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You don't hope. You invest continuously throughout your working life and smooth out some, but not all, of those bumps. More importantly, though, you hope you
by dgacmu 10y ago
You don't hope. You invest continuously throughout your working life and smooth out some, but not all, of those bumps. More importantly, though, you hope you retire at the right times (large market losses early in retirement are dangerous). But you work around that by building in flexibility into your retirement draw - in a bad year, you cut back and spend a bit less.
- friedman23 10y ago> More importantly, though, you hope you retire at the right times Hope has nothing to do with it, 10 or 15 years before you plan to retire you start liquidating equities and going into bonds and treasuries. If the market is at a low point you hold off on equities until the market rises again.
- paganel 10y agoHow do you know that "the market is at a low point"?. And more importantly, how do you know that the "market will rise again" ?
- zeroer 10y agoI think he means you determine if "the market is at a low point" by comparing to the recent past. For instance, today, I can tell the market is at a high point. It might be a good time to rebalance from stocks to bonds today if that's something I'm looking to do. That the market will rise again has held in the past in the U.S., so it's not so unreasonable to suspect it will in the future.
- friedman23 10y agoIf the stock market crashes and never recovers we are all fucked. Buy guns and bullets in that case.
- dgacmu 10y agoIf you go much under 50% equities, you substantially reduce the percentage of your wealth you can draw on for living expenses. For more: https://pressroom.vanguard.com/nonindexed/2013.10.23_A_more_dynamic_approach_to_spending.pdf https://pressroom.vanguard.com/nonindexed/2013.10.23_A_more_...