AI bubble – why not accelerate reallocation to bonds early?

[Anonymous]

Anonymous wrote:I got laughed at by some idiot on here who is obsessed with Tesla stock when I brought up the looming crash a few months ago. I am moving to G fund soon. I think we have more gains in the short term. Why? Because we have no yet unleashed QE and additional rate cuts to try and tame the terrible impacts from job losses and tariffs. When the money printer goes brrrrr the stock market will inevitably rise for a bit. That’ll also help my gold ETFs in my taxable account. But yeah in TSP I am really close to just throwing it in G so as not to lock in losses that are coming soon.

Ha yeah super excited to see how the Republicans who were supposedly so worried about inflation a year ago try to explain why they love a loosening monetary policy.

Who am I kidding, they don't need to try and explain it, they don't care.

[Anonymous]

Good luck to all market timers on this thread!

[Anonymous]

Anonymous wrote:Umm, you're at 90/10 with three years till retirement?

AI bubble or not, rebalance immediately.

This was my first thought! I know you say you and your spouse would like to keep working, OP, but you may not have the luxury of choosing your retirement date. You might be replaced by AI in 2 years.

You might not need to put 40% in safe investments, but you need to save enough to ride out any crashes, so calculate however much that would be for you. Also, don't put the whole 40% into bonds for all the reasons PPs mentioned. Make sure that is diversified too.

[Anonymous]

Anonymous wrote:Good luck to all market timers on this thread!

Right? Always the same question and always the same answer.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Good luck to all market timers on this thread!

Right? Always the same question and always the same answer.

People always like to quote "time in the market beats timing the market," but the whole point of changing allocations close to retirement is that you don't have much time left in the market!

[Anonymous]

Please rebalance your funds immediately to a much more conservative portfolio. The market has started a correction already. Who knows how deep. It may be quick or not.

[Anonymous]

Remember your sizeable pension (and eventually social security) function as stable bond holdings. You likely don't want to have a conservative portfolio with this backstop.

[Anonymous]

Anonymous wrote:Umm, you're at 90/10 with three years till retirement?

AI bubble or not, rebalance immediately.

To what? You need a stock heavy portfolio for growth.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Umm, you're at 90/10 with three years till retirement?

AI bubble or not, rebalance immediately.

To what? You need a stock heavy portfolio for growth.

OP appears to have won the game and is close to retirement, heavy growth shouldn't be a goal at this point. 60/40 wouldn't be unreasonable, but it's up to individual risk tolerance.

[Anonymous]

Anonymous wrote:Umm, you're at 90/10 with three years till retirement?

AI bubble or not, rebalance immediately.

this x100

[Anonymous]

Anonymous wrote:A growing consensus appears to be that the stock market is in an AI bubble and will eventually have a correction, but who knows when or how much.

Partly thanks to this bubble, we recently surpassed our goal for retirement savings ($3M) well before we expected to.

I’ve been a set it and forget investor since my 20s, but am now a GS15 fed with 3 years left before retirement eligibility. I do enjoy my work and would be OK working past that date, such as an additional 5 years to get to age 62. My spouse is in the private sector, makes close to what I do and has no interest in retiring anytime soon.

I keep wondering if we should declare victory and accelerate the reallocation of my current TSP portfolio from 90% stocks/10% bonds to 60%/40%. I understand we could be forgoing sizable future upside gains, but am tempted by the chance to lock in our current gains and minimize our future downside.

Am I crazy to be entertaining this?

If there really were a growing consensus the "bubble" would already be over.

[Anonymous]

Maybe? My kids' 529 blew up and surpassed my goals, and since they are less than 5 years away from college, I moved from 100% equities to a very conservative allocation. Once you've won the game, why continue playing? But retirement is much longer than college, and many will argue that moving to bonds is riskier than staying in equities because you'll miss out on market gains that you'll need to keep up with inflation and sustain your withdrawal rate.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Good luck to all market timers on this thread!

Right? Always the same question and always the same answer.

People always like to quote "time in the market beats timing the market," but the whole point of changing allocations close to retirement is that you don't have much time left in the market!

And if you are 3 years from retirement, you've already had "time in the market"! I think that saying applies best to 20 and 30-year-olds. The money you save in your 20s is worth a lot more than the money you save in your 50s, for example.

[Anonymous]

There is a big difference between bond funds and building an individual bond ladder. I recommend that you educate yourself about the difference before moving forward.

[Anonymous]

Anonymous wrote:Umm, you're at 90/10 with three years till retirement?

AI bubble or not, rebalance immediately.

What is your pension? A lot of feds keep TSP aggressive because they have pensions.