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Old 05-21-2013, 08:03 AM   #21
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I've collected what various experts recommend; some use time others use percent. Some are very specific, some advise ranges:

1-3 yrs. Bob Clyatt, Work Less, Live More
4 yrs. Jim Otar (in Dec of presidential election years)
2-5 yrs. Wm. Bernstein
6.25 yrs Wm. Bengen
+/- 10% Harry Browne
+/- 5% Vanguard Research
+/- 10-15% Burton Malkiel
+/- 10% or never. Jack Bogle, "Re-balancing is a personal choice, not one that can be validated by statistics".
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Old 05-21-2013, 09:24 AM   #22
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This recent rebalance brings my cash+bonds holdings up to 21 years of current (after tax) budget. I don't think I'm willing to go above that - looks like I just discovered a "ceiling".

So - either bonds sell off some soon, or, if after withdrawals equity is still above target, I may have to let my equity allocation creep higher. I was implementing a very gradual increase in bond allocation as we get older, but I'm putting that on hold for now - basta!

[In early 2009, rebalancing brought cash+bonds holdings down to 12 years budget - I discovered that as my "floor" - I wasn't willing to draw down further to buy more equities.]

Hope I didn't just jinx anything! knock on wood
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Old 05-21-2013, 04:21 PM   #23
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Originally Posted by audreyh1 View Post
This recent rebalance brings my cash+bonds holdings up to 21 years of current (after tax) budget. I don't think I'm willing to go above that - looks like I just discovered a "ceiling".

So - either bonds sell off some soon, or, if after withdrawals equity is still above target, I may have to let my equity allocation creep higher. I was implementing a very gradual increase in bond allocation as we get older, but I'm putting that on hold for now - basta!

[In early 2009, rebalancing brought cash+bonds holdings down to 12 years budget - I discovered that as my "floor" - I wasn't willing to draw down further to buy more equities.]

Hope I didn't just jinx anything! knock on wood
I'm thinking along the same lines with bonds right now. Bonds are expensive by almost any standard now, while stocks are still at least at moderate levels. Sometimes you just have to look at the big picture and say "why would I buy something expensive when the other alternative is at average cost?" I just can't bring myself to buy bonds at this point.
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Old 05-21-2013, 04:44 PM   #24
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I'm thinking along the same lines with bonds right now. Bonds are expensive by almost any standard now, while stocks are still at least at moderate levels. Sometimes you just have to look at the big picture and say "why would I buy something expensive when the other alternative is at average cost?" I just can't bring myself to buy bonds at this point.
Whether "bonds are expensive right now" isn't a concern of mine at all. I will be holding bond funds for decades (I hope), and if/when/as they correct, I will simply buy more, assuming equities haven't corrected worse. I am quite OK with this scenario.

It's rather that once I have X years of expenses in "steadyish" fixed income (including cash BTW), do I really need more? Seems like with 21 years expenses covered, I should be able to handle a little more stock market volatility in exchange for a bit more long-term growth.

And, again, the above sure sounds like tempting fate.
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Old 05-21-2013, 05:02 PM   #25
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Whether "bonds are expensive right now" isn't a concern of mine at all. I will be holding bond funds for decades (I hope), and if/when/as they correct, I will simply buy more, assuming equities haven't corrected worse. I am quite OK with this scenario.

It's rather that once I have X years of expenses in "steadyish" fixed income (including cash BTW), do I really need more? Seems like with 21 years expenses covered, I should be able to handle a little more stock market volatility in exchange for a bit more long-term growth.

And, again, the above sure sounds like tempting fate.
Buying bonds which had a 30 year bull run and are excessively expensive sounds more like tempting fate. To each his own.
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Old 05-21-2013, 05:20 PM   #26
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Buying bonds which had a 30 year bull run and are excessively expensive sounds more like tempting fate. To each his own.
In maintaining an AA I don't have to worry about which asset class might be overvalued at any given moment in time. If/when it corrects, I buy more. I don't trim or change my AA in anticipation of a correction.

We'll see. We still don't know if we are going the way of Japan deflation. It could still be a long time before a "bear market" in bonds starts, and it still could be gradual. Stocks seem expensive too (they seemed reasonable at the start of the year but no longer). We just don't know how it will play out, so I won't try to guess.
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Old 05-31-2013, 09:56 PM   #27
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Since rebalancing on 5/20 - bonds down 0.8%, but stocks down 2.5%! (And I still have end-of-month distributions to be paid on the bond funds which will reduce the loss).

Not that it matters or anything. Who knows what things will look like in 3 months, or by the end of the year?
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