Heading in to retirement in about 5 years. Have a significant retirement savings in Fidelity with only a few investments. Apple, Microsoft, Google, and Amazon. Have owned Ford, Lilly, IBM, Exxon, and others but always moved away from those outliers to the basic four stocks that represent 88% of my investments. Yes, crazy I know theoretically. About 12% of account in two Fidelity mutual funds. Performance over the last 10 years has been 23% rate of return, with the last year at 40% and very solid three and five year rates. This "planned" aggressive approach has worked very well, but watching a pullback of about 6% in the last week. When is it time for a change and should I absorb a possible 10% hit before pulling the plug?
I'm a dividend guy in retirement so bear with this question. In retirement will you need to rely on these 4 stocks to provide income to live on and if so do you have a plan to liquidate some of these stocks on a regular basis to provide that income?
Yes - I would have to liquidate. I want to move into something that would provide "income" without touching the principal other than necessary liquidations.
I would suggest when you are alone and past 75. I miss stock picking but I am not leaving a mess for someone if I have a long illness prior to checkout.
I depends. Could you survive a repeat of 2000-2001 If you say Yes then I probably would stay aggressive or slowly start moving to dividends.
Some advisers would say now is the time to start moving to a more balanced portfolio - or a lower risk portfolio. Typical balanced portfolio is some mix of bonds/equity. But there are a number of people on this forum who probably would never buy bonds - especially due to poor returns. They would rather have a mix of growth plus high quality dividend stocks.
You also don't say if this is in taxable or tax-deferred accounts. I'm assuming you have some really big gains over the past 10 years making so there will be tax implications.
I made changes based on knowing my numbers. I used to be 100% equities and did that for a long time.
Once I got within about 4 years of retirement ( I am now 2 years away) I started getting serious about what kind of income I wanted in retirement, what expenses I would have, how much I wanted to travel, etc and I built a budget. I used a number of the planning tools at Fidelity and elsewhere to get an understanding of what size pile I needed and what return I needed on that pile to make it all happen. I realized I could scale back on equities, decrease the bounciness in my portfolio and still meet my goals comfortably.