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Old 01-05-2017, 08:41 PM   #21
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Join Date: Jan 2006
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Originally Posted by Lsbcal View Post
The only thing I have done is to rebalance back to 60/40 when the AA goes to 61/39. I think there were 3 rebalance points last year.
Wow, that is pretty narrow. Divergence is good - benefits from rebalancing happen when asset classes have time to gain a lose a bit before rebalancing. And optimal periods are at least a year, 18 months for taxable accounts.

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Old 01-05-2017, 09:36 PM   #22
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Originally Posted by Dd852 View Post
... I had been 60% equities 6% REIT fund and 34% fixed income (not counting the cash cushion at all - see below) - moving to 55-5-40...
I used to be 75 to 80% in equities. I am now at 59%. Although I think the market is tipsy enough that a market correction may happen any time if triggered by some events, I already have a lot of cash on hand.

It is also difficult for me to find something to sell, as I own individual stocks and think that the ones I own now have been beaten down fairly badly relative to the S&P, hence are not as overvalued. Wrong opinion perhaps, but that's how I feel.

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Old 01-05-2017, 11:43 PM   #23
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Way back I looked at and ball-parked about how long an average bull market lasts historically. So, 2017 was set at the first major point, where it got near 50% for an average run time, then after that set some more time marks every 2 years after that when the probability would keep going up significantly from there. Also, I factored in that my necessary allocation with a few years before and after retirement needs to have 20% in something safe, which is enough to ride through any of the historical downturns. If a downturn happened in that period, it isn't realistic I will be able to fix it if I'm too aggressive within that period.

So, I was one of those who did change it this year. I'm about 4.5 years away from retirement, and it's 2017. Previously I was 100/0, and now I'm about 70/0/30. I will go down to 60/0/40 if the bull is still running, both due to the extra long run, and entering the 3-year safety period, and will again go down another 10% in 2021 for the same reasons.

Of course, 1-1.5 years after a downturn inevitably occurs, I definitely will be shifting it back up, either to 80/0/20, or higher, depending on how sharp the low goes.

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