Move all investment money into fixed income?

[44Apple]

At what point should one change from being an investor to a "saver"?

I've been retired a number of years and have invested all my adult life. Luckily, we have enough non-investment money to live on.

I now wonder if I should gradually begin selling my ETFs, Mutuals, and stocks and move all the money into fixed income.

I know the outcome will be lower and stable, but I won't have to deal with the daily ups and downs.

I'm familiar with the 60/40 rule but wonder if I should go 0/100.

[golfing eagles]

At what point should one change from being an investor to a "saver"?

I've been retired a number of years and have invested all my adult life. Luckily, we have enough non-investment money to live on.

I now wonder if I should gradually begin selling my ETFs, Mutuals, and stocks and move all the money into fixed income.

I know the outcome will be lower and stable, but I won't have to deal with the daily ups and downs.

I'm familiar with the 60/40 rule but wonder if I should go 0/100.

Obviously the higher the risk, the higher the return. Just remember, today's 5 yr T note rate in 3.96%, inflation is almost double that.

[Two Bills]

At what point should one change from being an investor to a "saver"?

I've been retired a number of years and have invested all my adult life. Luckily, we have enough non-investment money to live on.

I now wonder if I should gradually begin selling my ETFs, Mutuals, and stocks and move all the money into fixed income.

I know the outcome will be lower and stable, but I won't have to deal with the daily ups and downs.

I'm familiar with the 60/40 rule but wonder if I should go 0/100.

Wife and I living in UK retired 27 years ago. We decided to put all our investments into cash, and avoid the grind of the ups and downs of the S&S market.
We looked for tax free fixed rate government cash bonds, and Government Inflation proof tax free cash bonds.
Ultra conservative, and capital making no spectacular growth, but no spectacular falls either.
In fact with inflation rising all time in UK at present, we are doing very nicely thank you!
It worked for us.
Some folks love the daily market gamble, but we wanted no more of that.
Some even aim to be among the richest residents in the cemetery, but we definitely don't want that either!

[melpetezrinski]

At what point should one change from being an investor to a "saver"?

I've been retired a number of years and have invested all my adult life. Luckily, we have enough non-investment money to live on.

I now wonder if I should gradually begin selling my ETFs, Mutuals, and stocks and move all the money into fixed income.

I know the outcome will be lower and stable, but I won't have to deal with the daily ups and downs.

I'm familiar with the 60/40 rule but wonder if I should go 0/100.

Glad you put saver in quotes because that really isn't the definition of fixed income. You can put all your "non-investment" money in bonds, treasuries or CD's and it's still an investment. Nonetheless, changing from equities to bonds or the allocation of such is based off many variables, two being investment goals and risk tolerance. I would definitely re-allocate money to fixed income, so you "won't have to deal with the daily ups and downs." Maybe start with inverting that "60/40 rule", and put 60% in fixed income and 40% in equities.

[melpetezrinski]

Obviously the higher the risk, the higher the return. Just remember, today's 5 yr T note rate in 3.96%, inflation is almost double that.



Why should the OP remember that "today's 5 yr T note rate is 3.96%, inflation is almost double that"?

[retiredguy123]

At what point should one change from being an investor to a "saver"?

I've been retired a number of years and have invested all my adult life. Luckily, we have enough non-investment money to live on.

I now wonder if I should gradually begin selling my ETFs, Mutuals, and stocks and move all the money into fixed income.

I know the outcome will be lower and stable, but I won't have to deal with the daily ups and downs.

I'm familiar with the 60/40 rule but wonder if I should go 0/100.
I have always maintained a 40 percent stock, 40 percent bond, and 20 percent cash portfolio. I intended to transfer to 100 percent bonds and CDs when I retired. But, I no longer think that is a good idea because of the Federal Reserve's tight control over interest rates. Their interest rate policy is to punish savers and reward borrowers. So, I have not changed my asset allocation since retiring and I don't intend to. If you can afford to live off of your non-investment income, I think it would be a mistake to go to 100 percent fixed income.

[Babubhat]

4.6 percent on six months Treasury today. All I need risk free,

The inflation rate is nonsense. Control your housing costs and taxes. The rest is insignificant if you have properly saved. Most people have limited time left.

I am a greedy penny pincher but the time has come to spend. Don’t have heirs come to your funeral in a Maserati

[blueash]

If you cash out all these longly held ETFs etc. you need to consider how much taxable income you will generate and will you pay more in taxes than any real risk of a downturn in the markets. If you don't need those invested funds now or in the predictable future they will be part of your estate and will pass to your heirs at the stepped up basis of their value on your date of death.

[golfing eagles]

If you cash out all these longly held ETFs etc. you need to consider how much taxable income you will generate and will you pay more in taxes than any real risk of a downturn in the markets. If you don't need those invested funds now or in the predictable future they will be part of your estate and will pass to your heirs at the stepped up basis of their value on your date of death.

Unless.....they're held in tax deferred accounts

[Babubhat]

Taxes are always a major consideration. Run the numbers. Time is your most valuable asset late in life

[manaboutown]

Why not consult a fee based financial advisor you vet ahead of time who will sign on to act as a fiduciary? Some people experience extreme stress making big financial decisions, especially irrevocable ones such as selling securities which may bring about huge tax bills or significant losses. Frankly, before I make big decisions in areas with which I am unfamiliar, unknowledgeable or uncomfortable I try to consult one or more experts

[daniel200]

Well if you have enough noninvestment income today to meet all of your expenses, then whatever path you take should work … i am in a similar situation …. I have been gradually downsizing my investments the last few years in favor of cash and short term treasuries. I sleep well knowing my downside risks are minimal.

I am also content to know that my money market accounts are now paying 3.8% and short term treasuries 4.6%. Sure the overall inflation rate is high … but my personal inflation rate is not.

[retiredguy123]

Well if you have enough noninvestment income today to meet all of your expenses, then whatever path you take should work … i am in a similar situation …. I have been gradually downsizing my investments the last few years in favor of cash and short term treasuries. I sleep well knowing my downside risks are minimal.

I am also content to know that my money market accounts are now paying 3.8% and short term treasuries 4.6%. Sure the overall inflation rate is high … but my personal inflation rate is not.
I would have agreed with you 20 years ago, when I could live off of my money market and bond monthly interest checks. But I don't think the Federal Reserve will ever again let savers get a fair rate of return on their fixed rate income investments. They want to encourage more borrowing and less saving.

[LuvtheVillages]

Why should the OP remember that "today's 5 yr T note rate is 3.96%, inflation is almost double that"?

Because Jerome Powell, head of the Federal Reserve, has said that the goal is for interest rates to be more than the inflation rate.

There are more interest rate hikes to come.

If you decide to go fixed income, perhaps start moving just a portion of your funds, and add more later as interest rates increase.

[melpetezrinski]

Because Jerome Powell, head of the Federal Reserve, has said that the goal is for interest rates to be more than the inflation rate.

There are more interest rate hikes to come.

If you decide to go fixed income, perhaps start moving just a portion of your funds, and add more later as interest rates increase.

"Jerome Powell, head of the Federal Reserve, has said that the goal is for interest rates to be more than the inflation rate." Please provide your source!

[melpetezrinski]

I would have agreed with you 20 years ago, when I could live off of my money market and bond monthly interest checks. But I don't think the Federal Reserve will ever again let savers get a fair rate of return on their fixed rate income investments. They want to encourage more borrowing and less saving.

"They want to encourage more borrowing and less saving" Uh, the Fed is doing the exact opposite when they raise interest rates. Have you seen the mortgage rates recently? Does that sound like the Fed is encouraging people to borrow against a house? This more importantly, plays through to the corporate environment. Higher rates=less borrowing=slower growth=freezing hiring= less money in the hands of everyone = reduction of inflation and possible recession.

[manaboutown]

"Volcker slammed the brakes on the economy by raising interest rates to 20% " From: Memories of the 1970s haunt the Fed, pushing its aggressive rate moves : NPR (https://www.npr.org/2022/09/29/1125462240/inflation-1970s-volcker-nixon-carter-interest-rates-fed)

Anyone else remember those days?

My parents loved the rates they got on CDs back then.

Actually inflation started in the mid 1960s, guns and butter times. I started working at the USPTO as a patent examiner in the summer of 1966. If I recall correctly the Federal employees pay scale was increased three times in about one year. I remember I got maybe a 3% raise but the price of my afternoon ice cream snack in the cafeteria went up 30%.

[retiredguy123]

"Volcker slammed the brakes on the economy by raising interest rates to 20% " From: Memories of the 1970s haunt the Fed, pushing its aggressive rate moves : NPR (https://www.npr.org/2022/09/29/1125462240/inflation-1970s-volcker-nixon-carter-interest-rates-fed)

Anyone else remember those days?

My parents loved the rates they got on CDs back then.

Actually inflation started in the mid 1960s, guns and butter times. I started working at the USPTO as a patent examiner in the summer of 1966. If I recall correctly the Federal employees pay scale was increased three times in about one year. I remember I got maybe a 3% raise but the price of my afternoon ice cream snack in the cafeteria went up 30%.
I remember them well. My wife borrowed money at 21.5 percent to build a veterinary clinic in 1980. Fortunately, there were a lot of sick dogs and cats to pay the interest.

[daniel200]

Unless.....they're held in tax deferred accounts

There is another option for regular taxable accounts. Right now it is very easy to purchase treasuries that were issued in the last few years that have a bond coupon interest of only 0 to 0.5%
These bonds offer a yield to maturity of 4.0 to 4.7% depending on the maturity date. So if you purchase 0.50% bond maturing in 2027 (5 years) … you have a small yearly taxable interest of $5.00 per $1000 bond. But when it matures in 2027 you will have a long term capital gain $156 per $1000 bond (This is how you get your yield to maturity of 4.03% on this bond).. So almost all of the yield is tax deferred until the bond matures… And in this case most of the income is taxed at the lower long term capital gains rate.

This is based on todays price of a US Treasury 10/31/2027 note with a 0.5% interest rate. The cost to buy one $1000 bond is only $844 based on todays market price on Fidelity.

[retiredguy123]

There is another option for regular taxable accounts. Right now it is very easy to purchase treasuries that were issued in the last few years that have a bond coupon interest of only 0 to 0.5%
These bonds offer a yield to maturity of 4.0 to 4.7% depending on the maturity date. So if you purchase 0.50% bond maturing in 2027 (5 years) … you have a small yearly taxable interest of $5.00 per $1000 bond. But when it matures in 2027 you will have a long term capital gain $156 per $1000 bond (This is how you get your yield to maturity of 4.03% on this bond).. So almost all of the yield is tax deferred until the bond matures… And in this case most of the income is taxed at the lower long term capital gains rate.

This is based on todays price of a US Treasury 10/31/2027 note with a 0.5% interest rate. The cost to buy one $1000 bond is only $844 based on todays market price on Fidelity.
I understand the concept of buying at a discount and paying capital gains rates. But, looking at the CDs available at Fidelity, you can buy a 2 year CD that pays 4.85 percent interest and then see what interest rates do in 2 years. I can't see committing money for 5 years at a lower interest rate, when interest rates are rising.

[melpetezrinski]

I understand the concept of buying at a discount and paying capital gains rates. But, looking at the CDs available at Fidelity, you can buy a 2 year CD that pays 4.85 percent interest and then see what interest rates do in 2 years. I can't see committing money for 5 years at a lower interest rate, when interest rates are rising.

You don't even have to go out 2 years on a CD. 3 month CD is 4.01%, 6 month is 4.55%.
Tbills are 4.39% on 3 months and 4.57% on a 6 month.

[CoachKandSportsguy]

The stock market is going lower in the beginning of CY23, interest rates may or may not go higher from here. as inflation has peaked, or is near its peak, but the federal reserve has not finished yet.

Taxes should not be as much of a consideration to sell stock -> taxes are a by product of success, the more success, the more taxes you will pay, and that sure beats taking a tax loss. . .. .Loss of gains is now on what you should be focused, given retirement and only the lottery will significantly change your income to invest more. Indexes or highly diversified portfolios are a bit different. . I sold a large portion of my stocks over two years ago, very near the peak as the divergences were showing cracks, and I have been 20% -25% equities and 60% bonds and 20+ percent cash ever since.

What is going to happen is that inflation is going to drop very quickly, as the recession and calculation base effects occur. Bond will also be bought very quickly as well, so i would encourage some shift, but that is just me, because I m patiently waiting for 3,000 3,200 on the SP500 to go back in, and trying to find a bottom to trade the long bond, and find zombie companies to continue to short on the way down. You can search on some of my posts

With treasuries, you don't have to wait for the maturity to sell, you can sell them anytime as the price rises and you get capital gains versus interest, and you can move that money back to equities if you like. .

good luck. . .

trader guy

[melpetezrinski]

The stock market is going lower in the beginning of CY23, interest rates may or may not go higher from here. as inflation has peaked, or is near its peak, but the federal reserve has not finished yet.

Taxes should not be as much of a consideration to sell stock -> taxes are a by product of success, the more success, the more taxes you will pay, and that sure beats taking a tax loss. . .. .Loss of gains is now on what you should be focused, given retirement and only the lottery will significantly change your income to invest more. Indexes or highly diversified portfolios are a bit different. . I sold a large portion of my stocks over two years ago, very near the peak as the divergences were showing cracks, and I have been 20% -25% equities and 60% bonds and 20+ percent cash ever since.

What is going to happen is that inflation is going to drop very quickly, as the recession and calculation base effects occur. Bond will also be bought very quickly as well, so i would encourage some shift, but that is just me, because I m patiently waiting for 3,000 3,200 on the SP500 to go back in, and trying to find a bottom to trade the long bond, and find zombie companies to continue to short on the way down. You can search on some of my posts

With treasuries, you don't have to wait for the maturity to sell, you can sell them anytime as the price rises and you get capital gains versus interest, and you can move that money back to equities if you like. .

good luck. . .

trader guy

"The stock market is going lower in the beginning of CY23" Agree and I'll stick my neck out and say 15%.

"3,000 3,200 on the SP500" Ouch! 20-25% more?

"20% -25% equities and 60% bonds and 20+ percent cash ever since". Are those corporate bonds or short term treasuries? I am actually fairly close to your allocation but your bond and cash buckets are just 1,3 and 6 month tbills for me.

[Babubhat]

It’s all about cash flow. Figure out what you need and plan accordingly. If you can’t sleep at night it’s not the right strategy

[CoachKandSportsguy]

"20% -25% equities and 60% bonds and 20+ percent cash ever since". Are those corporate bonds or short term treasuries? I am actually fairly close to your allocation but your bond and cash buckets are just 1,3 and 6 month tbills for me.

Bonds are a bond fund through the 401K in Vanguard, not sure duration, the remaining Equities are the SPX. cash is money market. . . I have to do some portfolio analysis for multiple accounts soon, just for the big picture as i have been working way too many hours since june and don't have time to perform any analysis

[tophcfa]

At what point should one change from being an investor to a "saver"?

I've been retired a number of years and have invested all my adult life. Luckily, we have enough non-investment money to live on.

I now wonder if I should gradually begin selling my ETFs, Mutuals, and stocks and move all the money into fixed income.

I know the outcome will be lower and stable, but I won't have to deal with the daily ups and downs.

I'm familiar with the 60/40 rule but wonder if I should go 0/100.

The yield curve peaks at 1 year and then sharply inverts out to 10 years. A ten year treasury bond currently yields less than a one month note. If you truly believe inflation has peaked, and the Fed is done raising rates, (which I don’t) then an increased allocation to bonds would be appropriate. However, don’t kid yourself that longer term bonds are a stable investment. The longer the maturity of a bond, the longer it’s duration. Duration is a measure of a bonds price sensitivity to changes in interest rates (when rates go up, prices go down, and vice versa). With a yield of only 3.8% on a ten year UST, interest rates would only have to go up by less than a half of one percent for the price decline of the bond to totally whipe out the bond yield. Be careful out there.

[Daddymac]

"Jerome Powell, head of the Federal Reserve, has said that the goal is for interest rates to be more than the inflation rate." Please provide your source!

Fed Chair Jerome Powell signaled officials will likely take interest rates even higher than the 4.5-4.75 percent they initially projected in September, but might take smaller steps to get there. That could mean rate hikes worth a slower half a percentage point — and eventually a quarter point.Nov 3, 2022 Bank Rate.

[44Apple]

Related to all this is, how long do you hold after you buy? And when do you cash in your stock gains? After 10%? 20%?

I'm thinking of targeting my IRA oil/energy holdings first as they have basically doubled and I wonder if they might begin to tail off. I don't want to lose those gains.

[LuvtheVillages]

"Jerome Powell, head of the Federal Reserve, has said that the goal is for interest rates to be more than the inflation rate." Please provide your source!

This is from the transcript of Powell's speech on 9/21/22 and questions answered after the speech:

CHAIR POWELL. Well, so, again, we believe that we need to raise our policy stance overall to a level that is restrictive—and by that I mean, is meaningfully, putting meaningful downward pressure on inflation. That’s what we need to see in the stance of policy. We also
September 21, 2022 Chair Powell’s Press Conference FINAL
Page 10 of 21
know that there are long and variable lags, particularly as they relate to inflation. So it’s a challenging assessment. So, what do you look at? You look at broader financial conditions, as you know; you look at where rates are, real and nominal in some cases; you look at credit spreads; you look at financial conditions indexes.
We also, I would think—and you see this in the—this is something we talked about today in the meeting and talk about in all of our meetings. And you see this, I think, in the Committee forecast. You want to be at a place where real rates are positive across the entire yield curve.

"real rates are positive across the entire yield curve" means that the interest rate minus the inflation rate is a positive number.

[bowlingal]

why don't you ask a financial professional instead of all the yahoos on here?

[Villages Kahuna]

About two weeks ago I increased my allocation to fixed income by purchasing two-year Treasuries paying 4.7%. My thinking was, do I sell equities and their upside (and downside) chances in exchange for a U.S. Treasury bond with NO downside risk but an annual payment of 4.7%? With the strong prospect of a recession facing us in ‘23, probably with more stock market downside, it was an easy decision.

I’m still allocated about 1/3 to equities, all blue chip companies, some paying 2-3% dividends. When the recession is over and our economy and the stock market begins to rebound, I’ll reallocate back to equities. Will I miss the rebound? Sure, but limiting further losses by owning Treasuries paying a reasonable dividend is worth it. I’ll make sure to keep a portion of the portfolio in very short maturities or cash, to be able to roll over into even higher paying bonds or to begin buying stocks when the economic recovery becomes apparent.

As far as the inflation rate being higher than the bond yield, the higher inflation rate only becomes applicable when you actually spend the money. Until then it’s purely a risk-reward investment consideration.

[bragones]

At what point should one change from being an investor to a "saver"?

I've been retired a number of years and have invested all my adult life. Luckily, we have enough non-investment money to live on.

I now wonder if I should gradually begin selling my ETFs, Mutuals, and stocks and move all the money into fixed income.

I know the outcome will be lower and stable, but I won't have to deal with the daily ups and downs.

I'm familiar with the 60/40 rule but wonder if I should go 0/100.

Actually, the 60/40 rule changes over time. I believe it’s something like 100 minus your age. So when you are 100 you will be in all bonds! Personally, I’m in a similar boat as you so I’m not going to change what has worked for me all my life other than factoring in tax implications.

[bragones]

The stock market is going lower in the beginning of CY23, interest rates may or may not go higher from here. as inflation has peaked, or is near its peak, but the federal reserve has not finished yet.

Taxes should not be as much of a consideration to sell stock -> taxes are a by product of success, the more success, the more taxes you will pay, and that sure beats taking a tax loss. . .. .Loss of gains is now on what you should be focused, given retirement and only the lottery will significantly change your income to invest more. Indexes or highly diversified portfolios are a bit different. . I sold a large portion of my stocks over two years ago, very near the peak as the divergences were showing cracks, and I have been 20% -25% equities and 60% bonds and 20+ percent cash ever since.

What is going to happen is that inflation is going to drop very quickly, as the recession and calculation base effects occur. Bond will also be bought very quickly as well, so i would encourage some shift, but that is just me, because I m patiently waiting for 3,000 3,200 on the SP500 to go back in, and trying to find a bottom to trade the long bond, and find zombie companies to continue to short on the way down. You can search on some of my posts

With treasuries, you don't have to wait for the maturity to sell, you can sell them anytime as the price rises and you get capital gains versus interest, and you can move that money back to equities if you like. .

good luck. . .

trader guy

Sounds like market timing. It never worked for me.
FYI: you can also sell CDs purchased through Fidelity on the open market. I will need to check if the proceeds are are taxed as cap gains.

[tovliteuser]

At what point should one change from being an investor to a "saver"?

I've been retired a number of years and have invested all my adult life. Luckily, we have enough non-investment money to live on.

I now wonder if I should gradually begin selling my ETFs, Mutuals, and stocks and move all the money into fixed income.

I know the outcome will be lower and stable, but I won't have to deal with the daily ups and downs.

I'm familiar with the 60/40 rule but wonder if I should go 0/100.

If your non-investment income covers all the bills, why are you even considering doing this? Leave it alone. How many times have we seen the market go through ups and downs? Stop worrying. Turn off the Bloomberg channel. The market will come back. Always has, always will. And the biggest losers will be those that went to fixed income for a little "peace of mind".

[Cobullymom]

4.6 percent on six months Treasury today. All I need risk free,

The inflation rate is nonsense. Control your housing costs and taxes. The rest is insignificant if you have properly saved. Most people have limited time left.

I am a greedy penny pincher but the time has come to spend. Don’t have heirs come to your funeral in a Maserati
The inflation rate is nonsense? What do you mean?

[BlueHeronFan]

I remember a few months ago that I mentioned buying gold as an inflation and investment method. Immediately I was hammered about crypto being being better than gold. Well I have gold in my hands. I can touch it and enjoy watching the gold market. Wonder how that crypto investor feels right now.

[mkjelenbaas]

At what point should one change from being an investor to a "saver"?

I've been retired a number of years and have invested all my adult life. Luckily, we have enough non-investment money to live on.

I now wonder if I should gradually begin selling my ETFs, Mutuals, and stocks and move all the money into fixed income.

I know the outcome will be lower and stable, but I won't have to deal with the daily ups and downs.

I'm familiar with the 60/40 rule but wonder if I should go 0/100.
If you have invested for years I am wondering why you would come to this site for EXCELLENT financial advice? Plus if you have to pay taxes when selling when the market is so LOW - what since does that make - remember - buy low and sell high!!! Time for you to make a decision!

[mkjelenbaas]

4.6 percent on six months Treasury today. All I need risk free,

The inflation rate is nonsense. Control your housing costs and taxes. The rest is insignificant if you have properly saved. Most people have limited time left.

I am a greedy penny pincher but the time has come to spend. Don’t have heirs come to your funeral in a Maserati
But isn’t it true you can only invest $10k per person per year from ira’s to treasury products??

[Tom52]

But isn’t it true you can only invest $10k per person per year from ira’s to treasury products??

I bonds have a low limit but treasury bills have much higher limits. I purchased in excess of $200 K treasury bills on one auction day.

[44Apple]

why don't you ask a financial professional instead of all the yahoos on here?


Because I can tell the difference between the yahoos and those that know what they are talking about.

[melpetezrinski]

Fed Chair Jerome Powell signaled officials will likely take interest rates even higher than the 4.5-4.75 percent they initially projected in September, but might take smaller steps to get there. That could mean rate hikes worth a slower half a percentage point — and eventually a quarter point.Nov 3, 2022 Bank Rate.

Does NOT support the quote, "Jerome Powell, head of the Federal Reserve, has said that the goal is for interest rates to be more than the inflation rate." Now, it is very well possible that the fed funds rate will exceed the inflation rate in the future but I don't think Powell explicitly stated that goal.

[PugMom]

Wife and I living in UK retired 27 years ago. We decided to put all our investments into cash, and avoid the grind of the ups and downs of the S&S market.
We looked for tax free fixed rate government cash bonds, and Government Inflation proof tax free cash bonds.
Ultra conservative, and capital making no spectacular growth, but no spectacular falls either.
In fact with inflation rising all time in UK at present, we are doing very nicely thank you!
It worked for us.
Some folks love the daily market gamble, but we wanted no more of that.
Some even aim to be among the richest residents in the cemetery, but we definitely don't want that either!

will the new fuel prices be a problem for you? i read it's going up considerably.

[manaboutown]

Well, I for one appreciate the serious responses. Most of the folks who were able to retire and move to The Villages got here through hard work and persevered in managing their finances well enough to retire here. We all have different investment experiences and outlooks but apparently most of them worked at least well enough to get and sustain us here.

[RickyLee]

why don't you ask a financial professional instead of all the yahoos on here?

I personally like hearing others thoughts & strategies. Knowledge is priceless

[SHIBUMI]

Most folks that play in the stock market at an older age do it as a hobby. You don't gamble what you can't afford to lose. Folks living off of their money are glad to see cd rates up from
2%. 5-10 years rates are lower because banks believe that rates will go back down in the short term. You can get 5+ % on 5-10 year cd's, BUT, they are not call protected. This means banks can call, redeem, them at their whim. That whim happens when interest rates go back down, like in a recession to promote business. Goal is to get the longest term protected rate you can, then sleep easy.
The federal reserve, does what it says it will do. Stock people try to bend and twist their meaning. The rate will go to 5 or 6 until inflation starts to cave. Then it will sit there for awhile, the banks are saying 2-3 years. Enjoy that guaranteed money while you can.
Stock pickers are just playing bingo with the market as they don't have much to do. Get out and enjoy what life you have left. Inflation is a supply side issue that will still take 2-3 years or more to conquer. Sleep better at nite with fixed income. That window will close soon enough. BUT, if you really enjoy playing Bingo, have at it, just stop complaining.

[chrissy2231]

Obviously the higher the risk, the higher the return. Just remember, today's 5 yr T note rate in 3.96%, inflation is almost double that.
ibond 6+%

[Boomer]

………..

[kkingston57]

Why not consult a fee based financial advisor you vet ahead of time who will sign on to act as a fiduciary? Some people experience extreme stress making big financial decisions, especially irrevocable ones such as selling securities which may bring about huge tax bills or significant losses. Frankly, before I make big decisions in areas with which I am unfamiliar, unknowledgeable or uncomfortable I try to consult one or more experts

BEST answer to this question. Everybody is different as shown in the advice(?) given here. Too many good/safe options out there.

[kkingston57]

It’s all about cash flow. Figure out what you need and plan accordingly. If you can’t sleep at night it’s not the right strategy

My broker has the same advice(sleep at night)

[HJBeck]

Good question. I believe if one is in their 70's 60/40 is way too high. However, what happens to your assets if inflation continues at the current pace for some time to come? If you make your change in strategy now, are you losing potential gains if the market moves up from the lower position they are currently in. I don't think there is a definitive answer to this question. A lot depends on your risk tolerance. Good luck!

[rsmurano]

Because Jerome Powell, head of the Federal Reserve, has said that the goal is for interest rates to be more than the inflation rate.

There are more interest rate hikes to come.

If you decide to go fixed income, perhaps start moving just a portion of your funds, and add more later as interest rates increase.
You should have got out a year ago. I got out all of my non-taxable stocks last January and have saved a lot of $$$ by doing so. I have never got out of the market when things got bad in the past but this is different. We haven’t seen the lows yet in this downturn, but you might be too late to sell.
The 60/40 method is for people that are scared about the market. I’m 100% in stocks/funds because that’s where you make your money. Some people will try to tell you that bonds are safer which isn’t true, in 2008, bonds went down almost as much as stocks, and the last few years bonds have performed terrible.
Even today, you can make some really good money in certain areas but you have to be more picky. I’ll get in to a fund for a couple months, make 6 digits, then get out and then get back in again when the timing is right. (I’ve done this twice this year alone). If you have cash on hand you can do this pretty easy, and if you do this in non-taxable accounts, you don’t have to worry about paying capital gains taxes.

[jimjamuser]

At what point should one change from being an investor to a "saver"?

I've been retired a number of years and have invested all my adult life. Luckily, we have enough non-investment money to live on.

I now wonder if I should gradually begin selling my ETFs, Mutuals, and stocks and move all the money into fixed income.

I know the outcome will be lower and stable, but I won't have to deal with the daily ups and downs.

I'm familiar with the 60/40 rule but wonder if I should go 0/100.
Keep the ETFs and sell the mutuals and stocks and convert them to bonds or ETFs for fixed income.........IF you believe that a recession is in the near future.

[jimjamuser]

I would have agreed with you 20 years ago, when I could live off of my money market and bond monthly interest checks. But I don't think the Federal Reserve will ever again let savers get a fair rate of return on their fixed rate income investments. They want to encourage more borrowing and less saving.
I believe that the Fed. has the MANDATE to try to keep INFLATION around 2%. They control the prime borrowing rate to achieve the 2% inflation rate. Today with inflation high and rising, they try to dampen economic growth and drive inflation back to 2%. To accomplish this, the Fed must walk a tightrope to bring down inflation without causing a RECESSION. Historically, most often, they have FAILED !

[jimjamuser]

Because Jerome Powell, head of the Federal Reserve, has said that the goal is for interest rates to be more than the inflation rate.

There are more interest rate hikes to come.

If you decide to go fixed income, perhaps start moving just a portion of your funds, and add more later as interest rates increase.
Yes, because the Fed is trying to drive INFLATION down. Older retired people are the ones MOST hurt by inflation because they are on fixed incomes and NOT working. So remember, the Fed. is YOUR friend.

[jimjamuser]

The stock market is going lower in the beginning of CY23, interest rates may or may not go higher from here. as inflation has peaked, or is near its peak, but the federal reserve has not finished yet.

Taxes should not be as much of a consideration to sell stock -> taxes are a by product of success, the more success, the more taxes you will pay, and that sure beats taking a tax loss. . .. .Loss of gains is now on what you should be focused, given retirement and only the lottery will significantly change your income to invest more. Indexes or highly diversified portfolios are a bit different. . I sold a large portion of my stocks over two years ago, very near the peak as the divergences were showing cracks, and I have been 20% -25% equities and 60% bonds and 20+ percent cash ever since.

What is going to happen is that inflation is going to drop very quickly, as the recession and calculation base effects occur. Bond will also be bought very quickly as well, so i would encourage some shift, but that is just me, because I m patiently waiting for 3,000 3,200 on the SP500 to go back in, and trying to find a bottom to trade the long bond, and find zombie companies to continue to short on the way down. You can search on some of my posts

With treasuries, you don't have to wait for the maturity to sell, you can sell them anytime as the price rises and you get capital gains versus interest, and you can move that money back to equities if you like. .

good luck. . .

trader guy
Very good and informative post. The more taxes that I would pay on my investments the better .......because it means that I am succeeding and getting good gains. Concentrate on making GAINS and the taxes will take care of themselves.

[jimjamuser]

About two weeks ago I increased my allocation to fixed income by purchasing two-year Treasuries paying 4.7%. My thinking was, do I sell equities and their upside (and downside) chances in exchange for a U.S. Treasury bond with NO downside risk but an annual payment of 4.7%? With the strong prospect of a recession facing us in ‘23, probably with more stock market downside, it was an easy decision.

I’m still allocated about 1/3 to equities, all blue chip companies, some paying 2-3% dividends. When the recession is over and our economy and the stock market begins to rebound, I’ll reallocate back to equities. Will I miss the rebound? Sure, but limiting further losses by owning Treasuries paying a reasonable dividend is worth it. I’ll make sure to keep a portion of the portfolio in very short maturities or cash, to be able to roll over into even higher paying bonds or to begin buying stocks when the economic recovery becomes apparent.

As far as the inflation rate being higher than the bond yield, the higher inflation rate only becomes applicable when you actually spend the money. Until then it’s purely a risk-reward investment consideration.
I agree with that reasoning about the recession and the needed adjustments.

[jimjamuser]

If your non-investment income covers all the bills, why are you even considering doing this? Leave it alone. How many times have we seen the market go through ups and downs? Stop worrying. Turn off the Bloomberg channel. The market will come back. Always has, always will. And the biggest losers will be those that went to fixed income for a little "peace of mind".
The problem for some people or people with some unexpected bills like residents hit with hurricane Ian or big medical bills.......is that they MAY have to sell their equities. Then they are in the BAD economic situation of having bought HIGH originally and NOW having to sell LOW. Many people get burnt in the stock market by buying high, and selling low. NO one likes to admit to it ........yet it happens !!!!!!!

[jimjamuser]

The inflation rate is nonsense? What do you mean?
Good question, I don't believe that "inflation is nonsense". It would only be nonsense to someone that does NOT have to spend money. I can only think of an Eskimo hunter-gatherer to whom it would apply.

[jimjamuser]

I remember a few months ago that I mentioned buying gold as an inflation and investment method. Immediately I was hammered about crypto being being better than gold. Well I have gold in my hands. I can touch it and enjoy watching the gold market. Wonder how that crypto investor feels right now.
That's the thing about investments, NOT everyone is a winner, especially in the short run. You get in at the wrong point in an economic cycle and you LOSE.

[melpetezrinski]

Yes, because the Fed is trying to drive INFLATION down. Older retired people are the ones MOST hurt by inflation because they are on fixed incomes and NOT working. So remember, the Fed. is YOUR friend.

"Older retired people are the ones MOST hurt by inflation because they are on fixed incomes"

Actually poor people are hurt the most by inflation. They usually have no savings/investments to earn the higher interest and generally don't see pay increases that match the level of inflation. On the hand, the "older retired people" usually have social security, which IS indexed for inflation. If you are talking about pensions when you mention "fixed income" well, something tells me that you will be way ahead of the "poor" community if your are collecting social security AND a pension. IMO!

[jojo]

Why not consult a fee based financial advisor you vet ahead of time who will sign on to act as a fiduciary? Some people experience extreme stress making big financial decisions, especially irrevocable ones such as selling securities which may bring about huge tax bills or significant losses. Frankly, before I make big decisions in areas with which I am unfamiliar, unknowledgeable or uncomfortable I try to consult one or more experts

It's difficult to find financial advisors who will review a portfolio only. Everyone I've talked to wants to manage it. I would particularly like to find a financial advisor strong in advising for tax purposes.

[CoachKandSportsguy]

Related to all this is, how long do you hold after you buy? And when do you cash in your stock gains? After 10%? 20%?

I'm thinking of targeting my IRA oil/energy holdings first as they have basically doubled and I wonder if they might begin to tail off. I don't want to lose those gains.

First, well done on the gains. From a portfolio point of view, that is if you look at your pile of money and investments as a portfolio, the large gains become a higher percentage of the portfolio, which means you are less diversified, and you should sell at least 50% to 75% of the position to keep the gains, as well to rotate into the undervalued stocks or sit in cash and wait for the next undervalued, high return potential sector.

Second, trading is about loss aversion, both loss of principal and loss of gains. . . and not sure how you picked that sector, then repeat that sector selection again for other sectors

gains can add up

[Two Bills]

will the new fuel prices be a problem for you? i read it's going up considerably.

Not too bothered. Everything is going up.
Wife and I will get a nice pension rise, inline with inflation.
Lots of 'free' money being thrown around, whilst avoiding tackling the cause of the problem.
We are going through one of our 'Financial madness' periods at the moment.
The UK government are experts at the great sport of Foot Shooting.'
Give it a few years and it will go back to some semblance of fiscal sanity..
(Well at least until the next time.)

Borrow your way out of debt seems to be the mantra at moment! :ohdear:

[rsmurano]

How long do you hold onto your stocks/etf’s/funds? Forever until you shouldn’t.
Most of my taxable funds have been invested for many years/decades and some not as long because the economy had changed enough to hit a particular sector hard (for example, in the past oil, tech).
When you have good funds/stocks, which meet this criteria: low cost (< .2%), low risk, high return, low turnover (high turnover costs more and you pay higher taxes), high dividends (3% or higher), and the managers must have these funds in their portfolio, why sell?
We live off our dividends from our taxable accounts and we use the bucket system to live on.
For our non-taxable accounts, I day trade (day/days/week/month) during this recession/downturn, or when times are good, use the same criteria to purchase stocks/funds as my taxable accounts.
No bonds, no annuities, no mixed/balanced funds, just normal low cost/low risk/high return equities.

[jimjamuser]

"Older retired people are the ones MOST hurt by inflation because they are on fixed incomes"

Actually poor people are hurt the most by inflation. They usually have no savings/investments to earn the higher interest and generally don't see pay increases that match the level of inflation. On the hand, the "older retired people" usually have social security, which IS indexed for inflation. If you are talking about pensions when you mention "fixed income" well, something tells me that you will be way ahead of the "poor" community if your are collecting social security AND a pension. IMO!
It is true that "the poor" are going to be affected negatively when inflation is high. But, I was thinking that a large % of "the poor" are young and working. Because they are young and working they can adjust their lives MORE easily than older retired people. Being young they have more FLEXIBILITY to change their lives than older retired folks. Younger people can relocate easier to increase their earnings. Young people have the energy and ambition to work more hours or get a 2nd job. Older people have much LESS flexibility.

I can see the case for saying that poor people are the MOST affected by inflation. And experts may say that. But, I think that it is debatable. Rapid inflation is difficult and confusing for all economic groups. And there are subgroups like non-working poor and working retired people, which confuses the debate as to which group is most adversely affected by inflation.

[justjim]

Pardon the off topic diversion but 40% of Americans don’t have $400.00 in cash. That would be over 120 million people. This group is definitely hurt by inflation. Many are hurt more by their inability to budget and effectively handle their own financial affairs. Parents and our education system have failed IMHO.

[justjim]

I believe that the Fed. has the MANDATE to try to keep INFLATION around 2%. They control the prime borrowing rate to achieve the 2% inflation rate. Today with inflation high and rising, they try to dampen economic growth and drive inflation back to 2%. To accomplish this, the Fed must walk a tightrope to bring down inflation without causing a RECESSION. Historically, most often, they have FAILED !

Who gives the mandate of 2% inflation? Keeping inflation at 2% is not sustainable. If there is a mandate (?) it realistically should be more in the 3%-4% range.

[CoachKandSportsguy]

Sounds like market timing. It never worked for me.
FYI: you can also sell CDs purchased through Fidelity on the open market. I will need to check if the proceeds are are taxed as cap gains.

Why would someone buy an interest rate instrument with penalties for selling, no potential capital gains, and less interest than the market rates from an institution which takes a huge management fee from the interest?

CDs should seldom/never be purchased as they are a very inefficient financial instrument

just my opinion from looking at the sales material as compared to other similar competitive instruments.

[Stu from NYC]

why don't you ask a financial professional instead of all the yahoos on here?

As the old saying goes ask 10 economists for prediction and you will get 11 different answers.

If anyone can consistently time the market they will be filthy rich and no need to do anything but lay on a beach drinking margaritas.

When the wizard of Omaha cannot time the market why would you think anyone else could?

Common wisdom is everyone expects a recession, will there be one who knows if there is one mild or strong also who knows.

One of the best long term bond funds out there is Fidelity Contrafund that goes the other way and is normally very successful.

[Boomer]

As the old saying goes ask 10 economists for prediction and you will get 11 different answers.

If anyone can consistently time the market they will be filthy rich and no need to do anything but lay on a beach drinking margaritas.

When the wizard of Omaha cannot time the market why would you think anyone else could?

Common wisdom is everyone expects a recession, will there be one who knows if there is one mild or strong also who knows.

One of the best long term bond funds out there is Fidelity Contrafund that goes the other way and is normally very successful.

I used to sometimes copy Will Danoff’s homework, when I first started trading online. I looked at his 10 top holdings from time to time, and then looked further into any of them that caught my eye. (Yes. I know. I will now be chastised by some random poster for not consulting a professional.)

Btw, some of you, especially if interested in behavioral economics, might want to read — or reread — Freakonomics. I recently listened to the original, on Audible, and am now into the next one and some of the podcasts. I think the first one was written somewhere around 2005. Looking at the original Freakonomics from the future of 2022 can be a little eerie, but thought provoking.

Boomer

[CoachKandSportsguy]

Btw, some of you, especially if interested in behavioral economics, might want to read — or reread — Freakonomics.

Boomer

Absolutely! Handling money is always behavioral, as in the modern society, its the currency of power! Another good book is "The Psychology of Money: Timeless lessons on wealth, greed, and happiness" by Morgan Housel

Amazon.com (https://www.amazon.com/Psychology-Money-Timeless-lessons-happiness/dp/0857197681/ref=asc_df_0857197681/)

always learning

day trader guy

[Stu from NYC]

As the old saying goes ask 10 economists for prediction and you will get 11 different answers.

If anyone can consistently time the market they will be filthy rich and no need to do anything but lay on a beach drinking margaritas.

When the wizard of Omaha cannot time the market why would you think anyone else could?

Common wisdom is everyone expects a recession, will there be one who knows if there is one mild or strong also who knows.

One of the best long term bond funds out there is Fidelity Contrafund that goes the other way and is normally very successful.

Oops meant to say growth stock fund not bond fun which is definitely Contrafund.

[chrissy2231]

At what point should one change from being an investor to a "saver"?

I've been retired a number of years and have invested all my adult life. Luckily, we have enough non-investment money to live on.

I now wonder if I should gradually begin selling my ETFs, Mutuals, and stocks and move all the money into fixed income.

I know the outcome will be lower and stable, but I won't have to deal with the daily ups and downs.

I'm familiar with the 60/40 rule but wonder if I should go 0/100.
I did. If you have enough for the rest of your life, more interest is not necessary. I found I Bond 6+%, also CD's 3-4.5%

[rmd2]

Well, I for one appreciate the serious responses. Most of the folks who were able to retire and move to The Villages got here through hard work and persevered in managing their finances well enough to retire here. We all have different investment experiences and outlooks but apparently most of them worked at least well enough to get and sustain us here.

Thank you. Very well stated.

[rmd2]

I did. If you have enough for the rest of your life, more interest is not necessary. I found I Bond 6+%, also CD's 3-4.5%

I feel the same way. I am fairly happy with the bond and CD rates. I got out of equities and have done just fine.

[Stu from NYC]

I feel the same way. I am fairly happy with the bond and CD rates. I got out of equities and have done just fine.

As long as your funds last year the rest of your life given the high inflation rates we now have you are ok.

[Aces4]

As long as your funds last year the rest of your life given the high inflation rates we now have you are ok.

Not really, many of the residents in the nice assisted living center where my mother resided in the last years of her life were unable to pay the freight and they received the same care as she did. No worries.

[Stu from NYC]

Not really, many of the residents in the nice assisted living center where my mother resided in the last years of her life were unable to pay the freight and they received the same care as she did. No worries.

What happens if things change in the center and she wants to move elsewhere? Not quite so simple unfortunately/

[retiredguy123]

Not really, many of the residents in the nice assisted living center where my mother resided in the last years of her life were unable to pay the freight and they received the same care as she did. No worries.
If it was an "assisted living" facility, not a nursing home, it is unlikely that a typical facility would care for very many residents without some type of special State authorized Medicaid program approval. Most assisted living facilities are "for profit" businesses that will require non-paying residents to move out. Some states have a special Medicaid program that will pay for a very limited number of assisted living residents. By contrast, most "nursing homes" rely heavily on the Medicaid program to fund their facility. It is not unusual for as many as 90 percent of a nursing home's residents to be on Medicaid.

[Aces4]

What happens if things change in the center and she wants to move elsewhere? Not quite so simple unfortunately/

My mother and others were paying the whole freight, then there were others who had no money and received the same care and probably could only contribute their monthly SS check. When you reach an advanced age and require assisted living, you’re not out shopping for new digs every year. It was a beautiful facility.

[Aces4]

If it was an "assisted living" facility, not a nursing home, it is unlikely that a typical facility would care for very many residents without some type of special State authorized Medicaid program approval. Most assisted living facilities are "for profit" businesses that will require non-paying residents to move out. Some states have a special Medicaid program that will pay for a very limited number of assisted living residents. By contrast, most "nursing homes" rely heavily on the Medicaid program to fund their facility. It is not unusual for as many as 90 percent of a nursing home's residents to be on Medicaid.

Thus, my point. Why worry about having enough money, the government will pay your way when you’re old. It was a real eye opener for me over ten years ago.

My parents were not wealthy but saved and planned carefully. It doesn’t take long to blow through a hundred thousand dollars for assisted living care and even faster if the patient requires “memory care”.

[Fltpkr]

At what point should one change from being an investor to a "saver"?

I've been retired a number of years and have invested all my adult life. Luckily, we have enough non-investment money to live on.

I now wonder if I should gradually begin selling my ETFs, Mutuals, and stocks and move all the money into fixed income.

I know the outcome will be lower and stable, but I won't have to deal with the daily ups and downs.

I'm familiar with the 60/40 rule but wonder if I should go 0/100.

To the OP:

I suggest you post this question in the Boglehead financial forum. It is easy to find if you google “bogleheads”. There are some very savvy folks there who I am sure will give you some valuable additional input. Good luck.

[retiredguy123]

Thus, my point. Why worry about having enough money, the government will pay your way when you’re old. It was a real eye opener for me over ten years ago.

My parents were not wealthy but saved and planned carefully. It doesn’t take long to blow through a hundred thousand dollars for assisted living care and even faster if the patient requires “memory care”.
That is one reason that I would never recommend buying long term care insurance. If you end up in a nursing home, they will be happy to take your long term care insurance benefits, but they won't provide any better care. You paid thousands of dollars for insurance premiums, but you will be living with people on Medicaid who get the same care and didn't pay any premiums.

[kkingston57]

It is true that "the poor" are going to be affected negatively when inflation is high. But, I was thinking that a large % of "the poor" are young and working. Because they are young and working they can adjust their lives MORE easily than older retired people. Being young they have more FLEXIBILITY to change their lives than older retired folks. Younger people can relocate easier to increase their earnings. Young people have the energy and ambition to work more hours or get a 2nd job. Older people have much LESS flexibility.

I can see the case for saying that poor people are the MOST affected by inflation. And experts may say that. But, I think that it is debatable. Rapid inflation is difficult and confusing for all economic groups. And there are subgroups like non-working poor and working retired people, which confuses the debate as to which group is most adversely affected by inflation.

Younger people are mostly affected by increase in rents and housing prices. Most retired people own home outright(I would hope so) and less affected by the increase in housing prices.

[Aces4]

That is one reason that I would never recommend buying long term care insurance. If you end up in a nursing home, they will be happy to take your long term care insurance benefits, but they won't provide any better care. You paid thousands of dollars for insurance premiums, but you will be living with people on Medicaid who get the same care and didn't pay any premiums.


I agree and then there are the instances where those insurance carriers went under.

[kkingston57]

Why would someone buy an interest rate instrument with penalties for selling, no potential capital gains, and less interest than the market rates from an institution which takes a huge management fee from the interest?

CDs should seldom/never be purchased as they are a very inefficient financial instrument

just my opinion from looking at the sales material as compared to other similar competitive instruments.

Agree with you but tell that to the people who worked for and invested in companies like ENRON. 2 years ago someone tried to sell me bit coins. Politely passed and could have made quick money. If I still had them, would have been down at least 50%. CD's now at 4%. Beets the heck out of my Well Fargo which is paying less than 1%.

[kkingston57]

I did. If you have enough for the rest of your life, more interest is not necessary. I found I Bond 6+%, also CD's 3-4.5%

Those are good(notice I did not give a more positive description) now. Last year cd's were hardly sold and/or bought. At least with them, the ONLY downside is that they do not keep with inflation.

[Boomer]

That is one reason that I would never recommend buying long term care insurance. If you end up in a nursing home, they will be happy to take your long term care insurance benefits, but they won't provide any better care. You paid thousands of dollars for insurance premiums, but you will be living with people on Medicaid who get the same care and didn't pay any premiums.


Although I almost always agree with every post you write in the investment forum, I see LTC policies differently……

I think of it as asset protection. I am not into living our lives to try to save money for heirs — they’re doing fine — but if the LTC policy ends up protecting assets for the spouse, that can be life -changing.

Certain LTC policies (maybe all) cover assisted living. I don’t think assisted living is covered after Medicaid spend-down. (I might be wrong about that, but I don’t think so.) If assisted living is needed, that can be when the finances of a couple can get hit hard.

(I am not selling LTC policies. :) My point is mostly moot here anyway because after a certain age, buying a policy might not be possible.)

Buying into a non-profit CCRC while still independent can function as an LTC policy in a way, but you have to be able to afford the buy-in and the monthly fees and get in while you can. (Actuaries must do the scrutinizing for CCRCs.) With CCRCs, the decision to go there while still independent can be difficult for some.

……..interesting discussions in this thread…….

Boomer

[retiredguy123]

Although I almost always agree with every post you write in the investment forum, I see LTC policies differently……

I think of it as asset protection. I am not into living our lives to try to save money for heirs — they’re doing fine — but if the LTC policy ends up protecting assets for the spouse, that can be life -changing.

Certain LTC policies (maybe all) cover assisted living. I don’t think assisted living is covered after Medicaid spend-down. (I might be wrong about that, but I don’t think so.) If assisted living is needed, that can be when the finances of a couple can get hit hard.

(I am not selling LTC policies. :) My point is mostly moot here anyway because after a certain age, buying a policy might not be possible.)

Buying into a non-profit CCRC while still independent can function as an LTC policy in a way, but you have to be able to afford the buy-in and the monthly fees and get in while you can. (Actuaries must do the scrutinizing for CCRCs.) With CCRCs, the decision to go there while still independent can be difficult for some.

……..interesting discussions in this thread…….

Boomer
I understand your opinion. LTC insurance is only appropriate for people who have modest assets. It is not appropriate for those who either have no assets or wealthy people who can self insure. I'm pretty sure LTC insurance can be used for assisted living, and if you go into a nursing home, you will need to exhaust all available LTC benefits before you will qualify for Medicaid. The LTC benefit eligibility is determined by your health condition, not by where you live. One thing I don't like about LTC insurance is that your eligibility for benefits is determined by the insurance company, not you or a third party.

[manaboutown]

Most of my life I have kept almost all my financial eggs in one basket (commercial real estate) and watched and tended to it very carefully. But now that 80 is in my rear view mirror I consider it wise to diversify my financial assets. This year I sold a property and expect to close on the sale of another in early 2023. What I did is put about 30% of my gain into conservative solid dividend paying stocks and ETF's which naturally have lost some value in the current market. 70% of the gain I placed in 6 month T bills which will all mature in early 2023 before I need half of it to pay the IRS tax on a huge capital gain. If the early 2023 sale goes through as expected I will place all the after tax proceeds into 6 month T bills. Why? I expect interest rates to go up, how much I do not know, the stock market to likely sink a little more with some upside riffles along the way. I see the world as very unstable now, Russia's invasion of Ukraine, the actions of the CCP, various factors at work affecting our energy supply and much more. At such times cash is king. I plan to retain for now my remaining real estate properties as they provide a nice income stream as well as the likelihood of appreciation over the long term.