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NW-Bound 07-28-2008 09:40 AM


Originally Posted by ESRBob (Post 689620)
Did I stumble onto a forum of day traders? Better check my cookies.

In an ealier post somewhere, Nords said either in jest or sarcastically that some of us are just rebalancing - daily. :)

Another poster has also pointed out that rebalancing to maintain a chosen asset allocation is also market timing; one just does not want to call the market high or low, and just mechanically follows the market - with a delay. Some of us are just trying to be a bit coincidental. :)

I usually keep around 30% in liquid MM and I-bonds, and earlier in the year, raised it to 50% when I got out of some poorly performing stocks. I have quite a collection of stocks, because I fancy being my own mutual fund manager. I still have a lot less than Wellington, which as I recall, has greater than 300 holdings. My turnover rate is probably even lower than most MFs, Wellington included.

Well, instead of immediately buying something else with the cash I raised, I decided to wait a bit to see what is good, and have been DCA'ing into the market. Now, I may get called "market timer".;D

ESRBob 07-28-2008 10:48 AM

You're right about rebalancing being a stealth form of timing. I used to rebalance religiously in January every year. Then I started thinking January wasn't the best time of year since so many institutions were doing their own rebalancing then, and about the same time I found the research that suggests rebalancing every 2-3 years gives a little better 'run' on trends, and is more tax-advantaged, too.

So it's been 2+ years since I rebalanced, and I confess it was all the articles yapping about Bear Market and 20% off highs a couple weeks ago that made me feel, "Oh yeah, I really have to get to that rebalancing chore (which I knew would mean buying more stocks)-- how about Today".

So I guess I am as much a timer as anyone -- I just only do it every few years now.

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