View Full Version : Going to cash until after election
My husband has contemplated going to cash in his stock positions until after the election. I have heard other people on various forums saving they are thinking of doing the same thing.
I was thinking of just holding tight in my current allocation, which is low in stocks anyway, 30%. I hate losing money and know that this is too low to be in stocks for the long run, that I have longevity in my family and need to be around 50% but I don't really want to up it now.
What are you wise folks thinking of doing, if anything, in the next month or so?
rosarugosa
10-1-20, 5:35pm
Tybee: I am not making any changes to my allocation. The financial gurus I respect (JL Collins, JD Roth, MMM) do not recommend timing the market, so that is something I avoid. I'll admit that I did pull out some extra cash last year and this year when the markets were really high, so I've not been following the 4% rule as closely as I had intended. I guess the additional cash holdings do actually shift my allocation, but most of my money is in my 401k which is 60% stocks and 40% bonds. When the markets are doing very badly, I just don't look at my accounts (I call this my "ostrich strategy"). That might sound silly, but it's served me very well through some major market downturns. :)
No, it sounds really, really smart. I was hoping to hear advice like this.
Our asset allocation is staying right where it's been -- about 65% stocks and (right now, anyway) most of the rest in cash. We're doing alright so far without having to take money from our IRAs and 401(k)s so we're leaving things the way they are. We'll likely need that money over the coming 20-30 years, so eliminating the chance for appreciation in stocks (while still exposing oneself to inflation losses with cash) are not part of our plan. But everyone has different needs and risk tolerances. If DH won't sleep at night unless he liquidates his stocks, he's gotta do it. But that's not a smart move for DW and me.
rosarugosa
10-1-20, 6:10pm
Good point, Steve. You need to be able to live with whatever you choose.
I'm not planning any changes. I just recently shifted a significant chunk of cash to real estate. I was comfortable doing that because I felt that I was too heavy in cash and needed to diversify. Over time I will rebalance and get back in whack. And no, despite all the orange buffoon's screeching I don't believe the economy is going to crash to the floor when he loses a month from now. If anything having a sane, calm, competent president will probably be a good thing for the stability of the markets. I suppose a few people will worry about SOCIALISM OOOGA BOOOGA, but most of us will acknowledge that that's just not a rational thing to be freaked out about when Biden wins.
Our asset allocation is staying right where it's been -- about 65% stocks and (right now, anyway) most of the rest in cash. We're doing alright so far without having to take money from our IRAs and 401(k)s so we're leaving things the way they are. We'll likely need that money over the coming 20-30 years, so eliminating the chance for appreciation in stocks (while still exposing oneself to inflation losses with cash) are not part of our plan. But everyone has different needs and risk tolerances. If DH won't sleep at night unless he liquidates his stocks, he's gotta do it. But that's not a smart move for DW and me.
Steve, it sounds like you are at the same stage of life that we are. My husband is still working full time, thank God, but I understand his desire to protect what he has. But I also know that longterm, it's better to stay in and ride it out. We need that chance for stocks to appreciate, especially now that there is nothing available in fixed income that will meet the needs for a lifespan that may go into our 90's. His dad died at 91. My parents are 92 and 94.
iris lilies
10-2-20, 7:29am
Look, if Trump loses I’m pretty sure there will be a dip in the market. But there are always dips in the market.
I am more worried about long term investing and Covid affects on the world’s economy.
Look, if Trump loses I’m pretty sure there will be a dip in the market. But there are always dips in the market.
I am more worried about long term investing and Covid affects on the world’s economy.
Yes, finding out this morning that he had Covid--well, that's going to destabilize the market even before the election.
I’m not a big believer in market timing, especially for my long term money. I’m just not smart enough to do it consistently, so I stick with a static asset allocation strategy. My pension/SS income streams provide for daily living and the portfolio is for the occasional big deal and to hedge inflation.
dado potato
10-2-20, 1:00pm
My portfolio is currently allocated:
57% Fixed Income (Munis, Treasury I Bonds, money market fund, CDs, etc.)
32% Long Risk (US stocks, foreign stocks, gold/silver metal and miners.)
11% Short funds.
Normally I would not be interested in a short hedge, but after the Shiller PE increased above 30, I decided I wanted the negative beta of a short fund such as GRZZX or HDGE.
I believe that a mainstay of the bull market in stocks since 2009 has been share buybacks. I would expect that if Biden is elected and the Democrats control both the Senate and the House, there likely will be new laws to restrict share buybacks. Senator Tammy Baldwin already has drafted a bill to that effect.
Nothing in this reply is intended as advice, I am just putting it forward as discussion.
We need that chance for stocks to appreciate, especially now that there is nothing available in fixed income that will meet the needs for a lifespan that may go into our 90's. His dad died at 91. My parents are 92 and 94.
No one in my family going back two generations has lived to 90, though my father's mother lived to 88, my mom is 86, and DW's mom is 88. It's one of those "if you make it out of your 60s" deals in which you may be around for quite a while after age 70.
To DW and me, the 80s almost feel like yesterday, yet they were 30-40 years ago. Look at the prices of many things and imagine that curve continuing over another couple of decades and cash doesn't cut it. Right now most bonds aren't cutting it, either. Again, it's everyone's comfort level, but we're in a position that gives us time to recover from a significant drop in stocks. So we stay in. If we die with a big pile of money, we can think of several worthy recipients. And if the U.S. has a couple of "lost decades", we'll figure out what to do then.
No changes for us! When there's a big dip, I rollover from IRA to Roth. I retired July 2019. We're doing this each year during this lower tax period getting near the maximum without hopping up a bracket. Allocation however, is still moderately aggressive as we're just 59 and I'm likely to reach mid-90s per female family history and hubs well into the 80s per his family history. We've got a lot of living ahead!
I’ve already cut back some on my stock allocation, but still have about 40-45% in stocks. That’s much less than I’ve had in the past.
frugal-one
10-2-20, 4:14pm
I’ve already cut back some on my stock allocation, but still have about 40-45% in stocks. That’s much less than I’ve had in the past.
Same here. Also have more cash. If things tank, we have enough to get by for quite a while.
Same here. Also have more cash. If things tank, we have enough to get by for quite a while.
That seems very sensible. I am going to share all these good ideas with him and hope that he decides to just hold the course.
As for me, I need to come up with an asset allocation that I feel good about. Then it will be easier to stick to it no matter what comes down the pike.
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