What’s the consensus on asset allocation ( percentages) taking into account ones age, years to retirement, risk tolerance, market outlook etc…
My FA keeps’s me in a conservative portfolio 65/20 and 15 percent cash ( my choosing)—-
Annual reviews have always illustrated a hypothetical 4-6% annual roi, but my thinking ( considering age/assets etc) wants me to pull everything out of the market, considering I am up, let’s say 40% in two years) — That would be appx 8 years of projections
Albeit inflation/tax consequences , is my thinking flawed?
My portfolio is up about 50% in past 2 years and I have about 15 % cash and 10% bonds. Most of my stuff is in index funds and ETF's and my superior 2 year gain is mostly due to spectacular gains in 2 chip stocks I own (not the big boys such as , INTEL et al similar )
I'm am 74 and I keep 1 year cash and laddered investment grade bond ETF's to meet the next 5 years of RMDs from my 401K/IRA. These accounts are about 40% of my net investment worth. My thinking right now is to lighten up
a lot from stocks/index funds only in my 401K/IRA/Roth where there will not be tax consequences and let the stocks/indexes in my taxable accounts ride (incredibly I have no losses in my taxable accounts to offset gains - if I did I would definitely harvest my losses to offset gains.
I do not think it is wise to put money into bonds right now.
Some things that I don't know if guys coming of medicare age (and then thereafter) realize is that there are consequences to realizing taxable gains besides the obvious tax aspect — the medicare premiums increase dramatically based of your income which would include the gains.
I am very concerned about the roaring market of the past 5 years: “If something cannot go on forever, it will stop,” Herbert Stein, a leading conservative economist who helped make policy in the early 1970s
I do not have a FA.
Any comments/ advice?
Ps. I lived thru the inflation rates of 70's and 80's and I don't know if younger guys have any idea of what it was like. It can happen again.