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Can't keep my balance!

#1
I've tried to keep a balanced portfolio over the years. Made a feint at 60-40-10 a few years ago, but those pesky equities kept going up, especially finance and tech. So, now I find myself at 71-24-5, which some might find sporty for a 69-year-old. I'm beginning to think the old 'subtract your age' from X (100, 110. you pick) is bunk. Looking at specific issues that drove growth, from BRK/B, V, $GLW to the FENG Stocks, I continue to like them, while bond funds are, well, meh. What are y'all thinking on this subject.
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#2
Simply put unless I am missing your point, this whole balance thing, at least in this current market is nearly worthless. I suppose one could say the bucket system is a form of balance, but certain not a thought out stock:bond:cash ratio system. More like cash for now (lower for example because of decent income stream), cash for 1-2 years, then 3-7 year investments, then risky-*** investments. 4 buckets
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#3
I'm sticking with my planned allocation. I went out-of-balance earlier this year and trimmed equity %. I rebalanced again when things went down. I found myself out-of-balance again and the discomfort was growing. So I trimmed again to get it back within my comfort zone. At this point, I'm simply holding the excess in my high-yield savings a/c. I might move it to a slightly higher return zone - maybe some broker-CDs or Treasuries maturing in 2 years.
 
I realize that I'll be missing out some gain if the bull continues on. But that is an acceptable and known outcome when I decided to switch to a balanced/diversified portfolio.
 
FWIW, I started tracking my portfolio with a more fancy allocation %. Instead of Stock:Bond:Cash, my high-level asset-classes are "conventional equity", "Stable cash-equivalent" and "Misc/Alternate". The 2nd one is watched most closely and it includes Investment-grade Bonds, CDs, cash, etc. The 3rd one includes a mix of Gold, Junk Bond, Preferred, REIT, Hi-Yield assets (mREIT/MLP), etc. You can tell that I love slicing and dicing my investments in many dimensions .
 
In your case, assuming you have enough cash-cushion in terms of actual $ figures as well as other income stream such as SS, you probably have a much higher range for each asset-class (i.e., instead of 60% stock, you maybe tolerant with 50-70% or even wider range.
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#4
Glad you gave your age, very difficult to respond without it since the answer is different case by case based on age and the size of the bean pile.  Will assume you have a substantial bean pile.
 
I am also 69, wife 66 and a very nice bean pile.  We have superior retirement income without really needing investment income.  I will be forced to take rmd's beginning next year, but we do not need it to get by well.  Middle of 2007, I went 100% cash.  At that time, could ladder out jumbo CD's for 5 years  at 4.5 to 5.75%.  Was not lucky or good, just decided where we were and were headed dictated that capital preservation was more important than appreciation.
 
As the short term cd's began to roll, eventually got back in a bit but we have only averaged about 10% return for the 7-8 years that followed primarily because investments were very conservative and still kept about half in cash earning peanuts.  Many would say we missed the boat.  We decided back then a yacht was not needed, the 42 foot cabin cruiser was adequate.  My Granny used to say "No need to be the richest man in the graveyard".
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#5
(11-22-2018, 03:01 AM)Ybserp Wrote: I'm sticking with my planned allocation. I went out-of-balance earlier this year and trimmed equity %. I rebalanced again when things went down. I found myself out-of-balance again and the discomfort was growing. So I trimmed again to get it back within my comfort zone. At this point, I'm simply holding the excess in my high-yield savings a/c. I might move it to a slightly higher return zone - maybe some broker-CDs or Treasuries maturing in 2 years.
 
I realize that I'll be missing out some gain if the bull continues on. But that is an acceptable and known outcome when I decided to switch to a balanced/diversified portfolio.
 
FWIW, I started tracking my portfolio with a more fancy allocation %. Instead of Stock:Bond:Cash, my high-level asset-classes are "conventional equity", "Stable cash-equivalent" and "Misc/Alternate". The 2nd one is watched most closely and it includes Investment-grade Bonds, CDs, cash, etc. The 3rd one includes a mix of Gold, Junk Bond, Preferred, REIT, Hi-Yield assets (mREIT/MLP), etc. You can tell that I love slicing and dicing my investments in many dimensions .
 
In your case, assuming you have enough cash-cushion in terms of actual $ figures as well as other income stream such as SS, you probably have a much higher range for each asset-class (i.e., instead of 60% stock, you maybe tolerant with 50-70% or even wider range.

I like the idea of naming your own allocation components.  I think mine would be "underperformers," "egg on my face," and "how did I ever choose that dog?"
 
Or maybe consumable cash, dry powder, income, and GARP
 
I like the idea of Growth at a Reasonable Price.  It fits with my thought that "Growth/Value" is not a realistic split.  Better are Growth/Income and Value/Momentum,
     **  GARP is the Growth, Value quadrant.  
     **  Growth, Momentum quadrant is Amazon/FANG/NVidia etc.  ("Growth At Any Price" or GAAP ?)
     **  Income, Value would be an AT&T kind of company, These tend to "channel";  I try to accumulate low and trim high
     **  Income, Momentum is sparsely populated.  Maybe STX emphasizing income, or AAPL emphasizing momentum
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#6
I realized that given the different types of sub-assets I ended up owning, mostly thru ETFs, the basic Stock/Bond/Cash naming lost its meaning for my purpose. Some of my thinking evolved as a result of various discussions on the forum (e.g., I remember an old discussion with you where you mentioned that you too have trouble with viewing junk-Bond as Bond in the traditional sense of Bonds). So the custom naming based on core characteristic/goal of each broad allocation works much better for me. It a bit more work, but mostly one-time as I seldom change my holdings.
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#7
The whole idea behind the "100-Age" allocation theory is to assign the appropriate risk as you age - it is a general formula and theory for the "average" investor. Your own individual allocation will vary from the general. The market has done well so your equity component has out shined your bond/fixed component. But remember, we're talking averages here. If the market takes a slide, you will wish you stayed in the "100-Age" but it will be too late and at higher ages you will not have the luxury of time to recover. "All glory is fleeting."
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#8
Balance? Since retirement now over a year now for me there's only cash and either being in or out of the market. Right now am 99.5% in the market with only 25% in equities, rest in options participating recently in all the excitement over TLRY. It's been and is a wild ride and hopefully within the next 2 weeks will not get thrown and will be able walk this horse back to the barn

Thanks for this thread. Looked and am in 63% short term, 36% domestic equities (largest holdings MCD and TSLA) in large cap value companies for investments and 4% unknown.

I did not want to be in this position by the way. It was purely accidental because of a mistake I made selling a call instead of selling a put on TLRY which promptly rocketed up 35% just an hour or so later when I caught the mistake. Good grief!

It took about 15 trades and several hours this AM to claw out of that pit. If TLRY holds up through next week then I can walk the horse back to the barn with a smile on my face.

Good grief! At 62 and having had experience trading /buying stocks since age 10 you would think I would be more careful...Sad

I like to have at least 15% cash on hand.
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