Return to the Abacos
Earlier this month we arrived back in the Bahamas. We keep our sailboat, Satisfaction, on land at Green Turtle Cay, another cay in the Abacos about 20 miles away from Hope Town. It takes 2 to 3 exhausting days to get our boat set up for living after the summer hurricane season. Fortunately, the Abaco area of the Bahamas was again this year spared any hurricane damage.
Biking on Elbow Cay
After getting the boat rigged up for the season, another challenge is getting around Whale Cay to get back to Hope Town. The area between Whale Cay and the mainland is too shallow for most sailboats to pass. This requires these boats to go outside Whale Cay into the ocean for about 2 miles. In this area of the ocean the deep water comes pretty close to Whale Cay and then suddenly gets relatively shallow. With any significant weather with an east wind component this seabed configuration can cause some very large breaking waves that hit your boat broadside. So it is important to make this pass on calm days. Because of this it can take a week or longer sometimes to get around Whale Cay to reach Hope Town. For very shallow draft sailboats and powerboats, there is a pass where it is possible to go inside Whale Cay, but it needs to be near high tide to use this route. We, fortunately, had calm weather when we left Green Turtle Cay.
Snorkeling in the Bahamas
The weather picked up a couple days after we reached Hope Town. As a result many regular boats here in the winter have not arrived yet as the Gulf Stream crossing from Florida to the Bahamas has been too rough.
The first couple weeks back onboard we spend a lot of time fixing a lot of small items that stopped working while the boat was hauled out. Due to the significant amount of rainfall because of the many nearby hurricanes this past summer, we seem to have several boat leaks that we did not have before. One port kept leaking for a week without any rain. Somewhere rain water has pooled inside our deck and finally found a way out when we opened the port. Leaks are often difficult to trace the source.
Beautiful beaches are abundant in the Bahamas
The holiday season is a really great time to be in Hope Town. There are a lot of activities scheduled. There are several country music concerts scheduled, a couple art shows, a comedy show, a Christmas play put on by the local elementary school, and several holiday parties. So we have a lot to look forward to.
Some Retirement Planning Thoughts
Before ending this post, I wanted to mention a couple very important retirement planning concepts that I discuss in detail in my ebook, Charting an Early Retirement. In Chapter 20 I talk about the importance of equity allocation. In Chapter 22 I discuss the important concept of periodically re-balancing your portfolio. The reason these two concepts are important now is the stock market has had a steady move higher the last couple years indicated by the two major stock indexes as summarized in the adjacent table.
|
Stock Index |
2017 YTD Return |
Return Since Jan 2016 |
|
S&P 500 Index |
15% |
27% |
|
Dow 30 Industrial Average |
19% |
36% |
With these market moves the last couple years, your stock allocation has likely increased quite a bit if you have not made any adjustments since January 2016. So, as I stress in my ebook, I believe it is important to take some of your gains off the table and “Re-balance” your portfolio back to your target allocation.
I will use my own portfolio allocation as an example. I am currently 63 years old and my chosen target portfolio allocation is 40% stocks and 60% fixed-income. I review and, if necessary, re-balance my portfolio every January.
Calculating my equity allocation yesterday my current stock allocation is 45% which is up from 40% since I re-balanced my portfolio this past January. So by the end of this year, I will sell some of my stock market gains and buy more fixed-income investments to bring my overall portfolio back to 40% equities and 60% fixed-income.
Some readers may question whether selling some stocks is the right thing to do right now given the current stock market seems to have significant upward momentum. The stock market definitely has upward momentum, but this re-balancing step is simply a risk reduction move. No one knows when this stock bull market will end.
Back in the summer of 1999 during the dot com stock market boom, I remember my father told me, “When this bull market ends, the stampede for the exits will be like nothing we have ever seen.” He was right then and I think this sentiment will be correct again as well when this current bull market ends. In my humble opinion, it is best to not be part of this stampede.
However, please remember, I am not giving investment advice here; I am only telling you what I think is important and what I am doing.
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