Backbone needed to beat inflation? What is your AA in terms of stock percentage?

[triad]

i'm FIRE and 70% equities. of the bonds, 25% is either TIPS or 6 month treasuries and the remaining 5% is long treasuries

[pit.alumni]

I'm in the retirement phase and only about 40% equities but have another 35% in investment RE and 25% bonds. My stock bond portion alone is 65/35 but the RE dilutes it. I didn't really plan it this way, rather the leveraged RE appreciated well beyond the stock market and became a larger percent. I'm quite fine with it and it provides a nice monthly income. Wouldn't make sense to rebalance between transaction costs and the tax hit, if anything I'd just 1031. The RE also provides a good inflation hedge as rents generally increase at least 3%/year and sometimes quite a bit more.

[ShredtheGnar]

85% equities. 15% bonds with mix of HY CEF that uses leverage, HY ultra short term international Index ETF, HY junk bond index ETF. Mostly held in tax advantaged accounts. None in a TBM. Highest yield is around 13-14%. Market timing was utilized with bond fund purchases. Will see how this works out.

[Hank]

Depends a lot on how you frame the question. For equities, we’re at about 7% bonds, 93% stock. (We have an account where the most aggressive asset allocation available is Vanguard Balanced Index fund. Thus the bonds.)

If you roll in net equity in investment real estate, we have about 22% of overall portfolio in real estate. The other numbers above dilute down to 5.3% bonds and 72.7% stock.

Equity in our primary residence is part of net worth, but our house is more of a consumption item rather than a pure investment. Equity in the house would further dilute the percent of stocks, bonds, and investment real estate. We also could add in cars, clothes, jewelry, fine art, tacky art (dogs playing poker anyone?) and various household furnishings. But by that point, we’re talking about percent of net worth rather than asset allocation in an investment portfolio.

What’s your net worth, what’s your asset allocation, how many properties do you own? At a certain point, the answer becomes “it depends”.

[dataentryspecialist]

85% equities. 15% bonds with mix of HY CEF that uses leverage, HY ultra short term international Index ETF, HY junk bond index ETF. Mostly held in tax advantaged accounts. None in a TBM. Highest yield is around 13-14%. Market timing was utilized with bond fund purchases. Will see how this works out.

Out of curiosity, what HY etf are you using? I have been looking at buying SPHY in tax deferred as somewhat of a contrarian play.

[ShredtheGnar]

Out of curiosity, what HY etf are you using? I have been looking at buying SPHY in tax deferred as somewhat of a contrarian play.

PGHY for global and XCCC for junk

[Tangler]

Depends a lot on how you frame the question. For equities, we’re at about 7% bonds, 93% stock. (We have an account where the most aggressive asset allocation available is Vanguard Balanced Index fund. Thus the bonds.)

If you roll in net equity in investment real estate, we have about 22% of overall portfolio in real estate. The other numbers above dilute down to 5.3% bonds and 72.7% stock.

Equity in our primary residence is part of net worth, but our house is more of a consumption item rather than a pure investment. Equity in the house would further dilute the percent of stocks, bonds, and investment real estate. We also could add in cars, clothes, jewelry, fine art, tacky art (dogs playing poker anyone?) and various household furnishings. But by that point, we’re talking about percent of net worth rather than asset allocation in an investment portfolio.

What’s your net worth, what’s your asset allocation, how many properties do you own? At a certain point, the answer becomes “it depends”.

Good points. Agree. It certainly depends on how you look at things.

I could/should have said, excluding your primary residence although your primary residence is certainly important for net worth and owning it is different than having a giant mortgage.

[Tangler]

I'm in the retirement phase and only about 40% equities but have another 35% in investment RE and 25% bonds. My stock bond portion alone is 65/35 but the RE dilutes it. I didn't really plan it this way, rather the leveraged RE appreciated well beyond the stock market and became a larger percent. I'm quite fine with it and it provides a nice monthly income. Wouldn't make sense to rebalance between transaction costs and the tax hit, if anything I'd just 1031. The RE also provides a good inflation hedge as rents generally increase at least 3%/year and sometimes quite a bit more.

Real estate is an outstanding inflation hedge and has a lot of tax advantages. It requires skill and knowledge and/or energy and time to acquire skill and knowledge and the market seems less efficient that just buying some stock index funds, thus many docs are at an informational disadvantage.

RE is certainly a good investment and it adds diversification.

I probably should add some at some point.

Although a great investment, it is not as simple and I like simplicity.

[billy]

20 % bonds/cash, mid 40s (ehhh. really want to say early 40s but closer to mid than early), still working but only 4 days/week, hitting my financial goals despite having to build up a huge efund over the past few years that is now slowly getting invested instead.
Rent, decent net worth (at my goal for this age), no debt, paid off student loans.

[MPMD]

early 40s.

100% equities.

no plans to change any time soon.

[The White Coat Investor]

Well, 60% stocks but I'd add in another 20% of risky assets (real estate) since that's what you're getting at. And yes, I just stay the course with it.

[Tim]

Lordosis style poll: May 2023 (sell in May and go away?) Grow a backbone (keeping it PG here) and hold those stocks?

Lots of "fear" out there in the media and here also.

Buffett famously said: "be greedy when people are fearful and fearful when people are greedy" but perhaps "this time is different"?


Bonds yields are more attractive now that rates have increased but is this an illusion?

Meaning, they are still going to lag inflation and thus in the long run leave you with less.

Stock index funds (ETFs) are my inflation "hedge".

I attempt to hold for the long run and ignore the news = noise.

Anyway my simple question for the crowd is: Forum Nerds: What percentage of your asset allocation (AA) is in stocks:

You need an option for someone that holds an amount rather than a percentage. That percentage is the result of how your inflation "hedge" performs.

No changes other than percentage.

[Tangler]

Well, 60% stocks but I'd add in another 20% of risky assets (real estate) since that's what you're getting at. And yes, I just stay the course with it.

Seems solid. 80% stocks + real estate is a very sound foundation. Also, you have income from medicine & a business that helps people, so great income from meaningful work.
Pretty awesome IMO.

[Tangler]

You need an option for someone that holds an amount rather than a percentage. That percentage is the result of how your inflation "hedge" performs.

No changes other than percentage.

I hear what you are saying but I am not sure how I would word the choices.

What you say is correct.
Example if you are 10% cash & 90% stock index funds that sounds risky but if you tell me your total AA is 10M that means you have 1M in cash and 9M in stocks, and if you spend say 150k per year then you are not really at risk of blowing up, regardless of age or anything else.

If on the other hand you are newly retired at 65 with no pension and spend 200k per year and have a net worth of 2M and you are 90% stocks, 10% cash then that is a less secure place and I would be more concerned.

It depends, is usually the answer to most AA questions.

[Tangler]

early 40s.

100% equities.

no plans to change any time soon.

This seems to be the profile of a lot of the folks here.
Age 33-50, AA >80% stocks /real estate.