Does anybody here think the market is way too high and a crash is around the corner? Our friend who invests our Roth has started to do A LOT of selling. He knows we want to be fully invested, but now he has an awful lot in cash. I don’t want to question him because he is very sensitive when we start asking why we aren’t fully invested, but I wonder if he’s just briefly doing some profit taking, or if everyone else is also deciding to have a much greater percentage of cash.
@IxnayBob
Yes, I remember the “Japan Inc.” days.
Are you trying to throw cold water on my good returns for the past two years? 
I’m thinking the tax-free municipal bonds are always an option, as are CDs and other cash options. Did move some funds from stock index to US govt bond index in H’s retirement account. The market has had a very long bull run and is very fickle (it could continue to climb or it could crash–soon or later). It’s tough to know what to do. We also have a lot of cash and I’m thinking of liquidating some of our individual stocks, but haven’t decided.
@HImom, :I empathize with you and dstark. I have a child whose future I am guardedly optimistic about, so knock wood.
I know someone who has been sitting on cash since S&P was at 1400.
I am not an expert in the market. But I think it is going way higher in short term. Comparing any where else in the world, US probably has the best economy right now. All the hot money printed globally are coming here, I think.
BTW, my YTD gain from investments is about 30K so far. The MO shares alone are up more than 10%. DW got in AAPL back when it was around $500 (pre 1:7 split).
AttorneyMother, I understand you are not a trader. I don’t trade much anymore myself.
I just wanted you to understand that I have a lot of experience in the financial markets and I still can’t predict the future.
I also like William Bernstein’s chart. If inflation averages 2 percent a year for 30 years, I will do a little dance in 30 years (If I am still alive)
I think index funds are great. If we are going to be invested for 30 years…we kind of have to ignore the blips along the way if possible. Difficult to do at times.
Actually, we were concerned about BOTH kids and if they’d be able to finish HS and complete college and get jobs. So far, we have one well-launched, so we do have some cautious optimism. We have the other under the treatment of very dedicated specialists, who have had considerable success in similar and even more severe cases. Fortunately, we do not spend as much as we earn each year in retirement, so we are able to continue saving.
@AttorneyMother, no cold water, but I would suggest at least 20% in bonds. YMMV. I still have gains, even with more and more in bonds. I expect to land, very soon, at 50/50.
@busdriver11, I don’t know if the market is too high, and I don’t know if it will crash. Since I never bet everything on one asset class, I’m relatively safe. If everything goes down the tubes and doesn’t recover during my lifetime, I will wish that I had picked out a nice cave and invested in canned goods instead of index funds.
Thanks everyone!
Agree. 50% of my 401K is in an S & P index fund now. It has the lowest expense ratio and the return has been very good in the last couple of years.
My tax-advantaged accounts are pretty close to 50/50 Vanguard Total Stock and Vanguard Total Bond. For sentimental reasons, there is a sprinkling of Berkshire Hathaway also.
Himom,
I will hit medicare way before DH. He is many years away from that benchmark (lucky guy). And he’s the one with a health issue to calculate into the equation.
For years in our local paper, there were many financial columns extolling the virtue of the “couch potato index.” I always liked the notion. Apparently, there are also other recipes:
http://assetbuilder.com/couch_potato/couch_potato_cookbook
Now that I have re-engaged in reviewing our retirement portfolio, I will have to choose one allocation formula and see how I feel about heading in that direction. It’s the idea of incurring gains to rebalance that I don’t want to do right now. I’ll try and rebalance with new funds.
Yea, I am quite a few years from Medicare myself, tho H has qualified for some time. Fortunately, we are covered by his employer as H is a retired annuitant. It gives us very good coverage, even from my chronic health issues. We are very grateful as it relieves our worries. The max out of pocket (exclusive of premiums) per year is $3K, which is amazing!
@AttorneyMother, there is always debate about how important rebalancing is. “Staying the course” and avoiding market timing (ie, reverse rebalancing) are much more important. I personally don’t sell anything in taxable to rebalance, but do put new money into whatever is lagging. In tax-advantaged, I have an AA, and the funds are rebalanced with one click, no tax consequences.
I looked at the couch potato portfolio, of which there are fans at Bogleheads. I have quite a bit of legacy TIPS, still, and I’m a fan, but I think that portfolio is too heavy on TIPS. We had some actual TIPS (ie, bonds, not a fund) that matured in the past year, and I have not replaced them. We do buy the $10k of I-Bonds every year that one is allowed.
if he/we had access to ongoing healthcare as a retiree he’d be retired now, most likely. You are lucky, Himom.
@lxynayBob, That’s a great chart on #5015. Is it from recent data?
@Iglooo, yes, that was from his book published in 2014. He was more optimistic in 2002. Those charts, and some others from other people, can be found at http://www.bogleheads.org/wiki/Historical_and_expected_returns#cite_note-3
^Excellent! Thank you.
Does anyone have a link to a good calculator or software for internal rate of return (terminology?). This is for accounts in which there have been periodic additions but are invested in more than investment. I can do simple math and get gross return, obviously, but would like to compare with annual rates for other accounts.
I know Quicken has this feature, but I’m tech challenged and haven’t upgraded the software for close to a decade because I hate learning new clicks. How is the latest Quicken? Is there a better alternative?
Thanks.