Poll

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

~100% stocks
59 (30.7%)
~90% stocks
55 (28.6%)
~80% stocks
39 (20.3%)
~70% stocks
12 (6.3%)
~60% stocks
14 (7.3%)
~50%stocks
6 (3.1%)
~40% stocks
6 (3.1%)
~30% stocks
0 (0%)
~20% stocks
0 (0%)
~10% stocks
1 (0.5%)
NO Stocks
0 (0%)

Total Members Voted: 192

Author Topic: Investors, how risky are you and why?  (Read 3683 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.

bacchi

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Re: Investors, how risky are you and why?
« Reply #63 on: April 01, 2019, 11:19:01 AM »
I converted some personal real estate to a rental recently but, before that, I was moving to 90/10 by creating a bond tent. I'm ER.

Going 100% until you're close to ER is not a big deal; if the market falls before you quit, you just buy stocks at a fire sale and wait it out.

Telecaster

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Re: Investors, how risky are you and why?
« Reply #64 on: April 01, 2019, 11:58:41 AM »
I'm extremely risk adverse, so I'm over 90% stocks. 

CorpRaider

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Re: Investors, how risky are you and why?
« Reply #65 on: April 03, 2019, 12:26:42 PM »
Very risky.  100% VTSAX or whatever it is called.  Because I started investing in 2012 and have never sniffed a real drawdown.  :-)
« Last Edit: April 03, 2019, 12:44:46 PM by CorpRaider »

tyort1

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Re: Investors, how risky are you and why?
« Reply #66 on: April 03, 2019, 12:35:53 PM »
90% stocks and I'll keep it there till just before FIRE, then I'll re-characterize to 60/40 and do a glide path during the first 10 years.  I'll also pay off the mortgage before FIRE so I'll have 2 hedges against early volatility.

DeniseNJ

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Re: Investors, how risky are you and why?
« Reply #67 on: April 03, 2019, 03:40:16 PM »
I'm all in.  Everything is in total market funds.  I DCA so when the market tanks I'm a happy gal and clean up.   I've got 9 years left to retire and DH and I each have a pension.  I'll be 57 at retirement and DH will be 60 (Is that right?  Jeez, time flies!) so Social Security will also be a factor shortly.  SSA and pensions are like our bond money so the 401K and Roths are all index total stock funds. 

Oh, also no debt aside from mortgage and I plan to pound that down in a few years after kids graduate from college so part of my investments will also be the value of the house since I'd like to sell it and rent a small apartment in a beach town somewhere.

talltexan

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Re: Investors, how risky are you and why?
« Reply #68 on: April 04, 2019, 08:20:31 AM »
I appreciate the link to the Bogleheads forum. While MarketTimer comes out okay in the end, I think it's good for someone considering leverage to read that thread and note some of the unexpected problems that arise when employing it.

I make myself re-read it once a year.

appleshampooid

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Re: Investors, how risky are you and why?
« Reply #69 on: April 04, 2019, 09:17:32 AM »
I appreciate the link to the Bogleheads forum. While MarketTimer comes out okay in the end, I think it's good for someone considering leverage to read that thread and note some of the unexpected problems that arise when employing it.

I make myself re-read it once a year.
The thing is, he started out with a risky strategy for sure, but with a maximum downside (only borrowing at low rates from CC offers etc to fund the futures stuff). Then when SHTF he started buying on margin rather than just throwing in the towel. That's what really killed him. Of course the guy is a FI millionaire now, so NO RAGRETS.

Mighty-Dollar

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Re: Investors, how risky are you and why?
« Reply #70 on: April 13, 2019, 08:15:49 PM »
75% stocks because the upside potential is BIG. The downside risk is minimal. https://youtu.be/opNohVglLX0?t=440