Poll

What is your rough allocation. Stocks includes equities ETF, Mutual funds of x% equities etc.

~100% stocks
50 (31.8%)
~90% stocks
40 (25.5%)
~80% stocks
36 (22.9%)
~70% stocks
10 (6.4%)
~60% stocks
12 (7.6%)
~50%stocks
5 (3.2%)
~40% stocks
3 (1.9%)
~30% stocks
0 (0%)
~20% stocks
0 (0%)
~10% stocks
1 (0.6%)
NO Stocks
0 (0%)

Total Members Voted: 157

Author Topic: Investors, how risky are you and why?  (Read 2393 times)

FIRE@50

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Re: Investors, how risky are you and why?
« Reply #50 on: March 11, 2019, 11:19:40 AM »
I'm 100% in stocks. The reason I'm willing to take that 'risk' is because my investment time horizon is several decades.

RWD

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Re: Investors, how risky are you and why?
« Reply #51 on: March 11, 2019, 11:40:54 AM »

Mississippi Mudstache

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Re: Investors, how risky are you and why?
« Reply #52 on: March 11, 2019, 01:09:38 PM »
Long term cap gains for a modest early retiree are a pipe dream!

What does this even mean?

daverobev

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Re: Investors, how risky are you and why?
« Reply #53 on: March 11, 2019, 01:13:06 PM »
Long term cap gains for a modest early retiree are a pipe dream!

What does this even mean?

No tax, I'd assume.

BicycleB

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Re: Investors, how risky are you and why?
« Reply #54 on: March 11, 2019, 01:27:34 PM »
Long term cap gains for a modest early retiree are a pipe dream!

What does this even mean?

No tax, I'd assume.

I think so too. I assume he's thinking of the scenario where income per person is under $37,500 and therefore the tax rate on long term capital gains is zero.

Maybe the "pipe dream" part is that he'd love to have more income...but it's a pipe dream because he expects to FIRE on less, so he won't bother earning the unneeded stash.

Mississippi Mudstache

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Re: Investors, how risky are you and why?
« Reply #55 on: March 11, 2019, 02:01:54 PM »
Long term cap gains for a modest early retiree are a pipe dream!

What does this even mean?

No tax, I'd assume.

I think so too. I assume he's thinking of the scenario where income per person is under $37,500 and therefore the tax rate on long term capital gains is zero.

Maybe the "pipe dream" part is that he'd love to have more income...but it's a pipe dream because he expects to FIRE on less, so he won't bother earning the unneeded stash.

I suppose that makes the most sense of any explanation I can come up with. It's certainly an odd way of phrasing it. Literally speaking, every early retiree is depending on long term capital gains for their future subsistence. But paying tax on long term capital gains is not exactly something that retirees "dream" of. And if I were desperate to pay more taxes, I could easily work longer to accrue a larger nest egg, which would throw off capital gains above the taxable threshold, so it's not exactly a "pipe dream", i.e. "an unattainable or fanciful hope or scheme".

lowroller4111

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Re: Investors, how risky are you and why?
« Reply #56 on: March 11, 2019, 02:47:13 PM »
Sliiiightly cherry-picking your dates there.

This has nothing to do with cherry picking dates.  It was to demonstrate that there CAN be decade long periods where bonds outperform equities.  In addition 100% equities isn't pareto efficient.  The risk vs reward equation thins out dramatically after about 85% equities and it isn't worth the extra volatility and potential negative returns stemming from lack of diversification.

It's never a good idea to put all eggs in one basket.  And again as I gave an example above, equities don't always perform the best hence diversification with non-correlated asset classes is recommended.

« Last Edit: March 11, 2019, 02:49:02 PM by lowroller4111 »

Mississippi Mudstache

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Re: Investors, how risky are you and why?
« Reply #57 on: March 12, 2019, 06:22:01 AM »
Sliiiightly cherry-picking your dates there.

This has nothing to do with cherry picking dates.  It was to demonstrate that there CAN be decade long periods where bonds outperform equities.  In addition 100% equities isn't pareto efficient.  The risk vs reward equation thins out dramatically after about 85% equities and it isn't worth the extra volatility and potential negative returns stemming from lack of diversification.

It's never a good idea to put all eggs in one basket.  And again as I gave an example above, equities don't always perform the best hence diversification with non-correlated asset classes is recommended.

A portfolio made up of four big tech giants (Facebook, Amazon, Netflix, Google) is non-diversified. A portfolio that includes practically every stock in the U.S. isn't.
« Last Edit: March 12, 2019, 07:04:16 AM by Mississippi Mudstache »

Telecaster

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Re: Investors, how risky are you and why?
« Reply #58 on: March 12, 2019, 06:31:13 AM »
I'm risk adverse, so I'm mostly in stocks. 

Mississippi Mudstache

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Re: Investors, how risky are you and why?
« Reply #59 on: March 12, 2019, 06:58:48 AM »
I'm risk averse, so I'm mostly in stocks.

LOL. Same here. I'm highly averse to lagging average market returns by weighing down my portfolio with underperforming assets.

2Birds1Stone

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Re: Investors, how risky are you and why?
« Reply #60 on: March 12, 2019, 07:03:00 AM »
I should have been more specific, but @BicycleB nailed it.

I'm personally FIREing on a portfolio of ~$500k, so I will likely never pay cap gains tax....if my portfolio balloons to where I am above the threshold, that would be an amazing problem to have, but not one I'm willing to work an extra 5+ years for.

OurTown

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Re: Investors, how risky are you and why?
« Reply #61 on: March 14, 2019, 01:33:29 PM »
65/35.  I suspect the younger guys here are a little riskier than I am. 

js82

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Re: Investors, how risky are you and why?
« Reply #62 on: March 14, 2019, 04:35:22 PM »
North of 90%.  A bit lower if you count REITs(including REIT ETF's) as Real Estate and not stocks.

Rationale: In the short run, I don't love the current state of the stock market, but I absolutely hate the current state of the bond market.  And in the long run, stocks are the surer bet.