Anyone doing Asset Allocation Rebalancing Year-end to prepare for 2020 -Bull or Bear?

[cyber888]

So, stocks are up .. Dow hits 28,000+ .. are we going for 30,000-35,000 next year .. or are equities become expensive ? Will you do a Warren Buffett .. holding a lot of cash ?? Ray Dalio preparing for a downturn too, but many of the Wall St. pundits say Dalio is wrong. Are you lowering allocation for equities ? Or are we having more of that bull market in 2020 ?

 

[Dtail]

Buy and hold for me. Staying at 55/38/7 AA.

 

[SecondCor521]

I am almost always a long term buy and hold into very low cost broadly diversified index mutual funds at a set AA regardless of what the market does.

Currently I am at 93/7 and aim to lazily move to 97/3 as pullbacks happen. Not the ideal thing to do, but it'll give me something to do during the pullbacks.

I ignore all pundits and all predictions.

 

[cooch96]

I’m still buying equities, but just enough to max my 401k and Ira. All excess money is fortifying my cash position. But that’s because I’m approaching Semi-FIRE, not because of the current market condition.

 

[Midpack]

Nope, I’m not a market timer. You can find someone credibly predicting a boom and someone else credibly predicting a bust at any time. Last time I traded on someone’s prediction was before 1990...

If you’re going to sell on every new high, you’re going to miss most highs and most of the returns. I thought new highs was a benefit of investing.

 

[53anddone]

I am 57 and will reduce stocks to 56% (from 57.8%) in January. Rest in in preferred stocks and Muni's.

 

[Henry Lili]

I am 57 and will reduce stocks to 56% (from 57.8%) in January. Rest in in preferred stocks and Muni's.

Maintaing 55% equities. If it jumps to 58% or so, may trim a bit. Usually wait for a 5% , e.g. 60%, but given the actual dollars in equities, rather then percentage, figuring I'll trim the sails a bit earlier.

 

[HadEnuff]

Right now, I'm "set it and forget it", but I'm pretty conservative at only 30% invested in equities.

I sleep well. My risk tolerance is well below what others might be, but if I avoid a huge haircut, I should be able to live comfortably at a 3% WR...so why shoot craps?

If we have a really big wipe out, like we had in '07, I'll raise my equities AA...but until then I'll stay where I am.

 

[Palmtree]

I'll admit I went a little defensive last November. I'm almost 60 years old so I went from the golden ratio of 60:40 to 50:50. Market timing? Maybe. Did I miss some gains in 2019? Absolutely. Do I care about it? Nope. Since we were at nice market highs back then (as now), I remember Warren Buffett's "Be careful when others are greedy" comment. I'd rather keep more of what I currently have than risk a good thing for even more gains that I do not anticipate needing. Now at 50:50 I'm happy if the market goes up but I'll not be panicking if there is a major correction.

 

[VanWinkle]

No change here, already have an Asset Allocation I can live with in good and bad markets.

 

[CyclingInvestor]

Staying at 100% equities. Earnings increasing nicely thru q3, looks like another good round of dividend increases coming early next year, so no reason to change.

 

[nancyfrank232]

So, stocks are up .. Dow hits 28,000+ .. are we going for 30,000-35,000 next year .. or are equities become expensive ? Will you do a Warren Buffett .. holding a lot of cash ?

We stack cash once all registered retirement accounts are maxed

Cash is useful

https://www.barrons.com/articles/what-warren-buffett-likes-about-cash-1473286224

“He thinks of cash differently than conventional investors. He thinks of cash as a call option with no expiration date, an option on every asset class, with no strike price.”

Ray Dalio preparing for a downturn too, but many of the Wall St. pundits say Dalio is wrong. Are you lowering allocation for equities ?

Warren Buffett has never brought up the term rebalancing and I’ve never actively rebalanced into a set allocation in my life. The allocation is what it is

https://www.cnbc.com/2017/05/12/war...etirement-sense-practically-all-the-time.html

“Consistently buy an S&P 500 low-cost index fund. I think it's the thing that makes the most sense practically all of the time.

“Keep buying it through thick and thin, and especially through thin. The temptation when you see bad headlines in newspapers is to say, well, maybe I should skip a year or something. Just keep buying.”

Or are we having more of that bull market in 2020 ?

Nobody knows and I don’t care

 

[audreyh1]

I’m due for rebalancing, that’s for sure. Not due to anticipation of future market events, but simply because my equities have grown so high.

 

[W2R]

My AA is 42% equities, 58% fixed. These are my written rebalancing rules:

1) Every year I rebalance during the first week in January (usually January 1-2).

2) At other times of the year, if my equity allocation is off by over 2.5% (that is, less than 39.5% or over 44.5%), then I may rebalance at that time.

Right now, my equity allocation is 44.08%, which does not satisfy 2) above. So no rebalancing right now.

 

[DrRoy]

Nope, I’m not a market timer.
If you’re going to sell on every new high, you’re going to miss most highs and most of the returns. I thought new highs was a benefit of investing.

+1.

I had been about 59% equities mid last year, although the late drop pushed it lower. After the market rise this year and arranging to pull next year's spending $ it will be 60.2%. I'm going to rebalance to 58%.

 

[OldShooter]

.. are we going for 30,000-35,000 next year .. or are equities become expensive ? ...

Yes

 

[friar1610]

A while ago I made a strategic decision to gradually increase my 45% stock allocation to 50%. But there is no deadline to effect that change. I'm waiting for a dip in prices to buy more equities. If a dip doesn't come, no big deal - a rising market should increase my equity allocation. (If we get anything like we did last Dec. again this year, that'll be the dip I'm looking for.) If market conditions are such that I never get to 50% it's really no big deal. I'm 74 and anything in the 40%-50% equity range should comfortably see me (and my spouse) to the end of our days.

 

[VanWinkle]

A while ago I made a strategic decision to gradually increase my 45% stock allocation to 50%. But there is no deadline to effect that change. I'm waiting for a dip in prices to buy more equities. If a dip doesn't come, no big deal - a rising market should increase my equity allocation. (If we get anything like we did last Dec. again this year, that'll be the dip I'm looking for.) If market conditions are such that I never get to 50% it's really no big deal. I'm 74 and anything in the 40%-50% equity range should comfortably see me (and my spouse) to the end of our days.

+1

Best wishes to you,

VW

 

[RockyMtn]

going to trim back on my equity allocation to get back in line with my prescribed AA. Will wait till after Jan 1 so don't have to worry about taxes until 2021 and so all of the sales will be long term cap gains.

 

[steelyman]

There’s still one more month to go in 2019 and who knows what might happen. But if things stay reasonably steady I’ll have little or no year-end rebalancing to do in the sense of adjusting overall stock/bond allocations.

I’m slowly (turtle’s pace) adjusting holdings between tax-free and tax-deferred retirement accounts toward having expected higher-growth (stock) funds in Roth accounts, bonds in tax-deferred. There’s no particular timeline for that.

 

[T-Minus]

Yep. Just sold about 10% of my stock holdings and invested the proceeds into my bond fund. Stocks had exceeded my 60% allocation limit, so now I’m back down to slightly below 55%. Since it was in an IRA, there was no tax hit and, since it was at Schwab, there were no transaction fees. Yay.