Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
Support MFO
Donate through PayPal
What justifies more than 20% of a portfolio in equities ?
Reply to @johnN: also what's interesting is IF you look at most target date MFs at major large institutions, they have ~ 50s% in equities even for those that are close to retirement
Hi Catch & All. Am near the end of a stay in the Marathon Fla part of the Keys. Taking noon time break here from sun and 80 degree heat. Just checked northern Mi forecast for our return Friday and looks like snow and rain mix. #%*!#*.
>>>>>Snow today here and more to the westerly side. Yesterday, the waves would have been large onto the beaches of Lake Michigan...45mph sustained winds.
Guess I'd start off asking Catch why he'd even consider putting 19.999% in equities if he believes they won't deliver a substantially better return than cash and bonds over his chosen time frame? After all, the latter 2 are certainly less volatile and more predictable. Less likely to get ya cussing or smashing things against the wall too.
>>>>>Now I always note the "inflation creep"; and it is here; so in theory, being in the proper equity sectors will provide some offset. And yes, one should not expect bonds and cash to outperform equities based upon the past; at least jumping backwards further than 10 years. I don't find a good path at this time that would allow our house to be devoid of equities in some sectors; but also a bit on the edge of having more than 20% at this time. We are having enough bumps with the equity sector cousins of high yield bonds.
Catch, you've hinted at what you consider your time frame or investment horizon - but am not sure what you consider it to be - maybe just missed it. At 65 I'm thinking in terms of 15-20 years - being in reasonably good health and disciplined about diet exercise, etc. Keep in mind too that most people don't need the $$ all at once, but take it out in small increments. That means shouldn't get hurt too bad if have to endure a 1-2 year bear market. Ain't any guarantees about any of this - either your own longevity or the future returns of equities. Having said that, gotta think most observers would expect stocks to out perform cash and bonds over the time span I mentioned, 15-20 years.
>>>>>Just clicked number 64 years on this third planet from the sun last week. Both of my family blood sides are/were into mid and late 80's; so, I have a rough guess as to time frame for money draws.
Everybody's different and I'd never second guess somebody else's decision. Myself, at last check couple months back, had around 40-50% equities counting what's in balanced funds. And, like you, got some additional holdings in junk bonds, so we got the old *** hanging out there a bit. Big chunk in TRRIX and my returns run close to theirs. Am lagging a little this year probably due to having avoided investment grade bonds which the fund holds. Am also overweight in natural resources, commodities, and foreign currencies compared to that fund - so get jerked around a little more by these.
hank, thank you for your time with this. I always appreciate your comments and thoughts.
Comments
also what's interesting is IF you look at most target date MFs at major large institutions, they have ~ 50s% in equities even for those that are close to retirement
http://www.google.com/finance?q=target+retirement+2010
Hi Catch & All. Am near the end of a stay in the Marathon Fla part of the Keys. Taking noon time break here from sun and 80 degree heat. Just checked northern Mi forecast for our return Friday and looks like snow and rain mix. #%*!#*.
>>>>>Snow today here and more to the westerly side. Yesterday, the waves would have been large onto the beaches of Lake Michigan...45mph sustained winds.
Guess I'd start off asking Catch why he'd even consider putting 19.999% in equities if he believes they won't deliver a substantially better return than cash and bonds over his chosen time frame? After all, the latter 2 are certainly less volatile and more predictable. Less likely to get ya cussing or smashing things against the wall too.
>>>>>Now I always note the "inflation creep"; and it is here; so in theory, being in the proper equity sectors will provide some offset. And yes, one should not expect bonds and cash to outperform equities based upon the past; at least jumping backwards further than 10 years. I don't find a good path at this time that would allow our house to be devoid of equities in some sectors; but also a bit on the edge of having more than 20% at this time. We are having enough bumps with the equity sector cousins of high yield bonds.
Catch, you've hinted at what you consider your time frame or investment horizon - but am not sure what you consider it to be - maybe just missed it. At 65 I'm thinking in terms of 15-20 years - being in reasonably good health and disciplined about diet exercise, etc. Keep in mind too that most people don't need the $$ all at once, but take it out in small increments. That means shouldn't get hurt too bad if have to endure a 1-2 year bear market. Ain't any guarantees about any of this - either your own longevity or the future returns of equities. Having said that, gotta think most observers would expect stocks to out perform cash and bonds over the time span I mentioned, 15-20 years.
>>>>>Just clicked number 64 years on this third planet from the sun last week. Both of my family blood sides are/were into mid and late 80's; so, I have a rough guess as to time frame for money draws.
Everybody's different and I'd never second guess somebody else's decision. Myself, at last check couple months back, had around 40-50% equities counting what's in balanced funds. And, like you, got some additional holdings in junk bonds, so we got the old *** hanging out there a bit. Big chunk in TRRIX and my returns run close to theirs. Am lagging a little this year probably due to having avoided investment grade bonds which the fund holds. Am also overweight in natural resources, commodities, and foreign currencies compared to that fund - so get jerked around a little more by these.
hank, thank you for your time with this. I always appreciate your comments and thoughts.
Safe return and take care.
Catch
Thank you for your time and thoughts.
Always a lot to chew upon, eh?
Take care of you and yours,
Catch