Santa Claus rally -when will this end?

[RetireJapan]

Well, stock market is still going up (weak yen also contributing I guess).

I have a (fairly conservative) future planning spreadsheet. Based on our December numbers it works out where we are likely to be a year later.

We already reached the Dec 2022 goals

It's getting to the point that I am considering cashing out, not to time the market but just to lock in 5 years of spending in cash or something. The endless bull market is definitely making me nervous now.

How's everyone else feeling?

[goodandbadjapan]

It's nuts. Last year, we hit our low FIRE number and I thought it would take till at least the end of next year to hit our more comfortable FIRE number. We passed that a few months ago and it is really just gravy and security padding now (until the crash). We could go for a fat FIRE but the way the world is now we barely spend any money anyway! We are probably going to cut back our classes considerably in April.

[runmanTX]

It's nuts. Last year, we hit our low FIRE number and I thought it would take till at least the end of next year to hit our more comfortable FIRE number. We passed that a few months ago and it is really just gravy and security padding now (until the crash). We could go for a fat FIRE but the way the world is now we barely spend any money anyway! We are probably going to cut back our classes considerably in April.

Well, CONGRATULATIONS are in order. Great job to hear about you obtaining your FIRE target. If I may be so bold to ask, how old are you? I'm looking at another 12 years or so before retirement unless something BIG comes along. I love to hear that someone is hitting their retirement. It is very encouraging, indeed.

[goodandbadjapan]

Well, CONGRATULATIONS are in order. Great job to hear about you obtaining your FIRE target. If I may be so bold to ask, how old are you? I'm looking at another 12 years or so before retirement unless something BIG comes along. I love to hear that someone is hitting their retirement. It is very encouraging, indeed.

Thank you! I'm 51. But I'm not retiring just yet - just going to try and cut back a bit more. I still have a wee bit of fear about suddenly losing everything in a major crash, but basically the stress of money has gone and that feels good.

[mighty58]

No sudden moves for me. My projected retirement date is still a ways away (7-10 years), so there are no liquidity needs and there is plenty of time for recovery even if the market were to tank for a while.

Also, I've already experienced being burned trying to time the market. Several years ago, I looked at market indicators (CAPE ratio, etc) that pointed to an overheated market, and thought a correction was inevitable, and I took action, which ended up costing me a lot. My reading of the indicators wasn't necessarily illogical at that time, but subsequent market performance bucked the logic. That experience made me better appreciate that I can't call the top, I can't predict when the market will correct, nor by how much, nor for how long. Better to just stay the course and reduce the risk of making a mistake.

[captainspoke]

Low fire, high fire, roaring fire, boring fire. When it burns down, just a low, old flame:

https://www.youtube.com/watch?v=1Kbydxycvpg

[beanhead]

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.

[EmaxisSlim Cultist]

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.

+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.

[captainspoke]

Depends on time frame. If it's "10yrs+ money" then stay invested.

https://www.fool.com/investing/2020/11/ ... you-money/

And another article I was reading this morning or last night:

But while such outsized stock-market gains have been fairly rare in the past 70 years, past performance shows that 2022 still could be a robust year for returns, according to a review of historical S&P 500 performance by Truist Advisory Services.

Indeed, Keith Lerner, co-chief investment officer at Truist, found the S&P 500 has produced at least 25% annual returns (including dividends), only 18 times since 1950. But in the following year, the broad-based index rose 82% of the time, notching average annual gains of 14% (see chart).
...
“Two of the three years where stocks failed to rise, 1981 and 1990, coincided with recessions,” Lerner wrote, in a Friday client note. “Our work suggests near-term recession risk remains low.”

“The other downside market outlier was 1962, which was challenged by a flash crash and deteriorating investor confidence,” Lerner wrote.

https://www.marketwatch.com/story/what- ... eid=yhoof2

Of course, there are always articles saying one thing or another.

[TokyoWart]

It really has been an amazing run for equities. I have been bewildered by stock valuations for many years now but I am not selling. I am putting new funds into the asset classes (non-US equities, real estate) that I am under-weight in. 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.