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Why should I not stay with 100% stocks?

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  • TXDoc21
    replied
    As long as you can weather the storm, then your good. If your account lost half its value would you sell?

    I feel like if you were 60 or 70 and retiring soon then you may feel differently. If you are retiring at a younger age and you had a massive bear market, you can always push back your retirement by months/years if needed.

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  • Larry Ragman
    replied
    The rationale for some bond, or even cash allocation, within 5 years of retirement is SORR. If there is a market crash early in retirement you leave equities to recover and spend your bonds. Do you have to? No, and the longer your expected retirement the more sense 100% equities makes. If it were me, I’d go at least 80-20 five years out.

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  • Kamban
    replied
    I was 100% stocks for a long time. Only in the last 10+ years I have had some real estate income producing properties and some investments in businesses. I still have no bonds or T bills As long as there is some liquidity there is no need to go into bonds. Others may disagree, but this is what works for me.

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  • danesgod
    replied
    Originally posted by Dewangski1 View Post
    I 100% agree with stocks only right now. Given your potential 5 year time line, I’d consider building a bucket with about 3-5 years of expenses that is highly liquid to help diffuse the potential pain of a bear. Otherwise, just remain flexible with your 5-10 year plan… don’t go out in a bear.

    FWIW. I’m all stocks. Of course I’m 15 years out, but I do plan on triggering the above plan when I’m 5-7 years away. And who knows what the interest rate environment will be then, but I’d hope to set up a CD ladder for liquidity in my initial retirement years. This would incur minimal income and would enable more tax efficient 401k conversions.
    I agree. 100% stocks, <4% withdrawl rate, and 3-5 years "cash" when close to retirement sounds fine to me as long as OP can tolerate the downturn w/o an income coming in too.

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  • DynamicHipScrew
    replied
    I’m 95+% stocks. Although I’m at least 25 yrs from retirement.

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  • Dewangski1
    replied
    I 100% agree with stocks only right now. Given your potential 5 year time line, I’d consider building a bucket with about 3-5 years of expenses that is highly liquid to help diffuse the potential pain of a bear. Otherwise, just remain flexible with your 5-10 year plan… don’t go out in a bear.

    FWIW. I’m all stocks. Of course I’m 15 years out, but I do plan on triggering the above plan when I’m 5-7 years away. And who knows what the interest rate environment will be then, but I’d hope to set up a CD ladder for liquidity in my initial retirement years. This would incur minimal income and would enable more tax efficient 401k conversions.

    Leave a comment:


  • Tinroofsundae
    started a topic Why should I not stay with 100% stocks?

    Why should I not stay with 100% stocks?

    So I have learned a tremendous amount in the last few years, thanks to WCI. Apparently I am a super saver. I have always been 100% stocks, recently moving to index funds, with a small number of legacy holdings. Aside from a small amount of cash and my house, I have no other asset classes. No bonds, no REIT's, no crypto, etc. The kids college is funded. No debt. I have maximized all available tax advantaged accounts. I plan to retire in roughly 5-10 yrs, but can comfortably do so now, using the 4% rule. The recommendation I hear everywhere is to have a certain percent in bonds or something more conservative. The rationale I hear is that in the event of a downturn, my spending will in effect be "selling low", putting a serious dent in my retirement savings just before or early in retirement. Now that I have roughed out a retirement spending plan, I feel I am overfunded, and can tolerate a major downturn. Having been through a couple downturns, I feel I would have the discipline to hold and not liquidate. I am not thrilled with how bonds and real estate look right now. Would it be reasonable to continue with 100% stocks at this point? If not, why?

    Thanks
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