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I'm now about 75% into BRK, with the remainder in ETFs RSP (ew S&P500) and QQQE (ew Nasdaq100). As a value investor, I'd like to know how to track fair market value for these and possibly other equally weighted index funds, but have been unable to come up with a way to do so. I'd very much appreciate any assistance that might be on offer from the illuminati on this board. Also, suggestions are welcome regarding optimization of the ETF holdings, which are intended to be essentially a stabilizing, but not dead weight, ballast.

Thanks in advance.
Tom

Fair value for a broad index is a tricky proposition. It's extremely hard to say what future market multiples might be.

About the best I can manage is to say that IF multiples resemble their average since some date in the past based on a certain metric, then the expected value these days would be X.
And, if the progress of that metric continues at about the same pace, then the forward return might be Y if the ending valuation were to end up historically typical.

In early October I pegged current expected (fair?) value of QQQE at around $73. Say, $70 to $81 depending on your assumptions.
This is based on the observation that average real earnings among that group have trended remarkably well for a very long time, so the ratio of price to *trend* earnings might make a good yardstick for an equally weighted index.
So at $83.50 today it's a bit above average but far from crazy. Especially given that trend average real earnings for the group (and therefore value) have risen so fast: in the vicinity of inflation + 7.5% or 8.0%/year.

I don't have handy numbers for the S&P 500 equally weighted (RSP). I should, but haven't looked into that in along while.

For the "normal" S&P 500 based on trend real earnings, it's 26% more expensive than its average since January 2000.
If historical returns starting at similar valuation multiples observed since 1995 are a guide to future results, and trend net earnings grow apace, then one might expect a real total return of inflation + 2.0% in the next 7 years. Not very exciting.

One can switch metrics. Based on price to sales, the S&P is about 49% more expensive than its average since 2000. That figure is a lot scarier because US corporate profitability has soared in recent years: things look cheaper on net profits than on gross sales because each dollar of sales is generating a lot more profit recently. Almost entirely because total tax expenses and total interest expenses have fallen a lot lately. Those factors may remain at their current happy levels (or may not) but the trend can't be extrapolated. Profits will not continue to grow at the rate they've managed in the last 20 years.

So, my tea leaves suggest the cap-weight S&P is quite a lot more fully valued than QQQE.
I haven't done a good calculation for RSP in ages, but I suspect it would come to a similar but slightly less extreme conclusion as for the usual cap-weight index.
Depending on your investment horizon, one might considering keeping the QQQE but lightening up (or getting very patient) with the RSP.

Again, with that big caveat: on the broad assumption that future valuations resemble their averages in the past quarter century or so.


Since this is the Berkshire board, the likely returns for [the remainder] of 2024 don't look so hot.
Valuations based on the usual things like book and peak-to-date book are somewhat above average, so short term likely returns are commensurably lower.
Based on one metric (peak to date book but continuing to rise slowly during book dips), Berkshire is 8.6% more fully valued than its average since Jan 2008. The average one year real total return since then has been about inflation + 8.2%. So, the two kinda cancel out for a year and the implied one year return after inflation is in the 0-1% range.
That "forecast" will be wrong, but the notion is that it's a toss-up whether that's too high or too low.

Jim

Since this is the Berkshire board, the likely returns for [the remainder] of 2024 don't look so hot.
Valuations based on the usual things like book and peak-to-date book are somewhat above average, so short term likely returns are commensurably lower.
Based on one metric (peak to date book but continuing to rise slowly during book dips), Berkshire is 8.6% more fully valued than its average since Jan 2008. The average one year real total return since then has been about inflation + 8.2%. So, the two kinda cancel out for a year and the implied one year return after inflation is in the 0-1% range.
That "forecast" will be wrong, but the notion is that it's a toss-up whether that's too high or too low.


Just today I started looking at covered calls. The Jan '25 370 call (~$29) has a break-even of about $399, which is +10%. The Jan '25 380 call (~23.50) has a break-even of about $403.50, which is +11.3%

I always find the trade-off between premium and break-even to be torture. Not to mention expiry.

Re: covered calls,
I did something similar and was surprised how quickly the calls were exercised. You can always use the cash to buy back some shares and pocket the premium, but I'd say the $370 stand a decent chance of getting called away. If that's an acceptable result, or you are looking at selling some shares anyway, than the trade can make sense.

You should make sure you're happy with both scenarios:
1) You sell this call, the stock price languishes for 2024, and you don't get to sell the stock at $362+
2) You sell this call, the stock price rises above $400, and your shares are called away. Maybe Berkshire makes a move for a large acquisition this year causing the stock to be elevated for a long time

Thanks for sharing your perspectives, Jim. Based on your comments I'm guessing QQQE may be about 13% overpriced at the moment, and RSP a not very encouraging 42%.

I'm considering substituting a Fundamentally Weighted Index (https://www.investopedia.com/terms/f/fundamentally...) for the RSP portion, perhaps something like QUAL (https://www.etf.com/QUAL). If so, I'd need to settle upon a sensible distribution between QQQE and QUAL? Any thoughts?

Tom

I'm considering substituting a Fundamentally Weighted Index (https://www.investopedia.com/terms/f/fundamentally...) for the RSP portion, perhaps something like QUAL (https://www.etf.com/QUAL). If so, I'd need to settle upon a sensible distribution between QQQE and QUAL? Any thoughts?

I wouldn't go for QUAL, myself.
Like most equity ETFs it is capitalization weighted. A bad thing.

It's only a little bit more typing to do this : )
https://www.shrewdm.com/MB?pid=199887630
It's pretty likely the stocks would be somewhat richly valued, as most tings are these days, so the next drawdown might be almost as bad as with SPY.
But at least you'd have some small reason to believe you might be getting an edge over time. Maybe.

There are lots of other ways to skin the cat.
More QQQE?
Move the stuff that you considered to cash, and write cash-backed puts against QQQE or RSP or whatever, at strikes a little closer to fair value?
My experience with repeated cash-backed put writing is getting a return that tends to be half way between [the return on the underlying security in the same time] and [a constant 10%/year]
Though it works better with individual stocks than with funds.

Jim

Thanks again, Jim. I recall well the 2020 screen you referenced, and have long admired the strategy. However, at age 81 I'm wondering whether I'm a candidate for your 'doddering' designation. Or maybe I'm just lazy. As for options, I've long wished I'd familiarized myself with their use when I was younger and more adventurous. In any event I'd like to keep it as simple as possible without entirely giving up. I'd hoped for something to reduce concentration, but perhaps QQQE affords sufficient diversification. That may sound absurd given that I'm 75% in BRK, but I just don't see anything more attractive. To me it's akin to a highly desirable ETF. I closely follow this board, especially your remarks, for any indication of real trouble. Thanks again for all you so generously do for so many of us.

Tom

However, at age 81 I'm wondering whether I'm a candidate for your 'doddering' designation. Or maybe I'm just lazy.

If you see the clear advantages of laziness, you're definitely not doddering : )

I get you. Simple is good. I like Berkshire, I like QQQE, I like quarterly sales forever (fixed fraction of portfolio, not fixed dollar amount) as an approach to income.
That largely describes my advice to my spouse should I croak tomorrow; our accountant can do the quarterly sales if my widow doesn't feel like it.

For older folks trying to fund retirement from a portfolio, I sometimes suggest this:
First, observe that total returns are no longer such an important thing. Thus some choices that are usually horrible are no longer so bad, provided that they are merely reliable and adapt for inflation.
That category could include (in descending order of horribleness of returns) annuities, TIPS, and overvalued broad-market index funds.

As an example, whip out an envelope and figure out what this would do for you:
Put (say) 85% of your money into a ten year TIPS ladder. Live from that for a decade, spending all coupons and capital returns as they come due. Run it down to zero.
Put the other 15% into a single 10-year TIPS holding, and on maturity, put that pile into an immediate annuity. You'd be amazed at the monthly income for life you can get on an annuity if you're buying it at age 91. (I just checked: about 22.5% of purchase cost per year)
The 85/15 split is intended to approximate the split that would give you the same real income both before and after age 91. Get some annuity quotes today and it's not hard to estimate what they might be in future and what split to use, since the internal rate of return at time of purchase does not dominate the return from annuities purchased when quite old. Budget for an extra-large annuity because that's the best way to handle inflation, not buying an inflation-protected annuity.
If you don't live that long, that last 15% is just added to your estate.
This approach won't have a great real internal rate of return, for sure, but it's no work at all after the first day (except one annuity purchase after a decade), it's mostly totally inflation protected, the income rate is almost all known in advance, and for a lot of people it would be quite a good income.

The reasoning:
It is extremely difficult, almost silly, to try to plan to fund yourself at the range of ages you're extremely unlikely to reach like 100-110. Better to use some sort of pooled scheme for the far right side of the bell curve (like an annuity) because a lot of small contributions into the pool by many people will fund comfortably the few in the pool who ultimately need it. This frees you up to be happy running down the rest of your portfolio until that scheme kicks in.

I'm not saying this is the right answer for you, or for anybody, just a style of thing to consider.

Jim

Thanks again, Jim.

Your conservative advice is far superior to a plan recently proposed by a Schwab-appointed financial advisor that was specifically designed to zero out our investments in ten years, on the presumption that both my wife and I will have expired by then. That renders a longer life disastrous, to say nothing of inheritance value.

Over the past thirteen years, beginning 1/1/2011, our portfolio — including equities, all cash holdings, receivables, and net of minimal payables — has increased by 58%, despite our having withdrawn 87% of its initial value in the meantime.

While I know there's no assurance that the next ten years will follow that same trajectory, I have a hard time opting for something that's sure to diminish it substantially. So far I've been able to cope with the vagaries of the market, including a precipitous drop at the beginning of the Covid pandemic that briefly annihilated nearly all gains in net portfolio value up to that time. BRK came back with a vengeance, to-date restoring 91% of our all-time portfolio high. To be honest, my biggest concern is the uncertainty that's sure to accompany Warren's eventual departure. But, as has often been said, that's largely baked into BRK's recent price performance vis-a-vis that of the market.

So for now I'll likely shed the RSP and replace it with more QQQE, as I'm indeed a bit lazy, and don't want to deal with anything very complicated.

Tom

So for now I'll likely shed the RSP and replace it with more QQQE, as I'm indeed a bit lazy, and don't want to deal with anything very complicated.

That would be a logical idea based on my comments about relative valuation. (to the extent they have any value!)

But...
Keeping to the theme of the brilliance of laziness, you could also leave well enough alone.
RSP isn't going to go bust. It pays a dividend. It will be worth more over time quite predictably, and will be priced higher in 5 or 10 years.
If it's a little overvalued today, what's the worst case? A dip, which is normal anyway, and maybe net nowhere for a few years?
If you're reasonably well off (don't tell me), maybe that's just fine. It may not really be necessary to try to second guess it as a pick. You could just let it sit.

Mr Buffett's advice for his wife is to hold mainly the S&P 500. She will be very rich, so the dividends alone will definitely be enough whether it's wildly overvalued or not.
For some of us, we might want or need to be a bit more aggressive because we need a decent long run real positive return for many decades.
But not always. If your portfolio is comfy enough and/or the time horizon is not that long, there is no requirement to sweat the portfolio to eke out that extra couple of points.

Just a thought!

Jim

Jim, wife and I are 83 no kids-no need for any money to be left. How would you invest in annuities,TIPS,RSP,QQQE,BRKB,Other?
Pension and soc sec cover our expenses.

Thanks in advance.

Jim wrote: "RSP isn't going to go bust. It pays a dividend. It will be worth more over time quite predictably, and will be priced higher in 5 or 10 years."


The RSP and QQQE are held in a SEP IRA from which only the required minimum distributions are withdrawn. As QQQE is two-thirds of the holding and RSP the remaining third, it's perhaps already not all that far from what you've suggested. I've tried to obviate stock liquidations by deriving as much as possible of the annual RMD from accrued dividends, mostly from RSP. BRK is a long-term holding in a taxable account, so overall taxes are minimized.

Tom

Jim, wife and I are 83 no kids-no need for any money to be left. How would you invest in annuities,TIPS,RSP,QQQE,BRKB,Other?
Pension and soc sec cover our expenses.

Addressing that kind of question is pretty fraught, as everyone's set of circumstances is unique.

There are two approaches I think are worth considering, in addition to anything else you've considered.

If you're pretty well off, you don't really have to worry much about market gyrations, but it's nice to have a positive return on your portfolio anyway, so you can stay invested.
Put the whole portfolio into some good quality equities.
Each quarter, gather up the dividends received and top that cash up to be a total of (say) 1.2% of the current portfolio value by selling the same fraction of each position you hold.
Repeat for life. The money will last forever provided the investments don't go bust. The payments will be somewhat irregular, but if you've picked good things it will go up a bit in real terms over time.
Depending on your personal stance on equities, the portfolio might be one or more index funds. I lean towards 60/40 Berkshire and QQQE, but that's just me. Pick whatever makes you confident in its longevity, not highest returns.
How much variation in income might you expect? A bad rolling year might be 35% lower in real terms than the highest rolling year in the prior three years.
Assuming the assets you pick generate value at a rate of inflation + 4.8%/year or more, the portfolio and the income will rise indefinitely. But you will never get an income of more than that percentage of the [current value of] portfolio, and you'll never get to spend the capital.

What I do NOT recommend is trying to run down your portfolio, spending the capital gradually. No matter what scheme you choose, that approach always seems to have an unacceptably high chance of going broke. I am particularly annoyed by the popular retirement sites that tacitly assume that what can happen in future is no worse than what's happened in the last 100 years, and frequently also assume that the returns starting from recent high valuations are likely to have the same distribution of outcomes as portfolios starting when things were generally cheap and the broad market was usually paying a 4-6% dividend and real bond yields were high. You can't estimate when you'll die, and you can't estimate when you'll run out of money with a run-down scheme, so you definitely can't make the latter happen just before the former with any amount of spreadsheet calculations and historical data.

The other direction of approaches, which I am often a fan of, is the "two prong" solution I mentioned above. Handle the longevity risk as a separate problem.

The general idea is to divide the the portfolio in two.
Spend the bigger chunk in a straight line over a fixed number of years. Let's say 10 years, till you and your spouse are both 93. Play with the numbers.
Save back a smaller part, perhaps by buying a single 10 year TIPS bond now, to buy an immediate annuity at that future maturity date: eliminate longevity risk.
You'll likely get a very good income at that time relative to the cost of the annuity.

That leaves the question of what to put the bigger part of the money into that you'll be running down.
Not to sound dark, but it's probably not so many years that the rate of return matters very much. You might find TIPS were just fine, and there won't be any down years at all, and they don't go bust. If the numbers work well (a bit if), why work hard and lose sleep?

It's not too hard to figure out about what this would provide you with.
Here's a site that will create a typical TIPS ladder for you, for the bigger part. https://www.tipsladder.com/
Here's a random site that will give you a quote for an immediate annuity if you were (say) age 93 today, without requiring your contact details.
https://www.schwab.com/annuities/fixed-income-annu...
It's not wildly crazy to guess that the income from an immediate annuity for someone age 93 now will not be so different from the income for an immediate annuity purchased 10 years from now for someone 93 then. This generalization is not true for younger people when the prevailing interest rates dominate, but is much more true for older people where the mortality tables dominate.

Example: Each $100k put into an 10-year TIPS ladder today will currently get you 10 years of an inflation adjusted income of $11040/year.
At that point, buy a single or joint annuity as appropriate with the money that was held back.
For every $100k you need in real funds a decade from now, you'll have to put about $84k into a TIPS position now. You get inflation protection plus a small real yield.
That annuity won't be inflation adjusted after purchase, so plan on getting one that gives you a higher income than your portfolio run-down phase to handle several years of unknown inflation 10+ years from now. Maybe 20-25% higher?
At the moment, an immediate single life annuity for a male age 93 would get you an income for life (not inflation adjusted) of about 26%/year of the purchase cost. As mentioned, ten years from now the rate is pretty likely to be comparable, even if prevailing bond rates are different.

Jim

Example: Each $100k put into an 10-year TIPS ladder today will currently get you 10 years of an inflation adjusted income of $11040/year.
...
At the moment, an immediate single life annuity for a male age 93 would get you an income for life (not inflation adjusted) of about 26%/year of the purchase cost.

Thanks again Jim. This elaboration makes your earlier suggestion far more understandable for me.

Tom

"Jim, wife and I are 83 no kids-no need for any money to be left. How would you invest in annuities,TIPS,RSP,QQQE,BRKB,Other?
Pension and soc sec cover our expenses."

If I may chime in, don't forget the cost of 24-hour care. I recently was facing that possibility, and the cost is scary, $30K/month for decent care. You've probably considered that possible expense, but it's good to remember in a discussion of retirement income and expenses. Wishing you good health and good investing.

rrr12345

Mr Buffett's advice for his wife is to hold mainly the S&P 500. She will be very rich, so the dividends alone will definitely be enough whether it's wildly overvalued or not.

True, though Buffett did say the 90% S&P500, 10% cash portfolio would be fine for anyone.

CNBC 3/3/2014:
BUFFETT: Well, I didn't lay out my whole will. There's hope for some of you who haven't been mentioned yet.

The-- but I did explain, because I laid out what I thought the average person who is not an expert on stocks should do.

And my widow will not be an expert on stocks. And- I wanna be sure she gets a decent result. She isn't gonna get a sensational result, you know? And since all my Berkshire shares are going-- to philanthropy-- the question becomes what does she do with the cash that's left to her? And I've been-- part of it goes outright, part of it goes to a trustee. But I've told the trustee to put 90% of it in an S&P 500 index fund and 10% in short-term governments. And the reason for the 10% in short-term governments is that if there's a terrible period in the market and she's withdrawing 3% or 4% a year you take it out of that instead of selling stocks at the wrong time. She'll do fine with that. And anybody will do fine with that. It's low-cost, it's in a bunch of wonderful businesses and it takes care of itself.

For our year 2000 retiree, withdrawing 4% from a 90% SPY, 10% cash portfolio would have been gut wrenching. They have about 5.5 years worth of withdrawals remaining, and might just make it 30 years. Valuations matter!

90% Berkshire would have been very fine, they have 10x the SPY investor.

60% SPY 40% VBMFX would have been OK, they got 13 years worth remaining.

https://www.portfoliovisualizer.com/backtest-portf...

For our year 2000 retiree, withdrawing 4% from a 90% SPY, 10% cash portfolio would have been gut wrenching.

Indeed. (it would be unsportsmanlike to mention that the overall price/sales ratio of the S&P 500 is currently around 20% higher than it was in March 2000 when the S&P 500 peaked...)

It would also have been very tricky to implement.
You have to do some pretty serious financial analysis to decide when to use the cash versus when to sell more SPY to top up the cash to 10% again. (It's not THAT critical an issue if you get it wrong, but still, you have to figure out what to do). It also doesn't address the critical point of how you calculate how much you can spend in a given year. Yet this strategy was apparently aimed specifically at people who don't have those skills.

Unless a retiree is so rich they are sure you can live from the dividends alone, Mr Buffett's 90/10 it isn't really an answer to the problem of how to fund one's retirement from a portfolio sensibly.

Broadly speaking, there are only three approaches for funding a retirement from a portfolio.

(1) Pick a scheme that tries to run down the capital so you enjoy it, but not so fast that you run out of money if you live a long time. This simply doesn't work...longevity and markets are both very hard to predict, so there is always an unacceptable risk of going broke.
(2) Pick a scheme that spends no more than the increase in [probably smoothed] real value of the portfolio. You can never go broke, but you never get to spend the capital.
(3) Cut off the longevity risk with some pooled solution like an annuity or tontine. In a large pool of participants, not everyone is going to live an unusually long time, so each person gets a whole lot of risk reduction for a small fraction of the cost of funding it themselves as individuals. This might be immediate and with all the money, or a two-part as I have mentioned: spend most of the money in a straight-ish line for some years, then annuitize the rest at some advanced age to handle all years after that.

I eliminate approach #1 from consideration immediately. The dog food risk is too great.

There is a hidden side benefit to option #3. Every year that you live into great old age, you feel like a genius because the decision has worked out so well for you. The only circumstance that it turns out not to have been a good financial decision is the instance that you're dead, so you never regret the decision. So you spend your entire remaining lifespan chuckling at the chumps who took the other side of the deal.

Jim

True, though Buffett did say the 90% S&P500, 10% cash portfolio would be fine for anyone.
...
Unless a retiree is so rich they are sure you can live from the dividends alone, Mr Buffett's 90/10 it isn't really an answer to the problem of how to fund one's retirement from a portfolio sensibly.

A random thought on that.

The current dividend yield of the S&P 500 is about 1.40%. Equally weighted (RSP) is a bit higher at 1.64%.
But these days you can buy a whole slate of stocks at many brokers with a single command.
If one were to buy an equally weighted portfolio of only those S&P 500 stocks paying over 1% dividend yield, you'd still have 321 stocks, presumably enough diversification for anybody. Reconstitute it from time to time when you feel like it--annually is often enough, or whenever. The average dividend yield of that portfolio is currently about 2.92%, over twice that of SPY, making withdrawals a heck of a lot easier to decide about. Despite just having had a bad year relative to the S&P 500, this approach has actually performed a bit better over the last 20, 25+ years. In any case, they're pretty close: no obvious reason to think one will do better than the other over time.

An added benefit of owning the stocks directly yourself, other than no management fee, is that you don't have to follow the S&P index component changes the day they do them, a very simple way to guarantee you have an edge over time.
https://www.researchaffiliates.com/publications/ar...
https://www.researchaffiliates.com/publications/ar...
The implementation is simple: do every index change they do, just don't do it right away. Wait a year or so. Outperformance by laziness.

Jim

"For our year 2000 retiree, withdrawing 4% from a 90% SPY, 10% cash portfolio would have been gut wrenching...90% Berkshire would have been very fine...60% SPY 40% VBMFX would have been OK"

Nice backtest tool.

don't forget the cost of 24-hour care. I recently was facing that possibility, and the cost is scary, $30K/month for decent care.

I was in Albuquerque recently and there were billboards on the highway saying how lethal Fentanyl was, and how it is so common and easy to get.

I guess that beats driving yourself into a bridge abutment at 100 MPH.

I have seen too many people with terminal Alzheimer's, cancer, strokes, and the like. I have no desire to experience it myself.

If one were to buy an equally weighted portfolio of only those S&P 500 stocks paying over 1% dividend yield, you'd still have 321 stocks, presumably enough diversification for anybody. The average dividend yield of that portfolio is currently about 2.92%

I have a problem every time I look at investing for dividends. With an investment of $100,000 this will only pay $2,920 a year. That hardly seems worthwhile--that's not exactly a life-changing sum. Especially when these days you can get 4.75% on 20 and 30 year Treasury bonds.

That's about the same you'd get MONTHLY from Social Security, if you are retired.

Well, you do get some capital appreciation I guess. But if you are going to hold forever for the dividends then capital appreciation does not matter.

"I have a problem every time I look at investing for dividends. With an investment of $100,000 this will only pay $2,920 a year. That hardly seems worthwhile--that's not exactly a life-changing sum. Especially when these days you can get 4.75% on 20 and 30 year Treasury bonds.

That's about the same you'd get MONTHLY from Social Security, if you are retired.

Well, you do get some capital appreciation I guess. But if you are going to hold forever for the dividends then capital appreciation does not matter."

There are obviously different flavours of dividend investing that people can often tailor to their own tastes (but understandably will not suit all investors). If you are settling for a 2.9% yield on purchase, then presumably you are factoring in a growth of those dividends to occur over time too?

Using GTR1 and SIpro data, dividend does not seem to have much impact on stock selection among S&P 500.

Following is based on holding stocks within S&P 500 for 253 days, starting from 19970902, averaged over all start days.

Hold all stocks yield > 1%, CAGR 9.9, SAWR 7.6 300 stocks average hold

Hold all stocks yield < 1%, CAGR 9.9, SAWR 7.1 200 stocks average hold

Hold 250 stocks with highest yield CAGR 9.8, SAWR 7.6. 250 stocks held

Hold 250 stocks with lowest yield CAGR 9.6, SAWR 7.0. 250 stocks held

Hold stocks with no dividend CAGR 10.2, SAWR 6.8. 100 stocks on average

Hold top 100 yield stocks. CAGR 9.7, SAWR 7.4. 100 stocks held.

Hold all stocks equally, CAGR 9.9, SAWR 7.6. 500 stocks held

https://gtr1.net/2013/?h253::sp500.a:et1:ratio%28d...

Craig

Jim, Thank you for your advice?. I like the BRK-B and QQQE portfolio advice,but I have done nothing so far because of the market and those stocks being so high now.
Any ideas on how to handle my fear of going in just when market is so high and might drop a lot?

Jim, wife and I are 83 no kids-no need for any money to be left. How would you invest in annuities,TIPS,RSP,QQQE,BRKB,Other?
Pension and soc sec cover our expenses.

My original question and as stated in previous, have done nothing yet because of fear of market being so high.

Any ideas on how to handle my fear of going in just when market is so high and might drop a lot?


Yeah. Hold your nose and dive in.
Look at a long-term chart of the S&P500. Just about every place you put your finger, it was higher than it was in the past. And lower than it was in the future.

I passed up buying 1 share of BRK because it seemed stupid to pay $2000 for a single share of some company that was at its all-time high. That share would not be BRK-A and worth $625,700

"Fear is the mind-killer. Fear is the little-death that brings total obliteration."

I wouldn't bother with the market. Focus on how the cash can improve your life or someone else.

Enjoy

Tecmo

wife and I are 83 no kids-no need for any money to be left. How would you invest in annuities,TIPS,RSP,QQQE,BRKB,Other?
Pension and soc sec cover our expenses.

Then why are you even investing? You could put it all in money market accounts and be fine. You could lose it all tomorrow and also be fine, right?

My wife is good at doing math in her head (and doesn't care much about investing, leaving that to me). She once said said, "If we had $1,000,000 we could take out $50,000 a year and it would last 20 years. On top of what we'd get from pension & social security."
(Unstated but implied was: "So get to work on getting us up to $1,000,000.)

Since you don't need the money from investments, why not just work on running up the score? BRK for relative safety, VUG for growth. SPY for being a benchmark investment.

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