Similar to Moemg's thread on "How far will you ride this market Down?". The question now is : How far will you ride this market UP?
I don't have a definite answer - maybe S&P 1,000?
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Until my AA is almost back to pre-crash levels, at which point I'd likely reduce my AA from 70/30 to something like 55/45 or 60/40 at most. Who knows whether that would take a year or ten years...
__________________ "Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)
Until my AA is almost back to pre-crash levels, at which point I'd likely reduce my AA from 70/30 to something like 55/45 or 60/40 at most. Who knows whether that would take a year or ten years...
Hey, I thought yesterday you were saying 50/50. Are you losing your resolve? If your portfolio gets back to pre-crash levels, it seems like you would be close enough to ER to get really conservative.
My planned AA is 45:55 (equities:fixed), though right now my equity fraction is about 5% off, still.
As for me, I'm ready for a great ride upwards. I won't change my AA from 45:55, but FINALLY I will have a chance to shift some of my fixed portion out of MM and into bonds. I had delayed doing that after my unexpected windfall last year because some bond funds were sliding, and I needed to read and learn more about bonds anyway.
__________________ "Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harborless immensities." - - H. Melville, 1851
Hard to say. I'll be a bit more mindful of valuations this time around, that's for sure.
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DINKs, mid 30s, still working. FIRE portfolio = 25 x annual living expenses. Goal: FIRE Portfolio = 40 x annual living expenses and ESR by 2013.
I have increased my allocation to equities since the beginning of the year (from 10% to 35%) but am not yet ready to commit more (up to 50-60%) and then leave it there. At a minimum I think we need to see housing prices stabilize based on case-shiller data. A significant improvement one the ECRI WLI would also help.
The economy cannot begin to recover until the financial system stabilizes.
The financial system cannot stabilize until housing prices stop falling.
I don’t know if the current increase in the equity markets is a bear or a bull or a dead cat or some other type of animal - but the risk of equity loss is still quite high – and I’m not sure that the shorter term upside potential is high enough to compensate.
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Advice from a stranger using a pseudonym with an avatar.
My AA was 100/0 before the downturn. Today I am at 83/17. I've made a decision to DCA once a month to get back into equities. I was moving back in at 3% intervals but will probably slow to 1-2 % DCA on the way up. I will not exceed 30%.
I've been slowly transferring assets from MM, bond and stable value funds into equities since last October. Our current equities to bonds ratio in our investment accounts is about 80/20. If the S&P gets back to 1000, then I'll likely rebalance back to our target AA of 60/40.
Last edited by IBWino; 03-25-2009 at 04:15 PM.
Reason: Actually started changing AA in early October (not September as originally posted).
Don't put too much into that number - it just gets the S&P back into the downward channel from the last top and it might be a psychosocial level to the pubic.
I'm thinking I would sell all my mutual funds. I'm thinking that this rally is a bear market rally and can go back down close to the lows.
A 20% increase from Monday's levels would cut my investment loss in half from their lows.
I really don't have any great insights into this market.
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Sometimes death is not as tragic as not knowing how to live. This man knew how to live--and how to make others glad they were living. - Jack Benny at Nat King Cole's funeral
my AA target is 35/65. I re-balance in June and January, but if the market rides me up to 40/60 then I'll re-balance sooner. (As of last night I was up to 36/64).
Don't put too much into that number - it just gets the S&P back into the downward channel from the last top and it might be a psychosocial level to the pubic.
I'm thinking I would sell all my mutual funds. I'm thinking that this rally is a bear market rally and can go back down close to the lows.
A 20% increase from Monday's levels would cut my investment loss in half from their lows.
I think a lot of people will do the same. My old 401k investment advisor called the other day just to see if there was anything he could sell me. Well, he didn't put it that way but that was the purpose. He said he thought the DOW would rally over the next few months to around 9,500 and would then get his clients to cut back. He thought the market would test the lows after the rally. And I have heard many others express a similar sentiment.
So it the market does have a nice rally to 9,000 or more, I'm sure I will trim some. But who knows what will happen......I sure don't.
Thanks, Dex--I know the answer to how low one would ride the market would be, "til it falls to XXXX but then I'm pulling out of equities"--so I guess it's the same answer for the most part.
Similar to Moemg's thread on "How far will you ride this market Down?". The question now is : How far will you ride this market UP?
I don't have a definite answer - maybe S&P 1,000?
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.
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If your portfolio gets back to pre-crash levels, it seems like you would be close enough to ER to get really conservative.
Well, maybe my nephews and niece will because I will probably be 6 feet under when that happens.
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