Rebalancing? I think Its a Very Tough call...
1. If you Rebalanced ouot of bonds and into your equites in 00 & 01'? You lost $
2. Rebalanced in end of 02', did good in 03'
3. Rebalanced and took profits out of Equites in end of 03' and back into Bonds? and did this thru and including 06'? You lost out on big gains.. and measly Bond rtns.
4. I didn't rebalanced Since 99' and not until 2007' Only Because? making a Est. 6-7% on Bonds was going to be Far more or Double what I needed out of my $, so why take on more risk, especially with a Iffy market in late 07' for the future?
5. But, My Bonds made over 17% in 08' ( Mostly Trasuries ) so going into 09' with about a 20/80 port..
6. I did take Alot of the profits out of the treasuries and put them in GNMA, TIPS and Some Corporates.
7. But if they do even 6-7%? I don't need to take the added risk moving that $ into equites, even if the equites do 50%? So why bother..?
8. . Not sure about adding to my Equities for this yr.. about 20% is in them and if they double? Great, if they don't, not a big deal for me..
So, I think it just All Depends on what you need, not what you want that has to come first..
and If you, like me? I Have about 80% of my $ in Conservative Balanced Funds? I Just add to them and let them do the Job for me and it takes out the X factor that Screwer's my Portfolio? Me!..LOL
I Do think and saw in the last Bear, alot sold some in Bear rallies and then sold the rest of their Equities once a Recovery and Bull came in 03' and thus slowed down the Bull market for 04' for awhile. Probaly alot of Seniors that were stuck in Equites and had Enough and got out and have stayed out ever since.. Not a Wise move, but none the less.. and this time around?
That May just happen again..
I also think far to many Retired people have far too much in equities and your port should be based soley on the Bonds APY's, not the Equites, and I don't care if they are in stocks with High Ylds and Divs..try selling those stocks today and your lost alot of $ and Divs will Change ( like GE's) just give them alittle time..they can't afford to pay such HYlds and Divs..while their stock goes Bust..( We just settled a Aunts estate, she had alot of stocks with Nice Divs and Ylds, only problem? We had to sell them Now and it lost alot and all those Divs and Ylds paid where chump change vs what she Lost on the stock Prices vs her Cost Basis ) Apparently alot think they will just Hold them forever and live forever I guess..or the stocks will be worth more..
And another mistake is? Regardless of how old you are, if you want to retire at age 50? I think
You should have a 65 yr old's Balance, like a 35/65 and not a 50 yr olds 50/50 or 40/60 and if a 35/65 won't give you enough Income? Guess what? You can't retire yet.. that is were alot burned themselves..this time around.. they got suckered into beleiving equites is the way to go, but all those pro's that advocate it? Make their $ from you who do it! Most of their $ is in Bonds! LOL
This is One subject Jack Boggle & others doesn't discuss very much and it should be for Early Retiree's...
Hopefully You will recover enough and you will be given a 2nd chance to Do so accordingly..
Of course, what did you expect for nottin..