Investors Betting on Market Melt Up

[srblanco7]

WSJ Article

Investors are moving large sums into US stocks. US equity funds drew in $56B for the week ended Wednesday - the second largest weekly haul since 2008. These funds have drawn inflows for seven consecutive months the longest streak since 2021.

General sentiment driving the inflows seems to be for lower taxes and fewer regulations.

I read that article and with an admittedly contrarian mindset started thinking it might be a good time to take some profits

[disneysteve]

I read that article and with an admittedly contrarian mindset started thinking it might be a good time to take some profits

Warren Buffett once said that it's wise for investors “to be fearful when others are greedy and to be greedy only when others are fearful.”

The economy has been incredibly good the past couple of years, like historically abnormally good. I do not believe that will last in 2025 for reasons we've already discussed here.

I started trimming back on stocks and plan to sell more after January 1 (but before January 20). The only reason I'm not dumping more now is to spread out the tax hit over two years. And I may still sell off more stock holdings in retirement accounts before the end of the year. That way there is no tax impact.

[ua_guy]

I think the market will ride for a little while. The economy is in an arguably great place for any incoming administration and that momentum will take some effort to undo.

I don't know what to do when things start to get thick, though. If food prices shoot up because of tariffs or labor disputes,, or if we're in a trade spat with China or Mexico, everything will really start to suffer. I'm far enough away from retirement that it might be wise just to ride it out with my current allocations. I'm literally almost all stocks with an "aggressive growth" profile. The downside of that, when it turns bad, is aggressive loss. The upside of that, again, is aggressive growth. Trying to time a market is always tricky.

Current retirees are in a much more precarious position and have to be defensive and really try to stay ahead of this stuff.

[disneysteve]

ua_guy I agree that the momentum will take some time to fade so we might be fine well into 2025. I hope so. I also agree that your age and situation matters a lot. Im
retired. We’re living on our portfolio. I don’t want to see it drop 30 or 40%. We have enough to sustain us even if we tilt more conservative in our AA so why take the risk if we don’t need to?

[kork13]

Well, I'm planning to take advantage of the recent run-up .... I've had a long term position that I've been waiting (holding out) for it to hit my exit point, and we're finally within striking distance of it (currently 2% below my mark). In fact, it actually crossed the line last week, but I wasn't prepared with a limit order to sell everything, so I just put that in today. I hope/expect it'll execute at some point within the next couple weeks, and will net me a cool $2k / 90% profit since I first bought it in the early COVID days. Of course, I'll offset the gain with some TLH, so kinda net zero...

Otherwise, I'm mostly in a wait & see mode. We're definitely also pretty aggressive with our AA (90/10) .... So a big selloff could sting. But we're not even 40 yet, so I'm not too concerned. I've also been slowly building up dry powder for the last couple years, which has actually accumulated up to almost $30k. I'm fine with it sitting there as part of our cash backstop... But if there is some sort of sudden or extended drop, I'll have that available to play with.

[bjl584]

As it's been preached for decades on here and elsewhere, I don't try to time the market.
I've never really invested the bulk of my portfolio with regard to who is in Washington or what the broader economy is doing.
I may dabble a small percentage in something based on the news of the day, but it has never been enough to move the needle.

[ua_guy]

Makes me wonder what's going to happen with the US Dollar, and if it's going to be replaced with Dogecoin.

[disneysteve]

Makes me wonder what's going to happen with the US Dollar, and if it's going to be replaced with Dogecoin.

Not a chance. If the US dollar ever loses its world status we will all have far bigger things to worry about.

[LivingAlmostLarge]

I don't know really if I should bother moving the needle for us. I'm more a ride it out and don't touch anything. Much like kork we're 95%/5%. But the bulk are in VOO and QQQ. I'm boring and been holding a lot of stuff for years. So there are a lot of capital gains to unwind our positions. I personally had no plans for unwinding until we officially retire.

Most because the way I am thinking of it is that as we get closer to retirement I'll be saving cash/bond positions for SORR and that will cause my portfolio to tilt to maybe like 70/30 at that time. But until then I'm just riding it out. Mostly because we don't have a firm target date for retirement. Tentatively 2030 mostly because the kids are out of the house.

Any later than that and we are working because we want. I know we'll be done by then. I feel like we're on coast fire now and just padding the numbers.

[Tabs]

I am already over-weight on stocks back when the market took a sudden and abrupt dip earlier this year, and I got to buy more on sale. So, by doing absolutely nothing now, I am already enjoying the recent pop, and I certainly won't lose sleep if it decides to stay up there.

As for taking some off the table? For the moment, I have decided not to sell anything. Short of my annual re-balancing and Roth IRA contributions, my portfolio no longer needs to be moved around much anymore.

[srblanco7]

I don't know really if I should bother moving the needle for us. I'm more a ride it out and don't touch anything. Much like kork we're 95%/5%. But the bulk are in VOO and QQQ. I'm boring and been holding a lot of stuff for years. So there are a lot of capital gains to unwind our positions. I personally had no plans for unwinding until we officially retire.

Most because the way I am thinking of it is that as we get closer to retirement I'll be saving cash/bond positions for SORR and that will cause my portfolio to tilt to maybe like 70/30 at that time. But until then I'm just riding it out. Mostly because we don't have a firm target date for retirement. Tentatively 2030 mostly because the kids are out of the house.

Any later than that and we are working because we want. I know we'll be done by then. I feel like we're on coast fire now and just padding the numbers.

We're a few years closer than you to retirement, but executing a similar plan. We've moved over the past couple years to roughly a 70/30 portfolio with the 30% in bonds/cash representing approximately 10 years of expenses.

Still have some work to do to restructure our brokerage account which is weighted more heavily to equities and has a balanced fund that I'd like to get out of - but will have to deal with LTCG and that'll likely have to wait until we're retired.