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WhatRUsernamesUsed4 t1_jad6mc9 wrote

Reply to comment by FD_4LYFE69 in My Roth IRA is 100% invested into VTSAX. Is it an issue to keep investing in VTSAX each year? by dennisj9

Retirement age people 100% in VTSAX would've lost 19.53% last year. That's... not ideal with the amount of capital they should have saved by that point. They may no longer be in a position to just 'wait it out'. Holding the position at that age without guaranteed income is pretty risky.

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FD_4LYFE69 t1_jad7ft1 wrote

A lot of people live until 90. They can do 3-4% withdrawal in full stocks and not touch the principle. Bonds is an old theory and one that I just disagree with.

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WhatRUsernamesUsed4 t1_jada8sh wrote

How do you 'not touch the principle' when the investment falls almost 20%? There are no gains to sell off. There's nothing but a fraction of the principle you had a year ago.

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FD_4LYFE69 t1_jadamvb wrote

I’m assuming this is someone who has been investing for many years. Not someone who is 64 and just started investing

Someone whose been investing since 1990 (or many many years) need not go into bonds in my opinion. The 20% pull back doesn’t affect them.

I’m in my early 30’s and I’m heavily investing - by the time I’m at retirement age I plan on doing full stocks for the 11.5% or so average return. My family has longevity so I’m assuming I’ll live into my 90s especially with advances in healthcare in the next 30 years.

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WhatRUsernamesUsed4 t1_jadd7yw wrote

  1. The average return of VTSAX since it's inception is 7.15%, idk where you got 11.5 from.

  2. I'm about the same age and you are assuming we will be lucky enough to match the greatest bull runs of human history. It's far more likely our parents just had better investment opportunities than we will ever have access to.

  3. The needs of a 64 yo who started investing a while ago and a 64 yo who started investing last year will still be the same. A 20% hit would affect both the exact same. Monetary needs are forward moving.

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2wheeloffroad t1_jadu3ms wrote

The second chart on this page is interesting

https://www.longtermtrends.net/stocks-vs-bonds/

Shows how crazy the market is compared to so an early 40 year window - so ya, good chance we won't repeat this as much if it was due to deficit spending. It also shows how much worse bonds have performed.

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FD_4LYFE69 t1_jado23x wrote

Sorry bro your post makes zero sense. I wish you luck in your wealth building FYI VTSAX closely mirrors s&p 500 which has a non inflation adjusted return of 11.58%. Lets touch base in 30 years and see who has more money :)

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2wheeloffroad t1_jadt4jv wrote

I think the idea is that the returns are so much better and for people who have enough, the well is deep enough to survive the down turns and on the long run, come out on top. Seems like it all depends on the ratios of expenses, wealth, and timing.

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joshcandoit4 t1_jadjzbs wrote

Those same people would be up 44% over the last 5 years still

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TugboatCrypto t1_jadbpq4 wrote

depends on how reliant you are on the dividends, if its the only source of income then probably not ideal for the reasons you mentioned. If you're well diversified (outside of securities) and have a12 month emergency fund, then I don't see an issue with being 100% in a broad index fund, but to that end- it applies to such a small amount of people that those in the position to hear it, probably don't need it.

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pickymeek t1_jae92fj wrote

I'm not sure. (PDF warning)

Under "Why not 100% stocks?"

> In short, although a strategy that fully invests a retirement portfolio in stocks can be perceived as riskier than most alternatives, is that really the case? Is a strategy that has the lowest probability of failure, provides the same or better downside protection, and higher upside potential really riskier than other strategies simply because a retiree is more uncertain about (how much higher will be) his bequest? If not, then having a retirement portfolio fully invested in stocks is a strategy that should be seriously considered by retirees.

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