Never tell people how to spend their money

Yes I met with my investment guy yesterday. We both agreed there is a big chance of major volatility in the coming months. Based on possible major changes in federal operations, we decided to de-risk the portfolio, so I’m not so exposed. I took my gains, and now in other sectors.

The indices are dominated by just a few stocks with enormous capitalization. So everybody is holding the same few stocks whether we know it or not. Another thing to be worried about. Or not.

While I possess advanced degrees, and I am a longtime member of Mensa, I do not have the hubris that many others might. I do not think I cannot outsmart or out-time the markets. The only one that can do that probably got a fiddle of gold to be able to do it. The Oracle.

So, like you, I stick to two strategies: Buy and Hold, and Dollar Cost Averaging. I concur with your perspective, Rich42.

As long as the US dollar is the reserve currency there will be an upward bias to US equities. So, what goes up does not necessarily go down. But the upward trend is not a straight line. Many end up buying high and selling low. What has worked for me has been to decide on a distribution of equities and fixed income and other assets such as real estate. The idea is to have some orthogonality to the portfolio. For many years I was aggressive with equities, as I've gotten older, I reduced my exposure and at 70 I fixed it to 50% to keep up with inflation. I periodically rebalance to maintain the 50% equities. If the market gets really frothy or depressed, I may do an additional rebalance. I have about 5-10% in a brokerage account to have fun with and while I often pick losers or mediocre stocks, every now and then having one do >10 fold can put a smile on my face. Most importantly, I sleep well at night.

When is enough enough?

Based on one’s lifestyle, is it not possible to reach a level of assets such that it is no longer necessary to concern yourself with stock market fluctuations? In other words, just invest in those vehicles that provide guaranteed returns. I’m not necessarily speaking of annuities. Mark Twain: “I’m more concerned about the return OF my money than the return ON my money”.
There must be some amount that even inflation would not be a concern.
If your annual expenses average “X” then what multiple of “X” would be enough? Or, at some point, does investing become more of a hobby than a necessity? Also, what would such a conservative portfolio look like?

All depends upon your lifestyle needs. .
some people can get along fine on social security.
other people want to travel the world, or have two/three homes.

its about lifestyle needs and wants. .

pick a number for your annual lifestyle cost, and then work from there.

Warren Buffet is afraid, he is like 75% in cash i read.

lac
 

Most cool. I presume that lithium would fall into the "energies" section under the Commodity Groups, no?

The road to Hell is paved with good intentions! The road to Financial Ruin is paved with discount brokers trade tickets!

Thank you for this helpful spreadsheet. Will the information continue to update as time goes on or is this a subscription of some sort?

Everything in investing is "it depends." It depends a lot on time frame and expected disbursements versus reserves. Chances are that even a 40% decline in the S&P 500 - if it happens - would be reversed within 10 years. But if you don't have 10 years or need 50% or more of your nest egg to survive the next 5 years, then I'd be no more than 20% in equities. I'm 68 and believe I have a reasonable expectation of living a decent life 15 - 20 years from now. I have what I consider a neutral position for someone my age - about 50% in equities, spread among different indexed ETFs with diverse schemes and objectives and 50% in mostly low-risk short-duration income generating assets. I'm a longtime quantitative analyst. Historically, high multiples do not cause crashes but just measure potential susceptibility to a major correction. Lurking in the geopolitical landscape are many potential "global disasters" - my experience teaches me that these are best ignored when it comes to investing. The market is generally a function of economic productivity in 10-year increments but not necessarily year-by-year.

Do I see the seed of potential scenarios (Tariff wars, WWIII, massive unemployment of government workers in the name of deficit reduction) ? Sure, but betting against the US market is seldom profitable for 10-year periods and predicting the short-term is tough. Remember, for personal wealth, the effects of stock market volatility on your nest egg should never be measured by peak-to-trough which makes for jotting news headlines. And under no circumstances should you pull out when the market is down substantially. Chances are you will get all of it back if you wait long enough.

Predicting short-term movements is a fool's game. I'm neither very bullish or bearish right now, just neutral. My advice - stay the course.

I agree with Plinker above re "when is enough enough?" I like a quote I heard years ago...."When you've won the game, stop playing!"

That may be perfectly sound investment advice. But, beware that SOME "investment guys" get paid based on "churning" clients.