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Old 03-25-2009, 03:59 PM   #21
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Full auto - Target Retirement 2015 while I sit in the balconey and eat popcorn.

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Old 03-25-2009, 04:19 PM   #22
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I have divided my equity portfolio into 2 basic parts. A buy-hold part (BH) and a market timed part (MT). I did this after extensive backtesting of MT strategies using lots of spreadsheets. The BH part is currently about 43% of my portfolio and the MT is 0%. When the buy comes through on the MT part I'll use it to rebalance up to maybe 55% equities. As the market advances in fits and starts I'll take money out of the BH part to rebalance.

What I like about the MT part is that it is completely mechanical. No guessing about market directions, valuation judgements, or listening to the guru of the day. It is not foolproof and there will be times it will loose altitude along with the BH part.
Not sure I get it. If you are using the BH portion to re-balance then surely it is not BH since you'll be "Selling" in response to market moves, not "Holding"? Is it perhaps BS?
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Old 03-25-2009, 04:30 PM   #23
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Not sure I get it. If you are using the BH portion to re-balance then surely it is not BH since you'll be "Selling" in response to market moves, not "Holding"? Is it perhaps BS?
I'm not sure if this was sarcastic or not, so I'll assume you are asking in a nice way. If the market advances over the next few years both the BH and MT parts will grow beyond my upper bound on equities. So for book keeping purposes, I'll sell some of the BH part along the way (and buy fixed income) while letting the MT part expand. If there is an MT sell signal then that will go into short term fixed income.

So maybe the BH/MT starts out at 35%/20% and becomes 30%/25% when an MT sell comes along. In that case if we have an extended market decline I'll still have 30% in equities. The MT approach I use has only a few trades per year on average.

Well, at least it's a plan with some well defined rules of engagement .
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Old 03-25-2009, 04:30 PM   #24
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When it gets within 5 percent of the 200 day moving average I would become more cautious myself. (Currently about 1033 on SMA 200 day average)
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Old 03-25-2009, 04:54 PM   #25
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All the way up. At some point in the next few years I will start adding a small fixed income component to my permanent asset allocation. Maybe increase that fixed allocation 2% a year for a while. I'd be more likely to get more heavily invested in fixed income securities if the market has just gone up 100% over the next few years than if it is still puttering along at near flat returns.
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Old 03-25-2009, 04:54 PM   #26
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I'm not sure if this was sarcastic or not, so I'll assume you are asking in a nice way. If the market advances over the next few years both the BH and MT parts will grow beyond my upper bound on equities. So for book keeping purposes, I'll sell some of the BH part along the way (and buy fixed income) while letting the MT part expand. If there is an MT sell signal then that will go into short term fixed income.

So maybe the BH/MT starts out at 35%/20% and becomes 30%/25% when an MT sell comes along. In that case if we have an extended market decline I'll still have 30% in equities. The MT approach I use has only a few trades per year on average.

Well, at least it's a plan with some well defined rules of engagement .
It wasn't meant to be sarcastic - I just couldn't resist - thanks for the restrained reply .

I see that you are talking about years which explains a lot. I assumed the OP was talking about weeks or months since the Market dropped over 50% in 12-14 months and then 2 days ago was up 20% on the year.
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Old 03-25-2009, 05:04 PM   #27
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As others have said, I'll be riding it up and down, rebalancing as indicated by my predetermined bands. I have a preset glide path towards estimated FIRE date for gradually shifting my AA towards a 60:40.

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Old 03-25-2009, 05:05 PM   #28
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I don't plan to sell equities until I get up to my asset allocation of 55% equities/45% CDs and treasuries.
I'm still buying equities verrryyy sloooowly, auto scheduled, most days of the week.
But then before this wild ride, my target AA was 60/40, so I guess IF it comes back up, I'm not really riding it quite all the way to the top.
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Old 03-25-2009, 06:27 PM   #29
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Like others, up and down. I don't have a clue about when to get out. I will keep an eye on those inflation protected SPIA's for a good rate
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Old 03-25-2009, 06:57 PM   #30
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I use a wide range for my target allocation: Equities from 50-60% do nothing. I sold some equities back in early 2007 (no didn't get the peak in October) since it quickly went over my 60% upper limit in early 2007. I was wondering if I would have the guts to actually increase the equities allocation if my AA dropped below 50% but it started going back up after hitting a minimum of 52.7%. So, in answer to the Op, I'll ride up until my AA goes over 60% and then start selling as I've doing for many years now. (ER'd in December 2002). That works for me
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Old 03-25-2009, 07:14 PM   #31
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I'd be tempted to "Sell in May and go away" if the SPX is above 900 in a month or so. I'd do that with the intention of getting back in at lower levels. I probably won't though because I have no idea if we'll actually see lower levels.
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Old 03-25-2009, 07:24 PM   #32
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My hands are firmly on the bucking bronco's reins..nice horsey...
I think when I'm past 55, I'll be stricter with myself regarding the ol' "age=bonds" rule.
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Old 03-28-2009, 02:03 AM   #33
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I'll re-balance at S&P 1000. As part of that process I'll take 100K and put it into a CD ladder.
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Old 03-28-2009, 10:38 AM   #34
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I'll re-balance at S&P 1000. As part of that process I'll take 100K and put it into a CD ladder.
Will this be a dial-down of your equity allocation, relative to October 2007?

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Old 03-28-2009, 11:55 AM   #35
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I rebalanced on the way down. I'll be doing the same on the way up. Ad nauseam.

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Old 03-28-2009, 12:12 PM   #36
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I'll re-balance at S&P 1000. As part of that process I'll take 100K and put it into a CD ladder.
I'm going to do the same but at S&P 999. It will be a reduction in equities from 09/07. However, I will sleep better with the additional 100K ladder.
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Old 03-28-2009, 12:16 PM   #37
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As of this Friday, our net worth broke even with when we retired in August 1999. I guess anything above this is gravy? It's not like we didn't spend a bunch of money in the last 10 years.

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Old 03-28-2009, 01:02 PM   #38
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Us too. We are ahead of our portfolio in Aug 2002 when we ER'd and we have drawn down $300k during that period. All that other stuff was just numbers on paper...akin to "Oooh my house is worth $2 million, but I can't spend it..."
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Old 03-28-2009, 01:21 PM   #39
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A tad north of 4% SEC yield wise( handgrenade close to the mythical/magic? 4% SWR number).

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heh heh heh - I'll spend more come summer. .
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Old 03-28-2009, 01:48 PM   #40
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For those of you who are ahead of your original retirement portfolio, did you inflation adjust the numbers?

After inflation adjusting my Apr 2003 retirement, we are -14% below the starting portfolio. At the end of 2007 we were +19% ahead. If that number gets as positive as 2007 again, it will be a big signal to me to get more conservative.
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