@Roy, think you are doing the right thing by reduce equity risk as you approach retirement. Five years out is not far away. Shifting more to balanced/allocation funds is another way to increase bond allocation. My high yield and bank loan funds have done well this year; YTD is about 5%. Likely these funds will have a solid year by year end. The rest of short term high quality bond funds are moving along well yielding 5%.
Watching if the market will broaden out more to smaller caps and cyclicals. If the recession strikes this year, bonds will serve as a ballast when stocks will fall.

The largest chunk by far of our investments have been in TRAIX/PRWCX for the past ~16-17 years, so the recent move to reduce some of those holdings was a bit difficult because of the emotional attachment as well as the FOMO on future equity gains. We are now roughly 50/50 equity/fixed income---still sufficient equity exposure for growth and nice dividend income from the MM/bond side. Our equity exposure had already been down the past 1 1/2 years as some money my wife inherited had been placed in fixed income rather than TRAIX/PRWCX.
Would be interested to know at what age many of you started reducing equity exposure as you neared retirement? I am 60 very soon.

It’s not just “stuff” that has risen in price. Services also. Car towing to the repair shop was more than double what I paid 3-4 years ago, to say nothing of the big check I just wrote to the septic tank pumper, 40-50% higher than five years ago. I am, however, grateful to have someone to haul my s#&t away!

- You mean that Accord bit the dust?
- Yep. That’s a job I’d not want - at any price.
:)

I bought a 6 month CD today from Wells Fargo, that pays 5.3%. I do still have some money remaining from the recent CDs that matured, and have 2 additional CDs maturing in a few weeks, but I have not made a decision what I will do with those monies. For now, I prefer to stay shorter term with my investments, and see what happens when/if the FEDs hike rates a couple more times, as is widely expected.

@Roy, think you are doing the right thing by reduce equity risk as you approach retirement. Five years out is not far away. Shifting more to balanced/allocation funds is another way to increase bond allocation. My high yield and bank loan funds have done well this year; YTD is about 5%. Likely these funds will have a solid year by year end. The rest of short term high quality bond funds are moving along well yielding 5%.
Watching if the market will broaden out more to smaller caps and cyclicals. If the recession strikes this year, bonds will serve as a ballast when stocks will fall.

It’s not just “stuff” that has risen in price. Services also. Car towing to the repair shop was more than double what I paid 3-4 years ago, to say nothing of the big check I just wrote to the septic tank pumper, 40-50% higher than five years ago. I am, however, grateful to have someone to haul my s#&t away!

Short-term redemption fees are preferable over higher expense ratios.
GoodHaven is a concentrated fund (24 holdings, 65% in top 10) with low turnover.
Excessive redemptions can be very detrimental to this fund's strategy.
If an investor is unwilling to commit to a mutual fund for 60 days,
perhaps they will be better served with an ETF?

July MFO covered GOODX. For those interested in exploring this fund, it has a 2% short term redemption fees <60 days and is a TF fund at the major brokerages I checked. While I understand why a fund would have a 2% lock up fees, I would rather they charge me a higher ER than a 2% lock up fees.
Over the past 3 years, the fund has gathered close to zero inflows while delivering 80% in cumulative total return. Given the fund's recent good performance, and if we were to believe that the bear market is over, the fund should not worry about short term redemptions and can gather a lot of AUM (currently below <$125M) if they were to get rid of the lock up fees. Prior to the change in fund strategy three years ago, the fund had approx $70M in AUM, after steady outflows for years. I always thought short term redemption fees are a good substitute for closing a fund. Is that what the fund manager trying to accomplish?
May be @David (David Snowball) could convey the above to the fund manager or invite them to read this post.
P.S.: I currently do not have a dedicated mid cap fund but would invest in GOODX if there was no STR fees.

Recently reduced our equity exposure by ~6-7% and placed those funds into MM and bond funds. Probably within 5 years of beginning portfolio withdrawals and trying to find a personal comfort zone with volatility as we are in a good position for retirement at this time.
Most of you can probably take this as a contrarian signal and load up on equities!! :)

@dtconroe...your question reminds me of a convo I had with my comptroller several years ago...he asked me "what are you going to do when your CDs roll off and the interest rates are lower". I answered I'll make a decision then with the facts and my interpretation of them as I see fit.
You've done well the past year without the ups/downs that the folks in the market have, likely a little better than SPY without the drawdown, not too shabby.
It all depends though...most dangerous times in the market are when overvalued, lot of debt floating around everywhere, and investing in the market is very risky several years right before/after you retire, especially if you do not have a govt pension.
FWIW, I've been 90%+ in laddered Tbills/CDs the past year(s), no regrets, so what if NVDA had a moonshot return the past several weeks, I tip my hat to the folks who invested there, I still earned several years of my annual spend/expenses with the interest from the Tbills....I still dabble with some funds (PVCMX, MRFOX & BLNDX lately) to satisfy my itch to "do something".
Me, what I am doing, going to buy 6 month, 1 yr and 2 yr Tbills/Notes when they auction over the next couple weeks. I'll step into the market with more "real" monies if we see a -15, -20%+ schmeissing over the next several months.
Good Health and Good Luck to you, no matter what you decide to do,
Baseball Fan

@dt, @larryB, et al.: I'm in Treasury bills and not CDs, but the decision-making structure is about the same. For now I've passed on the fairly tempting 2y T and haven't replaced bills with bills, but instead have been stuffing maturing T's into a 4.94% money market and building a still-small bond etf sub-portfolio. Port yield is a shade over 5%, with most of that coming from hold-to-maturity T bills.
I'm encouraged so far by how well the bond etf sub-port is holding up.

Yeah, small-cap funds tend to be more volatile.
VTMSX is my only dedicated small-cap fund.
I ran Portfolio X-Ray for the period ending June 30 earlier today.
VTMSX constitutes 7.7% of my portfolio.

Old Ted mentioned that he'd not worry about the performance of a holding that constituted less than 5% of his stuff. I'd not give a small-cap fund any more than such minimal room along with my other stuff.
But I wish you well with it. I hope you don't need Vanguard's customer "service."

Thanks!
I've owned VTMSX for ~10.75 years.
The fund's longer-term performance has been good when compared to
the small-blend category (10 Yr. - top 8%; 15 Yr. - top 11%).
VTMSX returns have lagged S&P 500 returns during these periods since large caps were in favor.
I don't need to contact Vanguard customer service often but it's definitely not something I look forward to!

Keeping up with DepositAccount.com for going rates and timetables for CDs. Trying to keep parent's cds to 1 year to 2 year timetables with rates between 4%-5% at our credit unions. Will evaluate the CD market as the CDs' approach maturity.

@dt. I have been been overweight CD’s since early 22 as well. I have become very comfortable with a risk free 5% and find that it suits me well. I am torn between going out as far as I can and still be real close to 5% or slowly returning to a more diverse mixture of dividend stocks and income producers that might do well when the pivot arrives. It’s on my mind but meanwhile life is good at 5%.

Thanks larryb, your comments are very similar to what I am now evaluating. I am not committed to CDs for a long period of time, and am now questioning how much longer I actually want to continue investing in CDs, compared to other types of investments. I was quite content with bond oef investing, until the FEDs started raising rates, which was very negative for my bond oef portfolio. I chose to use CDs as a transitional choice, so I could re-evaluate, what I wanted to do with my retirement portfolio. I do not like the illiquid aspect of brokerage CDs, because selling them before they mature, is very costly. Now I am facing shorter term CDs maturing, and I am uncertain if I really want to lock in more longer term CDs for the future. I am content with 5% CDs, and there are still an ample supply for me to choose from 6 months to 2 years, but some categories of bond oefs are starting to look attractive again. Hence, I am now evaluating whether I want to continue a "laddering" approacch to renewing CDs, or whether I want to start developing a more diversified portfolio that reduces my CD holdings. I have not made a final decision, but continuing portfolio of longer term CD holdings was not part of plans in 2022.
I thought that possibly a few other posters might be experiencing the same investing decision, but was not sure. If so, I was interested in what others thought was attractive/acceptable to renew CDs, vs replacing them with other investing options. Hence my question in my initial post on the thread:
"For those continuing to have a desire to invest in CDs, I would be curious as to what you consider as attractive rates to maintain your investing interest."

Yeah, small-cap funds tend to be more volatile.
VTMSX is my only dedicated small-cap fund.
I ran Portfolio X-Ray for the period ending June 30 earlier today.
VTMSX constitutes 7.7% of my portfolio.

Old Ted mentioned that he'd not worry about the performance of a holding that constituted less than 5% of his stuff. I'd not give a small-cap fund any more than such minimal room along with my other stuff.
But I wish you well with it. I hope you don't need Vanguard's customer "service."

I can't stand the small-cap funds' volatility anymore. I do own a "small/value" single stock in my BHB. Ordering-up more shares tomorrow (3rd) or 5th of July.

BTW, applying a similar roll yield calculation for Treasuries doesn't yield a clear cut answer.
As of 6/30/23 EOD:
1-yr 5.40%
2-yr 4.87%
3-yr 4.49%
Breakeven yield 4.035%
So, if 2-yr 1 yr from now will be > 4.035% (it is 4.87% now), then buy 1-yr now and roll into 2-yr on maturity (likely). Else, buy 3-yr now (less likely). Or, it could be just a toss-up.
The picture may become more clear as the Fed raises rate twice (?).

@dt. I have been been overweight CD’s since early 22 as well. I have become very comfortable with a risk free 5% and find that it suits me well. I am torn between going out as far as I can and still be real close to 5% or slowly returning to a more diverse mixture of dividend stocks and income producers that might do well when the pivot arrives. It’s on my mind but meanwhile life is good at 5%.

From somebody who follows CD rates very closely and has a sizeable CD ladder:
Correction to what you stated in the OP:
2- and 3-yr CD rates have recently been inching UP, NOT DOWN.
I've replied to you a few times over the years about this topic and once in the past few months. You don't seem to appreciate my input on this topic, but I'll try it one more time, especially for those who might.
It's all pretty simple if you paint by numbers, so to speak. Translation, create a very basic EXCEL spreadsheet and drop in the variable numbers.
Here are the BEST current CD rates for Fido, non-callable CDs.
1-yr: 5.25%
2-yr: 4.95%
3-yr: 4.80%
Example:
You want to invest in non-callable, interest bearing instruments for 3 years.
You BUY a $10,000, 1-yr, non-callable CD at 5.25%
At maturity in ONE year in July 2024, you earned $525.
You could have instead BOUGHT a 3-yr, non-callable CD at 4.80%
At maturity in THREE years in July 2026, you would have earned ($480 x 3 or) $1,440.
In order to break even with the currently available 3-yr CD rate, at maturity of the 1-yr CD in July 2024, you will need to BUY a 2-yr CD paying 4.58%.
($525+$458+$458 = $1,441)
(NOTE: You could also BUY a 1-yr in July 2024, and another 1-yr in July 2025, but I'll leave that scenario and math up to you.)
So, in this example,
(1) If you THINK a 2-yr, non-callable 4.58% or greater CD will be available in July 2024, BUY the 1-yr now.
(2) If you DON'T THINK a 2-yr, non-callable 4.58% or greater CD will be available in July 2024, BUY the 3-yr now.
For my money, the decision is easy. BUY the 3-yr NOW as IMO it is unlikely a 2-yr, 4.58% non-callable CD will be available in July 2024. And even if it is, IMO it won't be sufficiently greater than 4.58% to cause me to let the current 3-yr rate of 4.80% get away from me.
Disclaimer: This ain't idle chat. It's what I'm actually doing, and have been doing, for the past six months.

I stumbled across an informative article today discussing Markowitz's contributions to investment theory.
"Markowitz agreed with Williams’s approach to valuing individual investments. It was far better than the old prudent man approach. But Markowitz still saw it as incomplete. The shortcoming: While it’s important to evaluate individual investments, it’s equally important—if not more so—to consider how a collection of investments will work together in a portfolio. Markowitz was the first, in other words, to show investors how to effectively diversify a portfolio."
"In his 1959 book, Portfolio Selection, adapted from his thesis, Markowitz provided this example: 'A portfolio with sixty different railway securities, for example, would not be as well diversified as the same size portfolio with some railroad, some public utility, mining, various sorts of manufacturing, etc. The reason is that it is generally more likely for firms within the same industry to do poorly at the same time than for firms in dissimilar industries.'”

"As noted above, today this might seem obvious. But before Markowitz, it had never occurred to anyone. And it wasn’t just a casual observation. Portfolio Selection runs more than 300 pages and is dense with formulas. In it, Markowitz provided a framework for building optimal portfolios—those that offered either the maximum possible return for a given level of risk, or the least possible risk for a given level of return. Markowitz called these portfolios 'efficient,' and presented them visually in a diagram he called the efficient frontier."
Link

I have invested heavily in CDs since March of 2022. Many of those CDs are now maturing, and I have decisions to make about investing in new CDs. Rates seem to be flattening recently, and rates for CDs longer than 2 years seem to be dropping. The best rates are shorter term, 3 months to 1 year, paying a little over 5%. CDs from 18 months to 2 year are around 5%, and anything longer is less than 5%. When I look at the future, there does not seem to be a strong appetite for any major rate increases, with most projections thinking we may get 2 more .25% rate increases in the second half of 2023. I am now thinking about going out to about 18 months to 2 years for a CD paying 5% or more, but continuing to renew CDs for 6 months to a year, when they are at 5.25% or more. I currently am hesitant to invest in longer term CDs that are paying below 5%.
For those continuing to have a desire to invest in CDs, I would be curious as to what you consider as attractive rates to maintain your investing interest.