Author Topic: If you can handle volatility and a 15+ year timeline, invest in 100% stocks?  (Read 28624 times)

aspiringnomad

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Re: If you can handle volatility and a 15+ year timeline, invest in 100% stocks?
« Reply #100 on: February 13, 2016, 01:13:51 PM »
Interesting WSJ article on stocks vs. bonds performance so far this century. In short, bonds have outperformed thus far. But Prof Siegel who has argued that stocks are actually less risky than bonds responds:

“As you said, the starting point is very important. In 2000, the U.S. stock market was the most overvalued in its entire history, with the S&P 500 selling for 30 times earnings, almost twice the valuation today. We have also had a record decline in interest rates, so long-term governments have done well. Do you think bonds are going to do well over the next 10 years? Are U.S. interest rates going to minus 1% or lower? And if so, wouldn’t holding stocks with a positive 2.3% dividend yield and a long history of increasing dividends more than inflation make infinitely more sense?”

I agree with him; I'm about 85% equities at the moment and moving up to 90.

http://www.wsj.com/articles/stocks-for-the-long-run-not-so-far-this-century-1455282180?mod=WSJ_article_EditorsPicks_0

bacchi

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Re: If you can handle volatility and a 15+ year timeline, invest in 100% stocks?
« Reply #101 on: February 13, 2016, 01:38:22 PM »
If a specific retirement age isn't a set goal, you can probably stay 100% in equities with the understanding that your volatility dampner is more work, but that option may disappear with a big recession.

Yes, this. If you're planning to ER at 35, and 2009 repeats, than you suck it up and retire at 37 instead. You can even go to PT work if working full time for another year or two is too disturbing to think about.

That's the beauty of ER. We can be flexible.

tj

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Re: If you can handle volatility and a 15+ year timeline, invest in 100% stocks?
« Reply #102 on: February 13, 2016, 02:26:14 PM »
If a specific retirement age isn't a set goal, you can probably stay 100% in equities with the understanding that your volatility dampner is more work, but that option may disappear with a big recession.

Yes, this. If you're planning to ER at 35, and 2009 repeats, than you suck it up and retire at 37 instead. You can even go to PT work if working full time for another year or two is too disturbing to think about.

That's the beauty of ER. We can be flexible.

You have to be very flexible though. That 2 years could turn into 5 or 10 years, depending on how long it takes your portfolio to bounce back.
« Last Edit: February 13, 2016, 02:31:19 PM by tj »

steveo

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Re: If you can handle volatility and a 15+ year timeline, invest in 100% stocks?
« Reply #103 on: February 13, 2016, 02:28:18 PM »
If a specific retirement age isn't a set goal, you can probably stay 100% in equities with the understanding that your volatility dampner is more work, but that option may disappear with a big recession.

Yes, this. If you're planning to ER at 35, and 2009 repeats, than you suck it up and retire at 37 instead. You can even go to PT work if working full time for another year or two is too disturbing to think about.

That's the beauty of ER. We can be flexible.

This is my take as well. Just work part time to give me some buffer.

meadow lark

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Re: If you can handle volatility and a 15+ year timeline, invest in 100% stocks?
« Reply #104 on: February 14, 2016, 06:59:03 AM »
At 41, I am 20% in real estate, 80% in index funds.  No bonds.  My hoped for FIRE is 4 yrs, but my investment horizon is 60 yrs.  I am fine with my AA.  When the market goes down, I stop looking at my balances.

steveo

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Re: If you can handle volatility and a 15+ year timeline, invest in 100% stocks?
« Reply #105 on: February 14, 2016, 12:36:44 PM »
If a specific retirement age isn't a set goal, you can probably stay 100% in equities with the understanding that your volatility dampner is more work, but that option may disappear with a big recession.

Yes, this. If you're planning to ER at 35, and 2009 repeats, than you suck it up and retire at 37 instead. You can even go to PT work if working full time for another year or two is too disturbing to think about.

That's the beauty of ER. We can be flexible.

You have to be very flexible though. That 2 years could turn into 5 or 10 years, depending on how long it takes your portfolio to bounce back.

This is a good counter point. I like the idea of being heavy equities until you get to your figure or close to it but then increasing bonds. It's more about a safety margin than it is about getting rich.

AdrianC

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Re: If you can handle volatility and a 15+ year timeline, invest in 100% stocks?
« Reply #106 on: February 15, 2016, 08:49:55 AM »
Interesting WSJ article on stocks vs. bonds performance so far this century. In short, bonds have outperformed thus far. But Prof Siegel who has argued that stocks are actually less risky than bonds responds:

“As you said, the starting point is very important. In 2000, the U.S. stock market was the most overvalued in its entire history, with the S&P 500 selling for 30 times earnings, almost twice the valuation today. We have also had a record decline in interest rates, so long-term governments have done well. Do you think bonds are going to do well over the next 10 years? Are U.S. interest rates going to minus 1% or lower? And if so, wouldn’t holding stocks with a positive 2.3% dividend yield and a long history of increasing dividends more than inflation make infinitely more sense?”

I agree with him; I'm about 85% equities at the moment and moving up to 90.

http://www.wsj.com/articles/stocks-for-the-long-run-not-so-far-this-century-1455282180?mod=WSJ_article_EditorsPicks_0

Couldn't read the article , agree with the quote. We're 80% equities (not market-cap weighted index funds), 20% cash.

El Marinero

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Re: If you can handle volatility and a 15+ year timeline, invest in 100% stocks?
« Reply #107 on: February 18, 2016, 12:49:58 PM »
Not sure if anyone linked this article yet, but it made sense to me.

http://www.nytimes.com/2016/02/13/your-money/how-much-of-your-nest-egg-to-put-into-stocks-all-of-it.html?_r=0

I've been mostly in equities for the last 25 years - so i've been up and down on the roller-coaster a few times

intotherealworld

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A brief update, 3 years of 100% stocks has been going well so far. I find I'm looking at the current market value less and less. Still find myself revisiting the idea of bonds to reduce volitility occasionally.