Recently reduced our equity exposure by ~6-7% and placed those funds into MM and bond funds. Probably within 5 years of beginning portfolio withdrawals and trying to find a personal comfort zone with volatility as we are in a good position for retirement at this time.
Most of you can probably take this as a contrarian signal and load up on equities!! :)

@dtconroe...your question reminds me of a convo I had with my comptroller several years ago...he asked me "what are you going to do when your CDs roll off and the interest rates are lower". I answered I'll make a decision then with the facts and my interpretation of them as I see fit.
You've done well the past year without the ups/downs that the folks in the market have, likely a little better than SPY without the drawdown, not too shabby.
It all depends though...most dangerous times in the market are when overvalued, lot of debt floating around everywhere, and investing in the market is very risky several years right before/after you retire, especially if you do not have a govt pension.
FWIW, I've been 90%+ in laddered Tbills/CDs the past year(s), no regrets, so what if NVDA had a moonshot return the past several weeks, I tip my hat to the folks who invested there, I still earned several years of my annual spend/expenses with the interest from the Tbills....I still dabble with some funds (PVCMX, MRFOX & BLNDX lately) to satisfy my itch to "do something".
Me, what I am doing, going to buy 6 month, 1 yr and 2 yr Tbills/Notes when they auction over the next couple weeks. I'll step into the market with more "real" monies if we see a -15, -20%+ schmeissing over the next several months.
Good Health and Good Luck to you, no matter what you decide to do,
Baseball Fan

@dt, @larryB, et al.: I'm in Treasury bills and not CDs, but the decision-making structure is about the same. For now I've passed on the fairly tempting 2y T and haven't replaced bills with bills, but instead have been stuffing maturing T's into a 4.94% money market and building a still-small bond etf sub-portfolio. Port yield is a shade over 5%, with most of that coming from hold-to-maturity T bills.
I'm encouraged so far by how well the bond etf sub-port is holding up.

Yeah, small-cap funds tend to be more volatile.
VTMSX is my only dedicated small-cap fund.
I ran Portfolio X-Ray for the period ending June 30 earlier today.
VTMSX constitutes 7.7% of my portfolio.

Old Ted mentioned that he'd not worry about the performance of a holding that constituted less than 5% of his stuff. I'd not give a small-cap fund any more than such minimal room along with my other stuff.
But I wish you well with it. I hope you don't need Vanguard's customer "service."

Thanks!
I've owned VTMSX for ~10.75 years.
The fund's longer-term performance has been good when compared to
the small-blend category (10 Yr. - top 8%; 15 Yr. - top 11%).
VTMSX returns have lagged S&P 500 returns during these periods since large caps were in favor.
I don't need to contact Vanguard customer service often but it's definitely not something I look forward to!

Keeping up with DepositAccount.com for going rates and timetables for CDs. Trying to keep parent's cds to 1 year to 2 year timetables with rates between 4%-5% at our credit unions. Will evaluate the CD market as the CDs' approach maturity.

@dt. I have been been overweight CD’s since early 22 as well. I have become very comfortable with a risk free 5% and find that it suits me well. I am torn between going out as far as I can and still be real close to 5% or slowly returning to a more diverse mixture of dividend stocks and income producers that might do well when the pivot arrives. It’s on my mind but meanwhile life is good at 5%.

Thanks larryb, your comments are very similar to what I am now evaluating. I am not committed to CDs for a long period of time, and am now questioning how much longer I actually want to continue investing in CDs, compared to other types of investments. I was quite content with bond oef investing, until the FEDs started raising rates, which was very negative for my bond oef portfolio. I chose to use CDs as a transitional choice, so I could re-evaluate, what I wanted to do with my retirement portfolio. I do not like the illiquid aspect of brokerage CDs, because selling them before they mature, is very costly. Now I am facing shorter term CDs maturing, and I am uncertain if I really want to lock in more longer term CDs for the future. I am content with 5% CDs, and there are still an ample supply for me to choose from 6 months to 2 years, but some categories of bond oefs are starting to look attractive again. Hence, I am now evaluating whether I want to continue a "laddering" approacch to renewing CDs, or whether I want to start developing a more diversified portfolio that reduces my CD holdings. I have not made a final decision, but continuing portfolio of longer term CD holdings was not part of plans in 2022.
I thought that possibly a few other posters might be experiencing the same investing decision, but was not sure. If so, I was interested in what others thought was attractive/acceptable to renew CDs, vs replacing them with other investing options. Hence my question in my initial post on the thread:
"For those continuing to have a desire to invest in CDs, I would be curious as to what you consider as attractive rates to maintain your investing interest."

Yeah, small-cap funds tend to be more volatile.
VTMSX is my only dedicated small-cap fund.
I ran Portfolio X-Ray for the period ending June 30 earlier today.
VTMSX constitutes 7.7% of my portfolio.

Old Ted mentioned that he'd not worry about the performance of a holding that constituted less than 5% of his stuff. I'd not give a small-cap fund any more than such minimal room along with my other stuff.
But I wish you well with it. I hope you don't need Vanguard's customer "service."

I can't stand the small-cap funds' volatility anymore. I do own a "small/value" single stock in my BHB. Ordering-up more shares tomorrow (3rd) or 5th of July.

BTW, applying a similar roll yield calculation for Treasuries doesn't yield a clear cut answer.
As of 6/30/23 EOD:
1-yr 5.40%
2-yr 4.87%
3-yr 4.49%
Breakeven yield 4.035%
So, if 2-yr 1 yr from now will be > 4.035% (it is 4.87% now), then buy 1-yr now and roll into 2-yr on maturity (likely). Else, buy 3-yr now (less likely). Or, it could be just a toss-up.
The picture may become more clear as the Fed raises rate twice (?).

@dt. I have been been overweight CD’s since early 22 as well. I have become very comfortable with a risk free 5% and find that it suits me well. I am torn between going out as far as I can and still be real close to 5% or slowly returning to a more diverse mixture of dividend stocks and income producers that might do well when the pivot arrives. It’s on my mind but meanwhile life is good at 5%.

From somebody who follows CD rates very closely and has a sizeable CD ladder:
Correction to what you stated in the OP:
2- and 3-yr CD rates have recently been inching UP, NOT DOWN.
I've replied to you a few times over the years about this topic and once in the past few months. You don't seem to appreciate my input on this topic, but I'll try it one more time, especially for those who might.
It's all pretty simple if you paint by numbers, so to speak. Translation, create a very basic EXCEL spreadsheet and drop in the variable numbers.
Here are the BEST current CD rates for Fido, non-callable CDs.
1-yr: 5.25%
2-yr: 4.95%
3-yr: 4.80%
Example:
You want to invest in non-callable, interest bearing instruments for 3 years.
You BUY a $10,000, 1-yr, non-callable CD at 5.25%
At maturity in ONE year in July 2024, you earned $525.
You could have instead BOUGHT a 3-yr, non-callable CD at 4.80%
At maturity in THREE years in July 2026, you would have earned ($480 x 3 or) $1,440.
In order to break even with the currently available 3-yr CD rate, at maturity of the 1-yr CD in July 2024, you will need to BUY a 2-yr CD paying 4.58%.
($525+$458+$458 = $1,441)
(NOTE: You could also BUY a 1-yr in July 2024, and another 1-yr in July 2025, but I'll leave that scenario and math up to you.)
So, in this example,
(1) If you THINK a 2-yr, non-callable 4.58% or greater CD will be available in July 2024, BUY the 1-yr now.
(2) If you DON'T THINK a 2-yr, non-callable 4.58% or greater CD will be available in July 2024, BUY the 3-yr now.
For my money, the decision is easy. BUY the 3-yr NOW as IMO it is unlikely a 2-yr, 4.58% non-callable CD will be available in July 2024. And even if it is, IMO it won't be sufficiently greater than 4.58% to cause me to let the current 3-yr rate of 4.80% get away from me.
Disclaimer: This ain't idle chat. It's what I'm actually doing, and have been doing, for the past six months.

I stumbled across an informative article today discussing Markowitz's contributions to investment theory.
"Markowitz agreed with Williams’s approach to valuing individual investments. It was far better than the old prudent man approach. But Markowitz still saw it as incomplete. The shortcoming: While it’s important to evaluate individual investments, it’s equally important—if not more so—to consider how a collection of investments will work together in a portfolio. Markowitz was the first, in other words, to show investors how to effectively diversify a portfolio."
"In his 1959 book, Portfolio Selection, adapted from his thesis, Markowitz provided this example: 'A portfolio with sixty different railway securities, for example, would not be as well diversified as the same size portfolio with some railroad, some public utility, mining, various sorts of manufacturing, etc. The reason is that it is generally more likely for firms within the same industry to do poorly at the same time than for firms in dissimilar industries.'”

"As noted above, today this might seem obvious. But before Markowitz, it had never occurred to anyone. And it wasn’t just a casual observation. Portfolio Selection runs more than 300 pages and is dense with formulas. In it, Markowitz provided a framework for building optimal portfolios—those that offered either the maximum possible return for a given level of risk, or the least possible risk for a given level of return. Markowitz called these portfolios 'efficient,' and presented them visually in a diagram he called the efficient frontier."
Link

I have invested heavily in CDs since March of 2022. Many of those CDs are now maturing, and I have decisions to make about investing in new CDs. Rates seem to be flattening recently, and rates for CDs longer than 2 years seem to be dropping. The best rates are shorter term, 3 months to 1 year, paying a little over 5%. CDs from 18 months to 2 year are around 5%, and anything longer is less than 5%. When I look at the future, there does not seem to be a strong appetite for any major rate increases, with most projections thinking we may get 2 more .25% rate increases in the second half of 2023. I am now thinking about going out to about 18 months to 2 years for a CD paying 5% or more, but continuing to renew CDs for 6 months to a year, when they are at 5.25% or more. I currently am hesitant to invest in longer term CDs that are paying below 5%.
For those continuing to have a desire to invest in CDs, I would be curious as to what you consider as attractive rates to maintain your investing interest.

The minimum to open FZDXX in an IRA is $10K, otherwise it is $100K. See summary prospectus (this info isn't on the fund's web page).
The minimum amount Fidelity expects you to keep in FZDXX is $10K, even for a taxable account. I've been told that Fidelity is lenient in enforcing this policy. They give you 30 days notice in any case. From the statutory prospectus:

If your fund balance falls below $10,000 worth of shares for any reason and you do not increase your balance, Fidelity may sell all of your shares and send the proceeds to you after providing you with at least 30 days' notice to reestablish the minimum balance.

If you have multiple MMFs in a Fidelity account, it isn't clear which fund Fidelity will tap next once your core fund is depleted.

podcast...also stated 90%+ of those under 45 years old who have a 401k account, auto invest into index funds... can that be true?? If so, that could drive markets higher,
@Baseball_Fan -
d
That sounds a lot like a theory I’ve heard on other forum(s) to explain why equities have risen this year. Can’t blame folks who missed the 6+ month rally to try and rationalize how they got left behind. And the theory (that passive inflows are driving the market) might in the end prove correct. Darned if I know. But let’s look at that statement you cite ….
Re: ”90%+ of those under 45 years old who have a 401k account, auto invest into index funds…”
That could well be true if it means a portion of their automatic investment goes into index funds. That relates to target date funds being the default option where they work plus the fact that nearly all target date funds do invest a portion of their assets in the S&P. It does not mean that 90%+ of those under 45 invest exclusively in the S&P. I and a number of others have cited figures as to the % those target date funds allocate to large cap U.S. stocks. Nowhere near 90%.
There’s another flaw in the quote you cite. Even were it accurate (as you interpret it), it still would not mean that 90% of all 401K contributions go into index funds. That would depend on who that 90% were and how much they were able to contribute.
-
PS: Not my role to assess market valuations or recommend what people should own. I will submit however, that if a bubble existed the S&P, NASDAQ, or other major major U.S. index, opportunities could still exist in smaller or mid cap equities as well in some foreign markets. And, an index is not a market. It merely seeks to replicate one.

podcast...also stated 90%+ of those under 45 years old who have a 401k account, auto invest into index funds... can that be true?? If so, that could drive markets higher, no?
As a side note, I thought this was relevant in today's world, Mr Green was asked about Gold, the value of it, his answer Gold = 1/n where n is the confidence in central banks globally...and the topper...."I want something that I can throw at the Zombies when they come after me..."

Despite its faults, I'm so familiar with the layout at M* that I still use it consistently----- though not by itself to make any final decisions about whether to buy or sell anything. So, I've become accustomed to their use of the "weighted harmonic" beast. Surely, they are not the only ones doing it. I see stocks listed in the neighborhood of 13-14, and more richly valued ones at 23 or so. That's "the page I'm on" with it.
And my ENTIRE portfolio, which I maintain at M*, tells me the whole thing holds a P/E of 14.14. And it tells me it's a 25% lower value than the average for the full SP500. THANK you all for answering my question.

Aside from various ways of handling outliers as Yogi described, there are a couple of different ways of calculating the average P/E. One is by taking a simple (weighted) arithmetic average of the P/Es. Another way, IMHO more meaningful, is to take the (weighted) harmonic average of the P/Es.

Effective November 30, 2005, we [Morningstar] will ... use a harmonic weighted average, rather than an arithmetic weighted average. The harmonic method prevents outliers from skewing the result...

https://awgmain.morningstar.com/webhelp/glossary_definitions/mutual_fund/mfglossary_Price_Earnings_Ratio.html
Computing the harmonic weighted average is equivalent to adding up all the earnings of each holding weighted by the size of the holding (E), then dividing it into the total value of the portfolio (P) to get P/E.
For example, suppose a fund holds shares of two companies: $10 of company A with a P/E of 20, and $15 of company B with a P/E of 15. Company A gets weighted 0.4, company B gets weighted 0.6.
The total earnings from the first holding are $10 x earnings/dollar = $10 x1/20 = $0.50
Total earnings from the second holding are: $15 x 1/15 = $1.
Total earnings of portfolio = $1.50
Total value of portfolio = $25
P/E = $25/$1.50 = 16.67
Weighted harmonic average = 1 / (0.4 x 1/20 + 0.6 x 1/15) = 1 / (.02 + .04) = 1/.06 = 16.67
OTOH, weighted simple average = 0.4 x 20 + 0.6 x 15 = 8 + 9 = 17.
Yahoo Finance is clueless. It reports VFIAX's P/E as 0.05, while reporting the P/E of a different share class VOO of the same fund as 22.19.

Hold individual TIPS to maturity to keep up with inflation. Try 5-yr TIPS.
[snip]

I recently purchased individual TIPS for the first time.
Bought a sizable amount (for me) of the 5-year TIPS at the latest auction.
Plan to hold these TIPS (1.832% real yield) to maturity for inflation protection.

That’s a dour viewpoint @Baseball_Fan. A favorite old expression of mine begins, “Well, I don’t know … that may be so ….”
The trouble is that the markets, by and large, have kept moving higher during most of my 75+ year lifetime. Optimists have done much better than pessimists over that time. Sure, there have been setbacks along the way. 2007-09 was miserable. And had you been 100% invested in Japan in the 90s you’d probably be poorer today. (Most of us weren’t 100% invested in Japan.)
There’s just too many unknowns to predict how various markets will perform year to year or decades out. So the target-date (structured / programmed inflows) are a part of the picture. But they’re not the entire story. I’ve always felt that given enough time all paper curriencies depreciate in value. Makes me want to invest in good businesses, real estate, metals, infrastructure - just about anything other than paper.
Allocation to large-cap / S&P stocks should be / would be expected to be higher if investors’ time horizons are longer. Heck, with a 50 year time horizon that type concentration may be desirable. As retirement draws nearer the target date funds I’m familiar with reign in that risk. Checked TRP’s 2025 retirement fund (TRRHX) and find it just a tad over 30% invested in U.S. large cap stocks. Last time I looked at the average 401K / retirement fund balances for U.S. workers, those averages were pathetically low. We are to believe these same savers have propelled U.S. equity markets into the stratosphere?
What drives equity markets over the shorter run - day to day, month to month? In other words, what causes some stocks to move up or down unpredictably? Don’t know. Not strictly fundamentals because they rarely change so rapidly. I’d guess computer driven programmed buying and selling is one actor. Also, hedge fund managers trying to get a leg up on the next one (or a leg down if selling something short). Also reaction to bits and pieces of macro news as they emerge. (This week it may be the FOMC minutes which get published.) The sheer size of some funds like PRWCX (and now its cousin TCAF) may be partially responsible. Even very small (as a % of holdings) buys / sells of their enormous holdings may be large enough to send vibrations through equity markets for weeks on end as, it’s likely they try to stagger these buy / sell orders over time to try and minimize the impact. And what do you think happens when Buffet sells off a holding or adds a new one?