Santa Claus rally -when will this end?

[RetireJapan]

I am seeing a lot of early retirements recently by friends who suddenly discover that the returns their investments dwarf what they make by working.

Yeah, our net worth increase from Dec 1 to Dec 31 last year was more than my gross annual salary. Doesn't seem real though

[RetireJapan]

I guess true Bogleheads would say that if you are nervous your asset allocation should be fine-tuned.

If I were you, I would certainly consider selling some equity to replace it with cash or a bond fund.

I think you're right. One option I have considered is to just fund our tax-advantaged accounts and save any other funds in cash going forward, at least until there is a correction or something. That would give us spending money in the future and allow us to ride out any corrections.

Have to give it some more thought.

[adamu]

BNDX paid out their dividend on Dec 30 and I literally spent the new year moment going "ooh, dividend".

I just feel bad for the people in their 20s I tried to persuade to get started last year but didn't get around to it. Such a missed opportunity

[RetireJapan]

+1

You're appetite for risk had changed. Shift some assets to fixed income.

I00% equities near retirement is those with iron stomachs, huge pensions, or no other options.

Very true, except that I'm not sure how close to retirement I really am. While we have my wife's school, we'll have an income, and if we sell it we'll have a large-ish amount of cash coming in.

So I need to think about this a bit more.

But the discussion is extremely helpful. I only have one person I could talk to about this 'in real life', and not with this degree of sophistication. This forum really is a special place.

[goodandbadjapan]

But the discussion is extremely helpful. I only have one person I could talk to about this 'in real life, and not with this degree of sophistication. This forum really is a special place.

This is the same for me. It's not an easy thing to talk about. If most of your friends are 'My retirement plan is to work till I die' types, then any discussion will look like gloating, be uncomfortable and not helpful to you in your planning. I have one friend who is on the same path as me and we talk about it all the time because we can't really talk much with others! This forum is a godsend.I tried discussing investing with a family member here once and was met with the 'It's just gambling' response.

[adamu]

I think, again, now might be a good time for a small buy and forget crypto investment too. Yes, despite the past. If you'd bought Etherium last year, you'd have 10x as much now. That beats any stock. The fundamentals seem insane to me, but if you don't have a few % of crypto assets, I think it's worth a tiny bet. Maybe 1-5%. Even just a few 万. Sorry. Maybe we should club together and release a RetireJapan NFT...

[RetireJapan]

I think, again, now might be a good time for a small buy and forget crypto investment too. Yes, despite the past. If you'd bought Etherium last year, you'd have 10x as much now. That beats any stock. The fundamentals seem insane to me, but if you don't have a few % of crypto assets, I think it's worth a tiny bet. Maybe 1-5%. Even just a few 万. Sorry. Maybe we should club together and release a RetireJapan NFT...

That reminds me of when a guy I knew here in Sendai was trying to persuade me to buy Bitcoin in 2014. A couple of years later he was really happy because he managed to buy a computer and a guitar with his gains. Haven't seen him for a while, he's probably suicidal now

I still have the same three problems with cryptocurrencies:

1. can't see any reason for a given crytocurrency to have any value (I can see why the tech is important, of course)
2. the tax reporting seems like a pain, and gains being taxed as income isn't great
3. we'll be perfectly fine if our portfolio grows 3%+ per year going forward, no need to swing for the fences

[EmaxisSlim Cultist]

I think, again, now might be a good time for a small buy and forget crypto investment too. Yes, despite the past. If you'd bought Etherium last year, you'd have 10x as much now. That beats any stock. The fundamentals seem insane to me, but if you don't have a few % of crypto assets, I think it's worth a tiny bet. Maybe 1-5%. Even just a few 万. Sorry. Maybe we should club together and release a RetireJapan NFT...

That reminds me of when a guy I knew here in Sendai was trying to persuade me to buy Bitcoin in 2014. A couple of years later he was really happy because he managed to buy a computer and a guitar with his gains. Haven't seen him for a while, he's probably suicidal now

I still have the same three problems with cryptocurrencies:

1. can't see any reason for a given crytocurrency to have any value (I can see why the tech is important, of course)
2. the tax reporting seems like a pain, and gains being taxed as income isn't great
3. we'll be perfectly fine if our portfolio grows 3%+ per year going forward, no need to swing for the fences

There is also the environmental factor at play. Which for me is a more serious factor.

1. I do not feel that is as relevant an argument. Let me ask you this if I offered you 1million USD value in bitcoin or Turkish lira what would you take?

2. Not a worry for buying and hold investors, only for traders.

3. That is perfectly reasonable. If that is your goal it would seem prudent to reduce your risk. I can not imagine having a 100% equity portfolio if this was my benchmark though. I would probably be 70/30 stocks and bonds.
https://www.nikkei.com/nkd/fund/?fcode=0331A172

[Tkydon]

Might be time to take some of the wonderful profit off the table, lock in the gains, and wait for a more reasonably priced market to reinvest.

You don't have to get out at the top... You have to get out before the top, so there are still people willing to buy what you want to sell...

It's too late when everyone is selling...

I would point you to 'The Intelligent Investor - Revised Edition' by Benjamin Graham with new commentary by Jason Zweig, and especially the new commentary by Jason Zweig which was written after the Y2K crash, and especially the commentary for Chapter 3.

https://www.amazon.co.jp/Benjamin-Graham/dp/0060555661/

https://goldenaudiobooks.com/intelligent-investor-book/

[RetireJapan]

Let me ask you this if I offered you 1million USD value in bitcoin or Turkish lira what would you take?

Doesn't matter as I would immediately change either to JPY

But I think there is more case to be made for the lira as a natinal currency than for crpyto to have an intrinsic worth. Now if it were conditional on me holding it for a set period of time I might go for crypto (more likely in the short- to medium-term) but that would mainly be a bet, like going all in with a pair of aces at a poker table full of strangers