The answer to THE QUESTION ASKED is enough to get to my target AA.
But I think the more important question is WHEN?
Does one blindly follow their bands?
or
Does one try to time the bottom to an extent?
I am not a fan of market timing, but I strongly feel we are solidly in falling knife times right now.
I got a call from my brother yesterday, asking for an idea how he should reinvest his cash. It turned out that late last year, he did not like how the market kept going up into the overvaluation zone, and moved quite a bit to cash. He did not say, and I did not ask how much cash he raised. I myself lowered my stock AA from 80% down to 60%.
I told him what I would be doing. That is, I will redeploy my cash slowly, and not all at once. The virus crisis is still developing. Many businesses have not known the impact to the bottom line yet, or if they do they are not admitting to it.
I thought I would wait a bit, but as I mentioned in an earlier post I did transfer 1.5% of my portfolio from cash to stock+bond yesterday. The motivation came from seeing bonds getting dumped in recent days, indicating either a cash crunch or a panic.
This virus is spreading a lot faster than the financial malaise during the Great Recession. That time, it took more than 1 year from some subprime lenders going bankrupt until the bigger banks also succumbed. Still, as you said I don't think this thing has played itself out, and more shoes will drop.
I don't have to get back to my usual 80% stock AA right at the yet unknown bottom. If I buy back at any lower price than when I sold, that's success in my book. I don't follow any doctrine, and am not religious either, let alone treating investing the same as practicing a religion.