A portfolio withdrawal setup is not complicated. Many parts are already familiar. The variable percentage withdrawal method automatically adapts.
When stocks are down, rebalancing and tax loss harvesting beat literally doing nothing.
Rebalancing between stocks and fixed income isn’t buy low sell high. Most likely you will sell high buy higher.
After I have the core asset classes covered in my investment portfolio — US stocks, international stocks, and fixed income — if I’m looking for a good asset class for diversification, REIT and Precious Metal Equity (PME) are two good candidates. Real Estate Investment Trust (REIT) Yale endowment Chief Investment Officer David Swensen had REITs […]
The previous two posts Pay a 30-Year Loan On a 15-Year Schedule and Borrow 30-Year and Invest The Difference showed how you can save money if you are committed to making higher monthly payments on your mortgage. This fits into a general theme: pay a lower price if you commit to something and you make […]
Do you remember those days last summer when the Dow went down 400 points one day, then it went up 400 points the next day, before it went down another 400 points the following day? I saved in my notebook this excellent post on the Bogleheads forum by the remarkable poster nisiprius: A time to […]
Wall Street Journal columnist Jason Zweig wrote a puzzling article Why Buying on the Dips Isn’t All It’s Cracked Up to Be. The gist of it is that buying on the dips doesn’t work. I find the article puzzling because it has a weird definition for buying on the dips. It defines a dip as […]
When the stock market moves up or down, it can knock your asset allocation off your target. Rebalancing means selling the winners and buying the losers in order to bring a portfolio back to its target allocation. When it comes to rebalancing a portfolio, the 5%-band method is a popular one. It says that you […]
When stocks are down, don’t sell. But also remember to buy more. “Don’t sell” is correct only if “buy more” is correct.
I was away for only a week, and look at what happened. After I came out of my seclusion, I heard we beat the clock on the debt ceiling but Treasurys got downgraded anyway. I was surprised to see that my limit buy orders were all filled last Thursday and Friday even though I didn’t […]
Almost three years ago, when the stock market entered a bear market, I devised a plan for overbalancing, which called for increasing the percentage of my portfolio invested in stocks as the market goes lower. Stock Market Allocation to Stocks -5% 60% -10% 60% -15% 60% -20% 65% -25% 65% -30% 70% -35% 70% -40% […]
The stock market crash in 2008 provides a good case study for rebalancing. If you are not familiar, rebalancing means selling some assets to buy other assets and putting your asset allocation back to what you originally wanted. Rebalancing is good for maintaining a portfolio because you are buying low and selling high. For 2008, […]