Is now a good time to rebalance some of our assets to International?
What about moving a little more to domestic small cap equity?
The time to rebalance is when your IPS tells you to. If you don't have an IPS, I strongly advise you write one. It will keep you from asking questions such as these and acting at the wrong time.
Your holdings in international vs. US, small vs. large should be dictated by your asset allocation plan (see IPS statement above), not by your amateur assessment of market conditions.
Those who fail to plan, plan to fail.
Studies show that adding up to 40% international will reduce volatility and improve returns. The appropriate band seems to be between 20%-40%. I'll have to find the study, but in essence:
-Adding more INT to a 20% INT portfolio has a 90% chance of lowering volatility and improving return
I believe this falls to 8X% after you approach 30%. Diminishing returns and all.