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What are your plans going forward?

 

Dear Groupthink, So this challenge is real and probably getting worse (possibly much worse) before better I’d like to start a thread on what folks plans of action look like. Richardsok and FD have gone to cash, or mostly. The dividend folks are buying equity yield. Some are holding because they are fully invested all the time. I’m guessing most of us have cash or OEF bonds to liquidate and implement. Here is where I am:

I’ll admit I was too early in implementing cash but I still have a good reserve of dry powder. I de-risked in Dec. Not enough as it appears. I also bought TLT and EDV of which I only have a little left. I am adding slowly to what I consider my blue chip FI CEFs. (PDI, PCI, PTY, DSL). I reason that they may still fall further but I’ll be reinvesting dividends at lower prices. I’m currently about 5% shy of my CEF allocation (20% usually). Equities are not looking like good values yet. Interesting, to me, consumer staples looks to be most overvalued thus not a safer haven. My future shopping list includes AAPL ($200 or less) D (70ish) I already currently hold some, MSFT ($135 or so) VZ ($45 or so) AMZN $1600. I would continue to buy those at lower prices. I’ll add to some of my equity OEFs (JENSX, VPCCX, POGAX) when their top ten holdings are all M* 4 or 5 stars. The same is true of my LCV ETFs (VYM, VDC, VFH. If/when LCV drops a lot more I plan to shift some of my bond OEF to VWIAX as a “till death do us part” hold. I’ve been switching FI and equity OEFs in our IRAs with decent success but I’m tired of it. I have almost two years of withdrawal in MINT and about 45% of total port in various FI OEFs so I can go a long time w/o selling equities. Also will admit I have opened a position in XLE, even after I swore off energy like I would a crazy girlfriend. My reasoning is that it is the most beat sector. It will no doubt get worse with less travel. I hope it will recover somewhat after this mess when travel resumes. There is another reason too. In the unlikely event of a disruption in the Middle East it might prove a decent hold. Either way it is a very small portion. I’ve been posting all my trades (good, bad and ugly) on the Buy/Sell/Why thread if only to serve as a reminder of what NOT to do.

I also think there is more to this drop than COVID-19, though that’s the driving factor. Some may worry about the possibility of a democratic socialist as president some may feel our current president has been less than forthcoming with info on COVID-19. I DO NOT want to politicize this post but only to acknowledge it may be more complex than one issue.

So what are your plans? I’m curious as to other’s thinking. Aside to the poster that likes to hold on to his suspenders; please do exactly that and keep the hands away from the keyboard during this thread, respectfully requested. Take care all, rm

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Valued Contributor

Re: What are your plans going forward?

 

Step 1:  I had lunch today with Richardsok, to develop our plans going forward...:-)

Had already arranged for my full 2020 RMDs,  by selling some stock mutual funds in January, as posted in the MELTUP thread,  this post:

"...I provided criteria I use in determining "meltups", especially if Market Index Prices get AT LEAST 10% above  their 200 day Moving Average price.  In January, the Nasdaq got to 15% above its 200 day MA(per CNBC).  This is  historically high for this index...usually a strong correction follows.   

That I started preparations for taking my 2020 IRA Required Minimum Distributions, by selling some equity stock mutual funds.  Strategic sales...the first being just before the first corona virus news.  This virus-news triggered me to sell more...and more quicker, ending in a week.  2020 RMDs now covered."

Regarding my remaining portfolio, will post more on strategy and action plan, as weekend closes and market futures are available.

BTW I consider the down stock market will be an OPPORTUNITY to move monies out of traditional bond funds, which have high NAVs and historic low interest rates, into stock funds...greatly increasing yield, and chance for growth.  Of course, the timing and sequence is the question; and one must control their behavior and psych matters.

R48

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Participant ○

Re: What are your plans going forward?

With 10 yr Treas at 1%, I am not sure what fixed income investment one could make.  I am completely clueless as to which would be good investments 6 mos or 1 year from now.  I currently have a 60-40 portfolio.  I have no clue how it will look a year from now.  

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Participant ○○○

Re: What are your plans going forward?

I have a 30/70 portfolio and am doing exactly nothing. I'll be 70 this summer, still working, portfolio has been in a holding pattern for several years now.

But it's all fun to watch.

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Participant ○○

Re: What are your plans going forward?

With a 5-10 year time horizon, this past weeks market action is a buying opportunity.  Impossible to tell if even better opportunities will present themselves within the next few weeks or not.

My understanding it that the reason the virus has spread so fast is that it's not especially debilitating.  China probably under reported the number of cases, which is why the death rate in that country appears so much higher than else where.  That said, the virus appears to have already gained a foot hold in the Western US and will likely spread across the country in the next 2 weeks.  Too early to know if it will then respond as most virus do with infection rates dwindling as the weather warms.  Flu season usually ends in April and a vaccine will surely be available by late summer.

Currently looking at 18% cash and cash equivalents with the majority of my holdings in the S&P500 and the remainder in a few other mutual funds.

Will likely place a few limit orders in case the bottom drops out.  Primary will be for VOO and another smaller order or two for something more volatile.  Not sure what at this point;  suggestions?

Thinking of a LIMIT order for VOO at 250  (still undecided)

 

 

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Re: What are your plans going forward?


@Anitya wrote:

With 10 yr Treas at 1%, I am not sure what fixed income investment one could make.  I am completely clueless as to which would be good investments 6 mos or 1 year from now.  I currently have a 60-40 portfolio.  I have no clue how it will look a year from now.  


@Anitya The possible reason for treasuries is not yeild. EDV is up almost 20% so far this year! Of course it can go down, fast. Mine is almost used up but if there is a rebound I might add more as a hedge for the future.

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Participant ○○○

Re: What are your plans going forward?


@retiredat48 wrote:

 

Step 1:  I had lunch today with Richardsok, to develop our plans going forward...:-)

BTW I consider the down stock market will be an OPPORTUNITY to move monies out of traditional bond funds, which have high NAVs and historic low interest rates, into stock funds...greatly increasing yield, and chance for growth.  Of course, the timing and sequence is the question; and one must control their behavior and psych matters.

R48

I agree. The biggest moves forward in my port are in times like this. What, when and how much to allocate to equity are my questions as of now. 


 

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Participant ○○○

Re: What are your plans going forward?


@rhythmmethod wrote:

@Anitya wrote:

With 10 yr Treas at 1%, I am not sure what fixed income investment one could make.  I am completely clueless as to which would be good investments 6 mos or 1 year from now.  I currently have a 60-40 portfolio.  I have no clue how it will look a year from now.  


@Anitya The possible reason for treasuries is not yeild. EDV is up almost 20% so far this year! Of course it can go down, fast. Mine is almost used up but if there is a rebound I might add more as a hedge for the future.


Yes, I have SCHR and TLH for price appreciation, and they have done well the past week, muting the stock plunge in my 30/70 port.

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Participant ○○○

Re: What are your plans going forward?

I am low in equity (according to my own fixed asset allocation), but will buy in gradually and adaptively to take advantage of this correction.  My action will be according to my own strategy and independent of future market behavior.  

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Valued Contributor

Re: What are your plans going forward?


@retiredat48 wrote:

 

Step 1:  I had lunch today with Richardsok, to develop our plans going forward...:-)

Had already arranged for my full 2020 RMDs,  by selling some stock mutual funds in January, as posted in the MELTUP thread,  this post:

 


What % of your total portfolio is the above?

Anything less than 10% is meaningless as a big picture move...just my opinion ;-)

==========================

@rhythmmethod wrote:

 

Dear Groupthink, So this challenge is real and probably getting worse (possibly much worse) before better I’d like to start a thread on what folks plans of action look like. Richardsok and FD have gone to cash, or mostly. The dividend folks are buying equity yield. Some are holding because they are fully invested all the time. I’m guessing most of us have cash or OEF bonds to liquidate and implement. Here is where I am:

I’ll admit I was too early in implementing cash but I still have a good reserve of dry powder. I de-risked in Dec. Not enough as it appears. I also bought TLT and EDV of which I only have a little left. I am adding slowly to what I consider my blue chip FI CEFs. (PDI, PCI, PTY, DSL). I reason that they may still fall further but I’ll be reinvesting dividends at lower prices. I’m currently about 5% shy of my CEF allocation (20% usually). Equities are not looking like good values yet. Interesting, to me, consumer staples looks to be most overvalued thus not a safer haven. My future shopping list includes AAPL ($200 or less) D (70ish) I already currently hold some, MSFT ($135 or so) VZ ($45 or so) AMZN $1600. I would continue to buy those at lower prices. I’ll add to some of my equity OEFs (JENSX, VPCCX, POGAX) when their top ten holdings are all M* 4 or 5 stars. The same is true of my LCV ETFs (VYM, VDC, VFH. If/when LCV drops a lot more I plan to shift some of my bond OEF to VWIAX as a “till death do us part” hold. I’ve been switching FI and equity OEFs in our IRAs with decent success but I’m tired of it. I have almost two years of withdrawal in MINT and about 45% of total port in various FI OEFs so I can go a long time w/o selling equities. Also will admit I have opened a position in XLE, even after I swore off energy like I would a crazy girlfriend. My reasoning is that it is the most beat sector. It will no doubt get worse with less travel. I hope it will recover somewhat after this mess when travel resumes. There is another reason too. In the unlikely event of a disruption in the Middle East it might prove a decent hold. Either way it is a very small portion. I’ve been posting all my trades (good, bad and ugly) on the Buy/Sell/Why thread if only to serve as a reminder of what NOT to do.

FD: lots of moving parts and difficult to follow.  What is your big picture view, AA and where you are going?  not a criticism but trying to understand.

As usual, whatever you do and report is fine with me :-)

I'm always looking at the aggregate of my funds and not accounts so I can see the big picture and know my situation at all times and where I want to go. Having only 2-4 funds makes it very easy to trade very quickly.

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Valued Contributor

Re: What are your plans going forward?

My equity allocation was already below my target for several reasons: caution regarding market fundamentals, sudden influx of cash equal to about 6% of my total portfolio, months of excess monthly cash not yet invested due to reason #1.

I made some equity purchases last week, and though a few are below current levels, I am looking at the longer time frame and comfortable with them. No way to guess a bottom or recovery mode, so buying all the way down works for me. Bought around 3% of my total portfolio in equities last week. Might buy more on any further drops next week, but will be patient.

Sold some more risky bond oef positions at end of last week, as I think it is time to be more cautious on the FI side. Still holding a Blackrock vanilla bond oef in my 401K that is up 3.5% YTD, PIGIX (3.22% YTD) and PRFHX (3.25% YTD and up every day last week!), but watching carefully.

Intent is to get to a target allocation of 65/35 eventually, subject to revision. I buy mutual funds and never have been able to beat great funds like TRP's PRMTX, PRHSX, PRSCX, etc, so I stopped trying. I am not looking for yield I am still growing my retirement accounts and don't want the added tax burden in my taxable accounts at this time.

If we drop another 10%, I might just swing for the fences!

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Explorer ○○

Re: What are your plans going forward?


I am sticking with my 70/30 asset allocation.  Given my rebalancing protocol this will force me to buy equities on sale as we enter bear market territory (which may happen soon if we drop another few percent).  Conflicted on whether to emphasize purchase of value - focused funds or total market as I start purchasing; e.g. small value has really underperformed.

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Valued Contributor

Re: What are your plans going forward?

Situation

The port down 0.8% YTD and I have a 3.3% draw-down from my recent peak.

Asset Allocation: 23% equities, 58% multi-sector bonds, and 23% cash.  I did some minor equity trimming after the first big equity drop and am now below my target risk allocation.  Sold PCI last year as the premium became too rich for my taste.

Plans

  • Buy fixed income CEFs when / if we get any tasty discounts; trade out the OEFs;
  • Watch for signs of market capitulation and add to AKRIX, buy PBW (bet on "clean energy" momentum), maybe start a position in VDIGX; may DCA or go "all in" if the market hits an air pocket;
  • Maybe buy an equity hedge like SH or SDS as a trade ... if I'm able to pay attention and think we're seeing a market head-fake; am unhedged now.

My hunch is that we have not yet seen the bottom of this correction, but I think it's reasonable to slowly rebalance into risky assets if presently below target risk allocation.  The S&P 500 has come down to chart support levels, after correcting from the weak rally "melt up" described by JRinNY in December. 

Am flying down to Crete on Thursday to sign for a second property; meet with my architect and do design / permit work.  I think the prices are excellent, but the project is for pleasure. The idea is to spend Springs and Falls on Crete, splitting time with northern Europe and visits to Australia.  Will spend part of June in the UK, July in Denmark, and August in Israel.

N.

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Explorer ○○○

Re: What are your plans going forward?

Will wait and see.  I expect this to continue for several months, there are no signs of capitulation.  People are still buying on the dip, if this stops, then will reconsider options.  Too many heroes left in the stock market.

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Participant ○○○

Re: What are your plans going forward?


@norbertc wrote:

Situation

The port down 0.8% YTD and I have a 3.3% draw-down from my recent peak.

Asset Allocation: 23% equities, 58% multi-sector bonds, and 23% cash.  I did some minor equity trimming after the first big equity drop and am now below my target risk allocation.  Sold PCI last year as the premium became too rich for my taste.

Plans

  • Buy fixed income CEFs when / if we get any tasty discounts; trade out the OEFs;
  • Watch for signs of market capitulation and add to AKRIX, buy PBW (bet on "clean energy" momentum), maybe start a position in VDIGX; may DCA or go "all in" if the market hits an air pocket;
  • Maybe buy an equity hedge like SH or SDS as a trade ... if I'm able to pay attention and think we're seeing a market head-fake; am unhedged now.

My hunch is that we have not yet seen the bottom of this correction, but I think it's reasonable to slowly rebalance into risky assets if presently below target risk allocation.  The S&P 500 has come down to chart support levels, after correcting from the weak rally "melt up" described by JRinNY in December. 

Am flying down to Crete on Thursday to sign for a second property; meet with my architect and do design / permit work.  I think the prices are excellent, but the project is for pleasure. The idea is to spend Springs and Falls on Crete, splitting time with northern Europe and visits to Australia.  Will spend part of June in the UK, July in Denmark, and August in Israel.

N.


Thanks, @norbertc. Great post. I'm also looking for head fake and will re-purchase EDV if things turn up unwarranted. I'd be curious as to your FI OEFs if you feel like sharing. I'm still grateful to JR for my re-balancing in Dec. I'm down about 3% YTD so you're doing much better than I at 50-50 down from 60-40. Best of luck with your properties in Crete! Take care, rm

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Re: What are your plans going forward?


@FD1001 wrote:

 

FD: lots of moving parts and difficult to follow.  What is your big picture view, AA and where you are going?  not a criticism but trying to understand.

As usual, whatever you do and report is fine with me :-)

I'm always looking at the aggregate of my funds and not accounts so I can see the big picture and know my situation at all times and where I want to go. Having only 2-4 funds makes it very easy to trade very quickly.


You're might be right. @FD1001 

I have 3-4 bond OEFs 3 growth equity OEFs, 3 value ETFs and for a few years owned AAPL, AMZN and D. CEFs;  PDI, PCI, PTY, DSL and I recently added EDV, TLT mentioned above as a hedge. I usually maintain a 60-40 now at 50-50 after JR's famous post. I count CEF as equity in that reasoning. This has allowed me to beat a similar port with tactical buys and sells, especially AAPL, AMZN and the CEFs, in good times, but is a bit cumbersome in a down turn. Last year I was up apx 23% and have been averaging apx 10-12% for 3, 5 and 10 years. rm

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Valued Contributor

Re: What are your plans going forward?

@rhythmmethod

Last year it was just PCI.  Ivascyn changed its strategy a few years back, but I think many missed that point.  So, it was much like PDI, but with a big discount.

Going forward, and looking looking beyond fixed income:

  • PCI & PKO (Ivascyn)
  • PDT (preferred), now trading at par, finally!
  • UTF (infrastructure).
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Valued Contributor

Re: What are your plans going forward?

Back in September of 2018, I rebalanced. I posted the details in real-time on the old I&D forum. I sold enough VTI to bring my allocation between fixed and equities back to its strategic allocation of 65%. The proceeds from the sale were put into GLD, again posted and explained at the time of the trade. I sold enough GLD to cover my RMD plus two future RMDs.
I’m no fan of gold as a long term strategic hold. As a result of your post, I will be looking at selling my GLD holdings next week. Bought back in Sept of 2018 at 113 and change and going for 148 and change it was the right choice for uncertain times. Proceeds of the sale will go back to strategic allocation unless the market drops 30% before I sell, and then I will overweight equities by 5%.
Taking significant gains off the table back in Sept 2018 has me well within my risk tolerance bands, makings the recent activity a non-event. I expect this rapid and unforeseen volatility will have many reexamining the allocations for risk tolerance.

Best to all, with your future choices.

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Contributor ○

Re: What are your plans going forward?

         As in the past wait for clarity of the still fluid situation. Maybe a worldwide slowing of new cases. Bargains can still be had. Have a little patience. Do nothing for now. You can’t control an unknown based on what you “think”. Wait for facts.

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Contributor ○

Re: What are your plans going forward?

I de-risked early, but the market has already given back a chunk of what I had left on the table.  Lots of accessible cash through MM and short-term bond etfs available even after the PCI buys I've already made.  Might be a tradeable bounce here with NASDAQ bouncing off its 200-dma and everything else having 200-dma resistance ahead, but, yeah, probably not out of the woods just yet.  Still plan on increasing equity, and wouldn't be adverse to a little more PCI for a quick trade.  Even PDI is starting to look interesting...

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