When to take your retirement to the sidelines
 

To me, the recent market run has been impressive....any thoughts on when to pick some flowers here?

In a historical sense, now is a good time.

Have you made enough money that you feel comfortable leaving some on the table to avoid potential capital losses?

It's been widely stated on the RE thread that trying to time the peak of a market is a fool's errand. Can you survive the market beating you?

Work is still too much fun, what can you get for a golden goose these days?
Jim

Sell in May and go away.

How old are you?

Re: When to take your retirement to the sidelines
 

assuming you are referring to retirement investments,

you should have a written plan that includes target asset allocation, depending on age and circumstances, a simple target might be something like 70%:30$(stocks:fixed). You then periodically re-balance. The period for re-balancing can be 1 x/ year to 12 x/ yr depending on how closely you want to follow it. The re-balancing period is another part of the written plan you have.

If it is time to re-balance say, now, then you sell some of your stocks that have done well and put the proceeds into fixed investment like bonds and cash. You sell enough to get back to your preferred asset allocation. Back in 2001 you would have been selling fixed and buying stocks.

re-balancing has the primary benefit of forcing you to sell high and buy low.

You asset allocation can be as simple as stocks;fixed to far more specific slicing of the financial markets again a more complicated allocation might be

70% stock further broken into 15% LV/20%LB/5%LG 5% MV/10%MB 5%SV/10%SB(this gives a value bias to you stock portfolio)

30%fixed further broken into 15% short int corp/15% cash

whatever allocation you use needs to be appropriate to you age and risk tolerance generally the younger you are the more risk tolerant you are the higher % of stocks.

Funny you should ask. My frau and I picked a very large bunch of flowers at close of business today. No plans to do anything for a few months.

I would sell now. Market correction is coming.

Actually, Cindy & I have been "picking flowers" all along. Approx. 4% per year from the equity side. But then, I am retired...

Market timing is a notoriously risky way to invest. That's why I askd about your age. Unless you're at retirement age, I would not suggest it.

I'm "only" 42. I hate seeing my retirement lose ground...especially in big chunks after a nice run...seems like I should have been smart enough to see it coming...like I feel one coming now....but then it's "when to get back in?"

Nobody can answer this question. There are people who get pretty good at timing, studying various indicators...then the market throws a curve ball. It all depends on your tolerance of risk...and how much you wish to place in equities and how much in bonds. Then the risk varies in those categories...it's a semi complicated study.

VERY few people outperform the market by trading in a few stocks. The more they trade, the less likely they are to beat the total market or S&P 500 indexes...Less than 5% of fund managers beat the market index in any given year. And the names in that 5% also change. Last year's whiz kid can become this year's dunce...

You might check out a target retirement account. Vanguard offers a good one. Since the investors with Vanguard actually own Vanguard, the fees are low. Basically, with a target retirement account, you tell them your age, your hoped for retirement date, and they asset allocate for you. Less equities, and more bonds as you get closer to retirement. Just feed it every month...and tune out the noise! It's a "no brainer" account. Wish I'd done that...

I'll confess...I consider John Bogle, the founder of Vanguard, to be a genius in the field of investing. Nobody has done more to help the small investor...