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Old 10-28-2014, 01:15 PM   #21
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NW-Bound's Avatar
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We are getting away from the OP, but since this matter (market timing ) has been broached, please allow me to state something that came to mind.

If the expected market return is not going to be that great - using fundamental analysis of the economic condition - then when we have a great run, would that not mean the market is ahead of the game, and it is prudent to dial back our AA?

Running-man says that what is he is doing in another thread, and I have been quoting Kelly criterion to say that there is mathematical basis for reducing one's bet when the probability of the outcome changes.

Caveat: I am still around 70% equity, and have been thinking about either dialing back or selling options to hedge.

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Old 10-28-2014, 01:37 PM   #22
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NW-Bound, you are right and we are getting off the OP's intentions I think. It is probably my fault.

So my last word on the subject is that I've never found a good backtested way of dialing back without giving up returns. The current situation is even worse given bond real returns (5 year TIPS now at -0.1%).

I just might start a new thread: "How to reduce equities optimally?"
First I have to look at what I've tested in the past.

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Old 10-29-2014, 03:25 PM   #23
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Meandering threads are in the nature of this site. And I think the site is the better for it.

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