OldShooter
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
This, more or less, is why I said upthread "I am not recommending taking a mechanistically rigid bucket approach but I think it is one useful way to look at a portfolio."... Varying that allocation with buckets is market timing, trying to take more risk when markets are down and less when markets are up.
I started my journey thinking buckets were great and tried to prove it to myself using historical data. One difficulty I had was there are so many free parameters in the bucket universe - how much cash, how quickly do you draw it down, when do you start to replenish, do you replenish and if so, how fast? I couldn't find a strategy that worked better than a fixed allocation and eventually gave up. ...
If the goal is perfect timing in filling and emptying the max-liquidity bucket IMO the effort is doomed. But I think it's reasonable to expect some small optimization relative to a mechanized AA strategy. For example, in 2011 we decided we were going too build a new lake home. At that time I felt that the market was doing OK and I moved the house money from equity to very short bond/MM funds. In the ensuing couple of years there were points when making that sell decision would have been more optimum, and times when my guess was pretty good. But my main optimization was to reduce SORR risk as funds were needed and transferred into the effort. IOW I increased my first bucket size to reflect near-in cash flow needs. At the same time as that subtheme was playing, I was also watching our regular spend rate against the FI tranche, making sure I had no risk of needing to worry about SORR.
Sure, this approach has an element of market timing but every buy or sell decision includes some degree of market timing. Today or tomorrow? This equity or that?