Hey, I was dragging my feet and the weekend got in the way, sorry for the long delays
Its not any ultimate allocation, although I think its a good idea for the 3-5-7 year term and I think value is a good idea for very long (15-20 year) terms. The value premium is still in effect. You get the dividends even if the underlying stock goes nowhere.
I ended up with 3 years cash plus the wifes income that pays the bills and then some. And thats with her having cut from 5 to 2 days a week. We may even drop her from 8 days a month to 6 or 7, but so far her conversion to day shift has been pleasant...she really likes it for many of the reasons why she avoided it up until now. Just goes to show you, sometimes you end up liking what you fear.
Tell me more about the question on reconsideration and 40%...what exactly are you looking for...what would make me buy more of xx if the price went down 40%? If it went up 40% would I keep it? Not sure what the question is!
Bearing in mind the wife wants to work 7 years at least, and honestly has no hard stop on it. Likes the job, likes the people, makes good $ and the health care is pretty nice. Working just two days a week in a row isnt too rough. Even if she does stop at 7, we dont have to tap the port until year 10 due to the cash buffer. If we had a huge run-up, I might be tempted to take some money off the table.
Once we get to that point and we're living off the portfolio again, with no earned income, I have to say that I'd be tempted to slide right back into the old wellesley/wellington buckets I just crawled out of. Only reason why I did this is to drop the bond income and its associated taxes and shoot for higher medium term returns while I can take the volatility.