what's the damage 1-22-22?

[fire2026]

And if they don't?

Will continue to look forward deals out side the market, in RE

the tax deferred accounts will keep getting the inflow into equities

[Hatton]

I'm going to put cash to work next month whether markets go down 10%, up 10%, or do nothing. Am I the only one earning and saving every month? Why do so many people feel the need to hold money out of the market? Are you afraid they're the last dollars you'll ever earn or something? Chances are that right now is the best chance you'll have the rest of your life to get prices like these. If not today, almost surely that day is within the next few weeks or months. All those people that held cash in April, May, then June 2020? We'll probably never get back to those prices. I've "bought high" many times but you know what? Now most of those times look an awful lot like buying low.

I have a 4-5% cash position for 2 reasons. One as a retired doc this is where I get the money to fund my retirement spending. Two as a buffer to lessen any Sequence of return issues. Having a cash buffer means that I have not worried about the market much at all since I retired. I follow it but have not worried about it.

[Tim]

I'm going to put cash to work next month whether markets go down 10%, up 10%, or do nothing. Am I the only one earning and saving every month? Why do so many people feel the need to hold money out of the market? Are you afraid they're the last dollars you'll ever earn or something? Chances are that right now is the best chance you'll have the rest of your life to get prices like these. If not today, almost surely that day is within the next few weeks or months. All those people that held cash in April, May, then June 2020? We'll probably never get back to those prices. I've "bought high" many times but you know what? Now most of those times look an awful lot like buying low.

The problem is a tendency to follow the “smart money”.. This includes the members here,WCI, blogs, and respected authors.
“But I’m now in my 70s and more interested in financial survival, which is why today I keep at least 20 years of living expenses in bonds and cash investments.”
This was in an article about risk assessment. Taken alone as a rule of thumb, that means the goal is enough bonds/cash to last until one is 90 years old is the IPS. Conflicting goals, putting money to work vs risk. It is easy to write this goal, but much harder plot the course. It is very easy in hindsight for those that have “won the game and stopped playing”.
https://humbledollar.com/2022/01/a-day-to-remember/
William Bernstein.
Yes, everyone would love to have cash/bonds to last until 90. Few will achieve that goal by 70. By definition, you have to have won the game to not have a behavioral conflict. Too much risk or not enough! There is a huge gap between SORR (3-5 years ) and cash/bonds until 90. Risk tolerance is the problem, of course. It is not necessarily market timing. Conflicting goals as well. Most can’t have both.
I don’t fault anyone for holding cash if it keeps them on a plan. Appreciate all you have done. And your recent postings. Food for thought.

[Tangler]

I have a 4-5% cash position for 2 reasons. One as a retired doc this is where I get the money to fund my retirement spending. Two as a buffer to lessen any Sequence of return issues. Having a cash buffer means that I have not worried about the market much at all since I retired. I follow it but have not worried about it.

Having cash as a recently retired doc strikes me as extremely intelligent behavior. A cash bucket = EF + SORR antidote + sleep aid.
I will follow in Hatton’s footsteps in a few years.

[Kamban]

I am surprised at some of the members of this group lamenting their 5% or 10% decline in their portfolio. What did they expect the stock market to do? Go up vertically all the time?. We have had 15-30% annual returns year after year since 2010. It is time to bring the overvalued stocks to Earth and that is what is happening.

Go ahead and do the tax loss harvesting and all little things that will make you happy. But don't make the mistake of sitting on cash, because when the train starts and gets going it will leave you behind and you will be sitting on cash with inflation losing its value. Get the diversity into real estate only if you understand it and that it too can have downturns and lose its value.

Speaking from experience, the best thing to do is to ignore all this noise and stay the course. Invest as you naturally would. If you have extra money , invest it. And just go about your life. Look at it with a 5 or 10 year outlook. Not as a 5 or 10 week outlook.

[Lordosis]

You are only down if you sell low. No panic selling here.

You are also down if you sit in cash and miss out on gains.

[TheDangerZone]

Am I the only one earning and saving every month?

No, you are not the only one! All my monthly investments are automated and when my quarterly bonus comes in, I dump substantial portion into taxable. The only cash I keep is my EF and a PSLF side fund. I pay less attention to the balances when the market is dropping, but I do log in to check TLH opportunities and took advantage of some on Friday. Many thanks to you and other authors/resources that remind us the context of corrections, recessions, risk tolerance, asset allocation and to stay the course.

[TheDangerZone]

I had 100k earmarked for loans so far to bolus when the forebearance was over, then this evolved to, maybe i can get a better return on the money and take all my excess savings and put it in taxable and then refinance my loans and in 5 years see where my taxable acct was hoping to double my cash and then sell half and pay off the remainder of my loans.

I dunno if its the right idea but only time will tell.

I sincerely hope it works out for you. I would not have the risk tolerance for that. Regardless of whether or not it works out, hopefully this will be a learning experience.

[Tangler]

You are also down if you sit in cash and miss out on gains.

Very true.

Young + cash = fool. (oversimplification but true)

Put it to work & let it compound.

Much depends on age & stage.
If you are young and hoarding cash you should invest it and turn off the noise.

If you are older and have millions in stocks having a cash bucket is intelligent.

Once you have >4M in stocks and you are at or near retirement a cash bucket is not lost opportunity, it is insurance and a buffer.

The 34 year old new attending should probably be close to 100% stocks and have very little cash.

This young doc is an income machine! = bond.
She has human capital = bond-like income for years to come.

The retired doc has lost that potential energy. It has been converted to a giant nest egg of mostly stocks.

Hatton won. She has no reason to be 100% stocks.

At 3-5 years from retirement I am closer to Hatton than I am to the young doc.

[jz-]

We are newly FATretired with an 85/8/7 portfolio. The current drawdown is 9%.
The taxable portfolios skew large cap growth, which minimizes taxation.

The drawdowns/recoveries are each interesting in their unique ways, but no longer meddle with me.
My current discipline is to avoid investing the cash beyond tiny experimental ways. We can wait out a 5-7 year drawdown if I resist these low-priced temptations.

[Yowza]

Looking forward to buying things on sale when my 401K profit sharing contributions for 2021 go in this week!

[The White Coat Investor]

I have a 4-5% cash position for 2 reasons. One as a retired doc this is where I get the money to fund my retirement spending. Two as a buffer to lessen any Sequence of return issues. Having a cash buffer means that I have not worried about the market much at all since I retired. I follow it but have not worried about it.

I don't have a problem with people who have cash in their AA. I don't. My parents do (for similar reasons to you). No biggie. What I don't do though is purposely hold cash out in hopes of an "opportunity". I think the cash drag outweighs the benefit from opportunities. I have cash every month coming in. I invest it when I get it.

[Hatton]

I don't have a problem with people who have cash in their AA. I don't. My parents do (for similar reasons to you). No biggie. What I don't do though is purposely hold cash out in hopes of an "opportunity". I think the cash drag outweighs the benefit from opportunities. I have cash every month coming in. I invest it when I get it.

I did the same when I was still working.

[MPMD]

beanie babies holding strong.
who's laughing now?

[Notsobad]

I'm going to put cash to work next month whether markets go down 10%, up 10%, or do nothing. Am I the only one earning and saving every month? Why do so many people feel the need to hold money out of the market? Are you afraid they're the last dollars you'll ever earn or something? Chances are that right now is the best chance you'll have the rest of your life to get prices like these. If not today, almost surely that day is within the next few weeks or months. All those people that held cash in April, May, then June 2020? We'll probably never get back to those prices. I've "bought high" many times but you know what? Now most of those times look an awful lot like buying low.

The only time I have excess cash is in April or May, when we finally get our K-1 and get the final tax tally. I have usually estimated reasonably well, but I keep a chunk cash extra to pay the bill if it is due.

the only point of trying to get the “best” timing to buy is so you can increase the chances of feeling bad. Ignoring the noise in 2009 and 2020 served me well. A lot of people capitalized and made a lot more than me, but many times more did worse with panic moves.