Investing Strategies. What is your move?

[GMFan]

The media wants us divided against eachother. Keeps us distracted from what’s really going on.

As far as investing - nothing has changed since I started working. I invest in boring mutual funds and contribute regularly despite what the latest headlines or economic rumors are.

 

[JeffKeryk]

I'm in conservative growth since I'm not a risk taker but it's not growing as fast as inflation.

At a certain point in one's investing career, it is more important to not lose to much instead of the bigger gain risks.
Or at least have a "safety stock" amount in conservative products. That's what I do.
Regarding keeping up with inflation, that's why I focus on minimizing recurring costs. It's a good inflation hedge strategy.

 

[Dean]

I‘ve had what most folks would consider an unreasonable amount of cash since 2008. And I’ve gotten mostly out and mostly back in to the market during the dotcom and housing bubbles (yes, the forbidden market timing). But I’m doing okay in retirement and making money. Bought some treasuries lately.

 

[PimTac]

The Wolf chimes in on the latest inflation numbers.

Fed’s Favored Core PCE Price Index Re-Accelerates, Driven by Services, Motor Vehicles: Inflation Stuck on High, Shifts from Item to Item

Not encouraging: core PCE price index refuses to come down, has moved sideways since July last year.

wolfstreet.com

 

[PimTac]

The markets should react positively this upcoming week now that a compromise deal has been reached on the debt ceiling.

 

[PWMDMD]

At a certain point in one's investing career, it is more important to not lose to much instead of the bigger gain risks.
Or at least have a "safety stock" amount in conservative products. That's what I do.
Regarding keeping up with inflation, that's why I focus on minimizing recurring costs. It's a good inflation hedge strategy.

Accumulation phase vs distribution phase...

Lots of people don't understand this concept...

 

[JeffKeryk]

Accumulation phase vs distribution phase...

Lots of people don't understand this concept...

Start early; buy that beautiful German car after it will make zero difference in your financial stability.

 

[ArrestMeRedZ]

Accumulation phase vs distribution phase...

Lots of people don't understand this concept...

You can understand it on an intellectual level, but on an emotional level it can be tough to "flip the switch" after focusing on accumulation for 40 years.

 

[PimTac]

You can understand it on an intellectual level, but on an emotional level it can be tough to "flip the switch" after focusing on accumulation for 40 years.

This is true and it will vary widely depending on what amount and types of assets a person has.

In many cases, there is also a holding period where a person accumulates during their working life then stops at retirement but does not take from those assets until later on. Those that retire early with a good payout or pension benefit may decide to leave their 401k as is with no contributions. Distribution comes later on.

 

[PWMDMD]

You can understand it on an intellectual level, but on an emotional level it can be tough to "flip the switch" after focusing on accumulation for 40 years.

I get it and of course, it depends on what you have, what you need, how long you have to get it, how long you need it to last, and risk tolerance. People tend to focus on accumulation and I've read too many stories of people who have actually reached their goal just to retire and not shift their asset allocation to the distribution phase and they lose much of it at the worst time. I'd argue, these people don't really understand the difference between the two phases because few would be willing to accept the risk associated with treating their retirement years like it was still the 100% accumulation phase. All too often it's people who have not reached their goals and they are trying to accumulate late in life to make up for lost time...this is a BIG risk.

 

[JeffKeryk]

You can understand it on an intellectual level, but on an emotional level it can be tough to "flip the switch" after focusing on accumulation for 40 years.

Then it's time to pull up their big boy pants. I ask people, "Do you have time for your portfolio to recover?" "Where's your buffer?"
Hope springs eternal. Hope is a lousy strategy.

 

[Dave Hess]

There’s some people that can lose 60% of their portfolio balance and still be fine.

There has to be an exit and draw down strategy.

 

[SC Maintenance]

The last 15 years were really strange for a lot of retirees - with ZIRP. I think a lot of people likely felt their choice was chasing yield in junk bonds, or just leave it in equities. If they left it in stocks, yes there down from a year ago, but still quite far ahead if it had been there for a while.

If you were retired and in treasury bonds starting a year ago, you lost at least 15% of your principle. If you were in corporate bond funds you lost more likely. If you actually held funds and not the bonds themselves, you don't even get to hold them to maturity and collect.

Not saying any of that is right, but its likely the options they were given by their "advisor".

 

[Warstud]

There’s some people that can lose 60% of their portfolio balance and still be fine.

There has to be an exit and draw down strategy.I shake my he

I shake my head when some one acts like there fine with that . And says you cant time the market .

 

[JeffKeryk]

There’s some people that can lose 60% of their portfolio balance and still be fine.

There has to be an exit and draw down strategy.

That's when you know you are OK.
My plan, to repeat, was to minimize recurring costs so that I needed little to maintain. Immune, or at least less immune, to market fluctuation. In business we call it a hedge. Don't get caught with your pants down... This also allows for more risk taking, as your foundation is solid.

 

[JeffKeryk]

I shake my head when some one acts like there fine with that . And says you cant time the market .

Curious... Why?
I believe in contingency planning. What if, what if, what if....

 

[PimTac]

The markets should react positively this upcoming week now that a compromise deal has been reached on the debt ceiling.

Maybe I spoke too soon?

 

[SC Maintenance]

Maybe I spoke too soon?

Buy the rumor sell the news.

Debt deal was always baked in anyway.

 

[Pablo]

People are calling the deal budget cuts. Only in the world of porcine statists. Laughable

 

[PimTac]

People are calling the deal budget cuts. Only in the world of porcine statists. Laughable

The whole deal is a mess. The increased spending and debt will only increase inflation and interest rates which the markets do not like.