Personal Investments • Re: Was too conservative at 50/50. How to transition back to 80/20?

Also, any thoughts on return to mean? Does that justify holding on to my 50/50 allocation and waiting for a swoop?

I don't think about return to the mean at all. It has nothing to do with how I invest. It certainly does not mean to wait for a dip.

I'm maxing out two retirement accounts (403b and 457b), plus employer's 401a contribution, so not too worried about the saving rate. Because of my secure job, I have a growing feeling of missing out on opportunities.

Your job security and ability to save a lot also means you have no need to take risk. What's the point of taking risk you don't need to achieve your goal, especially if you are not comfortable doing it?

Again, I suggest moving toward more stocks 5% at a time. Chances are you will know when you are about to leave your comfort zone and you can stop at that point. There is no need for you to get to 80:20. You can still have plenty of money at a much lower AA.

Thank you. I've set a target for 50% US equity, 25% international equity, and 25% bonds and will execute it over two years. My new contributions are now coming this way. I moved 5% of the existing funds yesterday and slept well. Actually, I forgot about it right away.

> Your job security and ability to save a lot also means you have no need to take risk. What's the point of taking risk you don't need to achieve your goal, especially if you are not comfortable doing it?

Having a very stable job means one can afford to take more risks, which will allow one to reach the retirement target earlier. And means having financial freedom earlier for possibly a different life experience (e.g., switching to a different job that pays less, leaving work, moving to a different country, ...)

I actually love the 50 us stocks, 25 international, and 25 bonds. That was my allocation in my late 20s. Now in my mind 30's, I am 100% stocks split 50/50 between us and international.

I've been super into personal finance and investing since I was 22. I've saved a lot and am definitely ahead of my peers. Want to hear something crazy? I would have quite a bit more if I had just saved in an appropriate target date retirement fund.

Do you have them available to you at a good price? If so, I think you should give them serious consideration. No allocation is perfect or even "right". But the target date gives you a reasonable one. It will rebalance for you as the markets go up and down. The only thing you have to worry about is stuffing more money in.

Am I taking my own advice?

Not a chance!

Good luck!

Statistics: Posted by slow n steady — Thu Jul 11, 2024 11:14 pm

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