return over the past decade so that isn't too hard to beat)

Your age makes a hell of a lot of difference as well as your predicted date of death.

Better to read,  read,  read and understand investments/money and work a few extra years.

Reading is key as is really finding a philosophy you really believe in.

The name of the game is sticking to your approach.

But This advice is a little bit extreme IMO. Although we all tend to overestimate our own risk tolerances, it is not necessarily unreasonable for someone, even a new investor  to choose an all stock portfolio

For one thing, The S&P has returned 100% over the past decade!  That's more like an annualized return of 7% nominal.

Not bad.

It's very unreasonable to be 100% stocks 10 years prior to retirement. How many financial advisors would recommend 100% stocks to a 55 year old?

The rule of thumb would be ~50/50 10 years out. You could get a little more aggressive 70/30. This bull market will not last forever.

If the market matches the last 10 years your 400k will be 800k with 100% stock or 600k 50/50. If we have a bear market you could wind up with 200-300k vs 400-500k if you were 50/50.

I guess it depends on if you cannot retire without 7% returns for the next 10 years. If you still got FI at 3-4% returns then why risk your retirement for more money?

milesdividendmd

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Re: 100% stocks for retiring in 10 years? optimize me!!!
« Reply #15 on: January 06, 2015, 04:52:54 PM »
Kind of a weak argument.

How many financial advisors advise you to prepare for a 60 + year retirement?

It's very reasonable to invest in 100% stocks IF the investor understands the risk he is taking.

It is very unreasonable to assume that there is one strategy appropriate for every investor who is 10 years away from planned retirement.

GGNoob

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Re: 100% stocks for retiring in 10 years? optimize me!!!
« Reply #16 on: January 06, 2015, 05:19:08 PM »
2.  I am 100% stocks right now.... I know that may be a little risky considering my retirement timeframe, but initially my thought was that a recession can definitely recover within a few years, and that 5 years from now I can go heavier in bonds and work a couple extra years if I need to.  Am I setting myself up for failure?  What bond funds are favorites?  I've looked at the vanguard total bond fund and it's growth is terrible over the last decade.  I realize that balances out the risks of stocks, but ugh!!!

If you can accept and understand the risks of 100% stocks, then you will probably be fine to stick with it. I plan to be 100% stock in my retirement portfolio forever (I hold some bonds in my HSA and emergency fund). But I feel that in retirement, you'd probably want to have a variable withdrawal rate or be able to go back to work if needed during a bear market. My plan is to save enough that we can live off of a lower withdrawal rate if needed.

Looking at your portfolio from your other post, it looks like you are 100% US stocks:

Quote
My allocation is roughly as follows:

~40% VTSAX
~10% VFIAX
~15% VSMAX
~10% VSIAX
~10% VIMAX
~15% VASVX (exchanging soon)

You'll really want to be between 20 and 50% international if you are going to stay 100% stocks. I say that because there will be years when US stocks are down and international stocks are up (http://www.rickferri.com/blog/investments/foreign-stocks-for-the-long-run/). You may also want to add 10% REITs as they don't always move with the rest of the market (http://www.rickferri.com/blog/investments/reits-and-your-portfolio/).

Otherwise if you are going to invest in bonds, then doing so in your 401k is probably your best bet since its a tax efficient location for them and since you probably want something with more growth potential in your Roth IRA.

RapmasterD

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Re: 100% stocks for retiring in 10 years? optimize me!!!
« Reply #17 on: January 06, 2015, 06:36:35 PM »
Yup. It all depends. And I don't put a whole lot of stock (pun intended) in what most financial advisers have to say.

Let's not forget that 2000 - 2010 was the lost decade for the S&P 500 when, adjusted for inflation, investors "enjoyed" a negative return over that 10 year period. Arguably, many of those years were a great time to not be in equities.

I'm 75% equities, mostly in the S&P 500; 20% BND; and 5% cash.

When my super secret, 100% quantitatively based and 0% emotionally based sensors tell me to dump out of the stock market, I will. So far, we're not even close.

Again, I suggest the OP focus mostly on SAVING.

NEXT!

index

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Re: 100% stocks for retiring in 10 years? optimize me!!!
« Reply #18 on: January 06, 2015, 07:06:58 PM »
Kind of a weak argument.

How many financial advisors advise you to prepare for a 60 + year retirement?

It's very reasonable to invest in 100% stocks IF the investor understands the risk he is taking.

It is very unreasonable to assume that there is one strategy appropriate for every investor who is 10 years away from planned retirement.

You need to take your own advice and read about portfolio theory and risk adjusted returns. You may have an MD but it appears you know squat about risk! These 100% stock allocations are a product of a 6 year bull market. It is amazing that even on a forum of individuals who are conservative with their finances, the members fall into the same trap of taking on too much risk just like members of day trading forums.

Don't underestimate what can happen in the future in equities. Look at Japan, a bear market going on 30 years. There are as many smart people calling for deflation as inflation in the future. You will not like what happens if we enter a deflationary period and you are 100% allocated to equities. 


t-rymz

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Re: 100% stocks for retiring in 10 years? optimize me!!!
« Reply #19 on: January 06, 2015, 07:15:19 PM »
Good job with everything so far. I wouldn't recommend you start buying individual stocks. You're likely to do worse than with an index fund.

However, you should own bonds, since they dampen stock shocks. Despite what the American recovery looks like, a stock stagnation can last a long time - Europe is looking at 7 years so far, and Japan had that lost decade. I'm a fan of long term bonds instead of a general bond market fund. Long-term bonds pay out quite a lot more than T-bills, but they're more volatile. Since I'm guessing that you're OK with mild fluctuations, the bonds should work well. Bonds have just about never lost money in a 3-year period.

Depending on your age, you probably want at the very least 25-30% in bonds if you're planning to retire soon. That would be aggressive. The general rule of thumb is 110 minus your age in stocks.

milesdividendmd

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Re: 100% stocks for retiring in 10 years? optimize me!!!
« Reply #20 on: January 06, 2015, 07:23:38 PM »
Please teach me about portfolio theory, Index!  Bestow upon me your wisdom!

(Heres a hint, if you want to sound well read:  it's called "modern portfolio theory".)

I am actually in the midst of a multi part series on my blog discussing  different strategies for loss avoidance with portfolio construction.  (I have already covered simple asset class diversification, the permanent portfolio, Barbelling, value investing, and trend following, I have yet to address absolute and dual momentum investing, and hedging. I love thinking about risk.

Do you really think you have so much to teach me about risk?

Please share with me your enlightened wisdom.

Buy stocks and bonds?  Is that your great insight?




index

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Re: 100% stocks for retiring in 10 years? optimize me!!!
« Reply #21 on: January 06, 2015, 09:56:43 PM »
Please teach me about portfolio theory, Index!  Bestow upon me your wisdom!

(Heres a hint, if you want to sound well read:  it's called "modern portfolio theory".)

I am actually in the midst of a multi part series on my blog discussing  different strategies for loss avoidance with portfolio construction.  (I have already covered simple asset class diversification, the permanent portfolio, Barbelling, value investing, and trend following, I have yet to address absolute and dual momentum investing, and hedging. I love thinking about risk.

Do you really think you have so much to teach me about risk?

Please share with me your enlightened wisdom.

Buy stocks and bonds?  Is that your great insight?

I took a look at you blog. I thought your "out on a limb" post was good. What I do not understand is you have a grasp on risk and the importance of uncorrelated asset classes yet you are OK with 100% stocks with a relatively short time horizon.

I would hate to see him  work 10 more years, have a 1M portfolio that is halved in his last year of work. I guess he will work years 11, 12, and 13 waiting for equities to recover... If he doesn't need 7% a year, why risk a considerable retirement to get it?

If the time horizon was 30 years, I would be all for 100% equities for the first 10 years of investment.

I think your blog touched on some interesting portfolio constructs; though those charts look great with high bind allocations with the 30 year bull market in bonds. What happens if we have a 30 year bear market in bonds?

Diversification is key. A proper nest egg should consist of a diversified portfolio of equities (all market caps, countries, sectors), bonds, alternatives, physical real estate, and even mortgage debt.

For your blog: I would look into a ditm call portfolio that uses cheap leverage as a way of reducing volatility and eliminating fat trail risks. Ie hold one ditm leap ($20 or so) on spy instead of 100 shares. If it rises, you capture the rise at experation. If it falls, the time value of your leap increases lessening the loss. This is a play on Taleb's recommendations .

milesdividendmd

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100% stocks for retiring in 10 years? optimize me!!!
« Reply #22 on: January 06, 2015, 10:20:03 PM »
Thanks for the deep in the money call rec. I'll research it.

If you go back and read my posts in this thread, you'll see that I  am not advocating for 100% equities at all. I am merely pointing out that a 100% equities approach is  theoretically reasonable, if the investor truly understands his downside risk,and can commit to this approach through thick and thin.  (I am no such investor.)

A 100% equities buy and hold approach will generally have high expected returns going forward , but sticking with the plan won't be easy. It is guaranteed to be a very bumpy ride.

milesdividendmd

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Re: 100% stocks for retiring in 10 years? optimize me!!!
« Reply #23 on: January 06, 2015, 11:34:16 PM »
Also I am not sure that the 30 year bull market in bonds is a reason to doubt most of the above approaches going forward. A bear decade in bonds is losing 3% real. That's a bad day in the stock market.

And bonds almost always avoid blood during equity bears. (Their real purpose in a portfolio)

http://www.alphaarchitect.com/blog/2015/01/02/the-hated-the-feared-the-amazing-the-us-treasury-bond/#.VKzQ_0Y77CQ

In other words equity volatility is still the biggest driver of returns in most of the above mentioned approaches.

This is actually my biggest problem with mitigating risk by simply diluting equity exposure with bonds. It doesn't provide enough downside protection.

(My favored approach is dual momentum which goes 100% short treasuries when asset momentum is negative. ). Historically this approach has led to much smaller drawdowns and much higher risk adjusted returns.

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2042750

I'm not saying this is the best way to limit downside risk, but it is my way.

innerscorecard

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Re: 100% stocks for retiring in 10 years? optimize me!!!
« Reply #24 on: January 06, 2015, 11:37:48 PM »
The problem is that a 100% equities approach also runs the risk of having very low returns going forward. That's the difference between expectation and a probabilistic outcome. Miles, I know you understand that, but others here who are just starting out may not.

milesdividendmd

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Re: 100% stocks for retiring in 10 years? optimize me!!!
« Reply #25 on: January 07, 2015, 12:02:30 AM »

The problem is that a 100% equities approach also runs the risk of having very low returns going forward. That's the difference between expectation and a probabilistic outcome. Miles, I know you understand that, but others here who are just starting out may not.

I actually agree with this.

on some level equities are the least risky assets, in that they are the most likely to yield the highest final investment amount over long time horizons (say 30 + years) But they are not the most efficient, and behaviorally, it is not realistic for most investors to weather the storms associated with such an approach.

I freely admit that I am not Iron stomached enough for such an approach.

I do believe that there are some investors out there who are up to the challenge. And for such investors, 100% stocks 10 years from retirement would be reasonable (assuming they understand the risk that they may have to work a couple extra years, in exchange for the possible payoff of working a couple years less.)






clifp

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Re: 100% stocks for retiring in 10 years? optimize me!!!
« Reply #26 on: January 07, 2015, 12:58:19 AM »
Maybe I am missing something, but how are you all giving AA advise without knowing two critical pieces of info the OPs age and retirement spending needs. If 17Clock is 30 and needs to spend in 50K in retirement than the only chance of accumulating enough money is 100% equities. If on the other hand he is 55 and because of pension and/or SS only needs needs to take $20K from his stash each year, then 100% equities is way too much risk.

milesdividendmd

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Re: 100% stocks for retiring in 10 years? optimize me!!!
« Reply #27 on: January 07, 2015, 01:41:23 AM »
Good point.

This is one of the reasons why I try to speak in generalities about investment advice, and only get specific when describing my own personal approach.

Even assuming 2 identical financial situations, personal values will make very different allocation strategies appropriate for 2 separate investors.

That sounds like a platititude, I know, but it's an important point that I must constantly remind myself of.

This is why I believe it is always  a trap to make blanket statements such as "investors planning to retire in 10 years should not be 100% long stock."

On the other hand, hearing everyone's impassioned perspectives makes for interesting exchanges, and opens doors to new ideas.

Kumbaya!

RapmasterD

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Re: 100% stocks for retiring in 10 years? optimize me!!!
« Reply #28 on: January 12, 2015, 02:44:01 PM »
Good point.

This is one of the reasons why I try to speak in generalities about investment advice, and only get specific when describing my own personal approach.

Even assuming 2 identical financial situations, personal values will make very different allocation strategies appropriate for 2 separate investors.

That sounds like a platititude, I know, but it's an important point that I must constantly remind myself of.

This is why I believe it is always  a trap to make blanket statements such as "investors planning to retire in 10 years should not be 100% long stock."

On the other hand, hearing everyone's impassioned perspectives makes for interesting exchanges, and opens doors to new ideas.

Kumbaya!

Sorry to resurrect this 'should be dead' thread....but I was literally just thinking about this very thought a few hours ago. Arguably, '100% stock' is a meaningless term.

100% of what kind of stock? Over here I've got 50% of my basket allocated to the S&P 500. Over there I've got 15% allocated to some QQQ. Oh wait, here's a big '35% of total' basket of low beta, high dividend paying stocks that would make any grandma (and me!) happy. This allocation is fictional. I hope it makes the point.