Anyone here concerned with 2018 and how are you positioning/structuring your affluent client's portfolios? My take in short:cash,no passive, reduce equities to <60%,hi qual fixed/munis & downside inve

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Are you trying to time the market?

How long have you been managing money?

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Op what I've been doing is going through my book and at reviews going back over the rtq with people and showing them their current allocation compared to IPC guidance. Most of them are much higher equity right now than IPC so I use those balanced to growth, or growth focus projections to show em their expected results and ask them if they are comfortable with that or do we want to take some profits right now and shift back to slightly more conservative. I've also been doing guided with slightly more cash like 4% instead of 2 and I've been reducing my high yield bond exposure especially taxable high yield.

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EdJ, I can’t give you a breakdown but I can give you generals. We are about 80% equity (etf and stocks) and 20% fixed with never more than 1% cash right now.
I was an actual trader in 08 and what i learned was simple. Put a trailing stop sell on all equity positions and once liquid put a trailing stop buy of 3%. So you can liquidate around the start of a recession and buy on the way back up without missing too much of the upside. But I think we are doing a disservice to predict when a pullback is coming and trying to “beat” it.

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Stay fully invested in stocks until market comes under heavy distribution and goes into correction... then we’ll go 100% cash... distribution counts are low right now aside from Nasdaq which has 5distribtuion days in past month or so...

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^ joking hopefully. Buy high sell low always a good plan.

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@fa2 Buy high sell higher buddy. Best stocks are ones that consistently hit 52 week highs and go higher

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@fa3 ur making it to hard on yourself

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Haha by doing my job?

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Thank you for the ones on input and for the FA asking on my tenure, it's been since end of 2009. We are expected to manage risk and not trying to time the market but when you look at the rally we've had, the massive inflows into passive, the rally in 10yr yields from 15 until now and the same rally in crude, it is something to.be concerned with.
FA3, leaving it to the client by updating the rtq and raising cash from 2 to 4% is not enough. I'm looking for the FAs opinions that have been through the last recession and any other and what you've learned from it. If you havent been through it, unless you have a technical response please refrain from the cookie cutter responses. My clients (it differs due to age):
15% cash
30% combo (hi qual int bonds,hi yld munis,floating,EM debt)
55-65% active equity funds and indiv stocks (intl but pretty selective)

Really general and tough to go in detail but you get the idea.

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By 15 i mean the comparisons from 2015 levels until now, also the yield curve is concerning along with how the dollars. CPI has had a big rally in the last 2 yrs as well...all of those should be slightly alarming but the unexpected will come at the least expected time right

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So the fact that the top FAs in our industry all have decent cash positions and they've reduced their equity exposure for their clients is foolish? And I'm assuming based on your comment that you're 100% invested in the markets? How is that diligent after a 280%+ rally in the sp500?
Again, I'm looking for input from PMs rather than asset gathering salespeople. I'm not asking how to gather asset and how to follow guidelines which we all have at our appropriate firms, I'm asking about how are some of you actually managing portfolios.
Also, FA1, share the allocation breakdown in your practice for tje largest group of clients before commenting...that goes to everyone intending to comment on this thread since otherwise your opinions are not answering or relevant to my question. Let's be straight and to the point.

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Add Bitcoin and definitely more cowbell

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OP, take each situation individually. Talk to your clients about their current risk tolerance in light of the extended bull market. For those who express concern, I've been downshifting from growth to value, and from value to balanced, as appropriate. Growth has significantly outpaced value (or, in EJ parlance, "growth & income") this year, so you may actually get equivalent or even superior performance in the near future with less risk. Have that conversation with your clients; they'll appreciate it.

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Thank you MP1

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Being early is the same as being wrong in asset management. Your client's will still fire you. Make sure you document each client's risk tolerance and goals and adjust their AA to match. Losing money is part of investing. Your client's look to you for emotional support in downturns. If you don't have the fortitude to handle drawdowns, you'll hanger to fake it! Looking for holy grails to avoid corrections is a fool's endeavor

@fa 2 ur job should be to manage and protect wealth... here’s best advice you’ll ever get... Investors.com CANSLIM William Oneil. Ur world will be changed

This is FA1.

I'm a PM, not an salesperson.

I'm globally diversified across multiple asset classes.

My most aggressive portfolio is 20% bonds.

I've been reducing my U.S. Equity exposure over past 2 years. Went from 48% allocation to 34%.

Also, U.S.allocation is heavily weighted to value and quality, not market cap weighting.

The additional 14% that freed up from U.S., went to emerging markets.

1/3 of bonds allocation is in EM closed end funds that I bought at a 18% discount.

Just cause growth stocks are at an all time high, doesn't mean you need to panic in anticipation of a correction.

Buy value. That is how you protect your clients.

If you bail and the SP500 goes up double digits, they will fire you even though THEY told you they're scared of a correction.

My conservative portfolio is 70% bonds, and is mostly closed end funds, that you buy at a discount, and sell at NAV.

And this is why I maintained 10-15% cash for some clients. We were still able to have plenty of equity exposure to take advantage of the rally in the last 3 months and bonds were carrying more risk than reward, which is why I didn't invest their" Fixed income" allocation in all bonds but instead in cash so thatbwe can buy during this hectic time.

Not tting the msrket, but just not being greedy. Clients appreciate thi and glad indont have to guess what a fund will settle for at the days end to reallocate to equities.

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