Since I knew MMM back in 2013, my AA have always been 100% stocks and I even refinanced my mortgage to maximise investments. Before that, AA was more like 70% stocks/30% bonds (high cost funds) and paying debt agressively. Everything went well for me and now, I hit my barebone FI numbers
With the recent stock rally, PE are quite high and I began to reconsider my AA and leverage strategy. Previous AA was 30%VCN, 30%VTI, 10%VBR and 30%VXUS and mortgage represent 15% of total assets (house is 25% of total assets)
I am now close to 5% of cash (new contributions and distributions) so, not very efficient because I still have a debt and paying interests...! I could repay about a third of the debt with this cash but with few caveats. First, some of the cash is into registered accounts so, I will pay taxes withdrawing it because I still have incomes. Some is into TFSA and keeping it there kind of "protect" rights (like in case of one of the spousal death)
The mortgage is splited between different terms at 2.24% to 2.69% and 50% of the mortgage interests are deductible via Smith Manoeuvre (taxable investments)
Through the first months of the pandemic, I was very happy to have some dry powder and no financial stress at all. I am now trying to convince myself that since I almost won the game (like 85%) and still working for a few years (maybe 2-3?) I can let go some efficiency and relax a bit.
I work as a commercial account manager in a bank and see a lot of peoples (busines) keeping a few thousand grands (50,000-100,000$) sitting still and then, they have an opportunity to use it. It's great to show the money and negociate to refinance afterward because, a lot of competitors are already out of the game!
What do you think?