Well assuming our Pro's in this business are correct? It maybe prudent to be buying Equities and not Bonds or Balanced Funds to take advantage of The recovery, when it does finally arrive.. I waited another Yr. after Mid 01' till that one started and it was the Longest time awaiting in my Life!...But, it was Extremely rewarding.. It was then I had Set up my own Balanced Port of Just My Best Equity ( FARIX) and Treasuries and ReBalanced it for a Recovery/Bull Market, using the Pro's telling me a Bull last an average of 3 yrs before leveling off.. The Balanced was a 30/70 and switched it to a 70/30 for this timeframe and then moved it back to 30/70..
Regardless of what was projected for 07''.
It was like playing Craps in Vegas and Quiting while your on a Nice Run, but none the less I did it.. and although didn't make that much in 07', it sure has paid off this yr..
I plan to do the same thing ( reverse the Bal. Port allocations) when I feel the time is right, gradually.. in 5% Increments after I see Large volumes in trading on the upside again.. It takes So little to move things now, it's still too volatile for my taste..
>"Simple calendar rebalancing reduces risk, but it also reduces return. Both the buy-and-hold and annually rebalanced portfolios have done well over this period, despite the fact that the cumulative gain in the S&P 500 over this entire period is 8%--i.e. less than 1% per year."
Re: I agree and found All this Rebalancing stuff every Yr wasn't worth Much more than suing my own common sense and as Charlie Munger said at a Annual Berkshire Meeting I go to every other yr..Rebalaning early on in a Bull market is Self Defeating, if you have faith in your Equities, you ought to go with them, there are plenty of Warning Signs of they slowing down and gives you time to rebalanced out of them and not loose all your gains from previous yrs.. ( At 07's meeting, WB and CM siad to expect A Down Yr for 08' and should be a good -overdue buying opportunity and that further confirmed my moving back to my 30/70 mix.)
Of course, I want to Note that I don't use All my $ in this Rebalancing game, only Extra money that I don't need. My Core Income retirement $ has been in a 30/70 port since day one... I started out in 02' with about = to 20% extra $ to play with and I do this to make More $, but not for myself, but for my Charitable Trust I want to build up. Otherwise, if I Was selfish? I'd just do like J. Boggle does and go with all of it in a 30/70 port and the heck with it.. And I suspect All this Constant Rebalancing Business is for the benefit of Feeding the Brokeage business and lining their pockets..