[haha]

Quote:

Originally Posted by RunningBum Because in many cases they are mutually exclusive. If I get a lump sum payment from an inheritance, business sale, house sale, whatever, suddenly I am very heavy in cash. My choice is to immediately try to get to whatever asset distribution I want to have, which means lump sum buying, or DCA'ing my purchases, which means it takes much longer to get to the asset mix I want. My own preference is to get to the asset mix I want as quickly as possible. If I have an asset distribution that I think is ideal to manage risk while optomizing return, I want to get to that point right away rather than drag along as some less than ideal mix. This is very much along the strategy of using DCA with your monthly investments. Rather than build up cash to buy in bulk, which will leave you heavy in cash until then, you continually purchase and keep your asset mix roughly in balance.

This is an interesting point. I guess if you consider cash as asset like any other, which needs to be in proper balance to avoid large losses due to over concentration in one asset class, then your approach is best.

I don't look at cash that way. Although over time, too much cash is indeed a drag on ones's reurns, it can't hurt you much over shorter time periods. For me, the avoidance of truly horrible timing decisions trump the need to keep to a theoretically derived asset allocation.

Also, I should say that I am after absolute returns. I really don't care if during the time that I am heavy in cash I should lag some benchmark or other. My only benchmark is the need to fund my retirement.

Ha