Poll: Is AA rebalancing considered market timing?

[Alan]

btw, if someone has a 50/50 AA, and thinks things will get bad and changes to 25/75, I don't consider that to be a reallocation of their AA. That's changing their AA plan, and I consider that market timing. If they just adjust their AA a % or 2 because they are a year older, I don't consider that timing if they are consistent with it.

Totally agree.

 

[REWahoo]

btw, if someone has a 50/50 AA, and thinks things will get bad and changes to 25/75, I don't consider that to be a reallocation of their AA. That's changing their AA plan, and I consider that market timing. If they just adjust their AA a % or 2 because they are a year older, I don't consider that timing if they are consistent with it.

What do you consider the actions some of us took who had say a 50/50 AA and after the "recent unpleasantness" decided we'd sleep better with an AA of 40/60 or 25/75. Was that market timing or was it simply a way to save on laundry detergent?

 

[CuppaJoe]

Are we having an AA meeting here?

Bill isn't on my friends list, yet.

I think so especially after seeing all the responses to the Beer thread !

There's a beer thread!

 

[traineeinvestor]

I voted "yes" but having read the question which refers to whether AA is "considered" market timing (not whether it "is" market timing), accept that the right answer is whatever people consider to be the right answer.

I also don't believe it matters what you call it.

 

[RunningBum]

What do you consider the actions some of us took who had say a 50/50 AA and after the "recent unpleasantness" decided we'd sleep better with an AA of 40/60 or 25/75. Was that market timing or was it simply a way to save on laundry detergent?

Good question. I dunno. Unless the person goes back to 50/50 if/when things have a better outlook, they are not a market timer, I guess.

 

[Purron]

In this poll with it's choices, I am totally lost.

It's OK.....don't try to find me.....

Too late. The ER.org search party has already been dispatched. Good news though, the lead search dog has a kegger

 

[kyounge1956]

(snip)btw, if someone has a 50/50 AA, and thinks things will get bad and changes to 25/75, I don't consider that to be a reallocation of their AA. That's changing their AA plan, and I consider that market timing. If they just adjust their AA a % or 2 because they are a year older, I don't consider that timing if they are consistent with it.

What do you consider the actions some of us took who had say a 50/50 AA and after the "recent unpleasantness" decided we'd sleep better with an AA of 40/60 or 25/75. Was that market timing or was it simply a way to save on laundry detergent?

(snip) Unless the person goes back to 50/50 if/when things have a better outlook, they are not a market timer, I guess.

Agreed. It's all in whether the change of asset allocation was done in response to what had already happened, or in expectation that something is going to happen in the future. The former is a revision of one's personal investment plan, the latter, IMO, is market timing.

 

[chinaco]

Two classic rebalancing approaches for managing asset allocation:

1. Time based
2. Trigger based.

Both are legitimate.

IMO - Neither are timing. If one decides to rebalance early or late... based on whatever circumstances or reasons... they may wind up better off or not. In the end, if they have some sort of allocation strategy and follow it, they will likely be better off.


Restructuring is not rebalancing.... but could result in asset classes being rebalanced. I have done this as I have gone through life stages and am changing allocations or securities, or to correct mistakes, or to simplify the portfolio so I can manage it better.


I did a major restructuring after the tech bubble burst. I began restructuring for FIRE about 4 years ago... and am still working it out in steps.... I won't be done till I have rolled over the remaining portions of our assets.

The retirement system(rules and laws) in the US has resulted in complicated, splintered portfolios that make management of it a chore.