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

[Tangler]

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:

[VentAlarm]

I’m in my mid 30s with a retirement account of about 500k and an income of 300k, so I’ve got a long way to go - as such, I’m 100% equities. Basically cap weighted total world stock fund.

[Tangler]

I’m in my mid 30s with a retirement account of about 500k and an income of 300k, so I’ve got a long way to go - as such, I’m 100% equities. Basically cap weighted total world stock fund.

Yes, it depends on age and stage, but I am planning to stick to mostly (>80%) stocks for the long run.

[Lordosis]

I am in a similar boat to VentAlarm . I have time on my side so I am heavy equity. I do have some bonds but it is just about 10%. The current situation is not going to change anything for me. I bought 20K of VTSAX yesterday and I will do so again next time the bank account fills up.

Also I think we should call them Tangler style polls. You have been polling much more frequently than I have!

[dataentryspecialist]

I voted 90% plus stocks, but I’ve got some (about 15%) REIT exposure via private REITs which should in theory should act as an inflation hedge, though I suspect near term underperformance depending on what interest rates do. I only have about 3% cash, mostly in money market and floating rate corporates. I am mid 30s currently. If I could find long-ish maturity fixed income that was yielding decently, I’d be tempted to allocate 10% or so to that.

Unfortunately, by nature, stagflation is horrible for all asset classes. I’m afraid we might get our 5-7% nominal equities returns in the context of 4-5% inflation, especially if the Fed has to drop the FFRs to avoid a banking crisis. I’m totally prepared for 10 years of 1-2% real equities returns.

[Touchdown]

I’m shooting for 70% equity. Based on returns so far this year and the fact that my 403b is majority purchasing International stocks and my monthly taxable purchases are all TSM at the moment I’m probably slightly over 30% bonds.

[Random1]

I have decreased my equity ratio due to pending retirement. I am about 65/35 now, with most of the 35% in short term funds until I start to see a reversal of the yield curve.

[JBME]

your AA should have more to do with whether you are retired or not, or your time until you pull the plug and retire. Anyone who is 10+ years from retirement, in my view, should be at least 80% equities. We are normally 90/10. When the market has dived, I have "timed the market" and changed the AA to 95/5 when the S&P is 15%+ lower than it's high. But once it has increased ~5-10% from that low point, I go back to 90/10. This is hardly moving the needle. I'm not sure when we'll go less than 90% equities. Anywhere between 13-24 years away from retirement here

[NumberWhizMD]

Similar to VentAlarm and Lordosis, with about 95% bonds, mid-30s. I'm learning to be patient, as my first couple of years of investing were phenomenal. Despite watching numbers go down, we continue to put money into stocks waiting for the market to improve. Luckily we are in a position where we can wait, and I have to trust that the market will respond as it has in the past.

[VagabondMD]

I am a rolling 3-5 years from retirement from Career 2.0 job, as I have been for the last several years. I am about 65/35, with a small-value tilt and fixed income allocation that has always been titled to short duration.

[Bmac]

I am a rolling 3-5 years from retirement from Career 2.0 job, as I have been for the last several years. I am about 65/35, with a small-value tilt and fixed income allocation that has always been titled to short duration.

Pretty similar with me being retired but spouse still working at 0.5 FTE for uncertain time in the future. 65% equities. Lots of munis (intermediate) throwing off tax-exempt dividends and decent cash buildup for SORR. Also have started Roth conversions.

[bovie]

Stocks for the long run.

[Tangler]

I am a rolling 3-5 years from retirement from Career 2.0 job, as I have been for the last several years. I am about 65/35, with a small-value tilt and fixed income allocation that has always been titled to short duration.

Awesomeness!

Thanks for responding!

Glad to hear career 2.0 is going well and that you still have a small value tilt. (similar to me!!)

I am FI and working “part time” for fun and fulfillment.

Once you are FI you have won the game and Bernstein says you should stop playing, which is a sound argument.

De-risk when you are near retirement.

Build a bond tent, cash bucket etc for SORR.

Seems intelligent and reasonable and i am working on my cash bucket.

However, if you still have income from job 2.0 then you still are using human capital and that income is very bond-like.

You basically can postpone de-risking and hold a higher stock allocation.

Personal finance is personal and 60-70% stocks is fine and those bonds might smooth the ride, so hard to argue with it.

If you have 5 years of “cash” + flexibility of working part time + large pile in taxable, you are pretty bulletproof IMO.

I am probably a little silly but my situation:
Age 50, no debt, 1-5 years from retirement, >95% stocks, working part time/per diem. total assets >5M, spending 120-150k. “Part time” income between 200-400k/year.

Want to have 600-800k in cash bucket when i totally retire (currently have 250k)

[Tangler]

Stocks for the long run.

Yes! Roger that!

[Tangler]

Pretty similar with me being retired but spouse still working at 0.5 FTE for uncertain time in the future. 65% equities. Lots of munis (intermediate) throwing off tax-exempt dividends and decent cash buildup for SORR. Also have started Roth conversions.

Nice!