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Stocks Rally Because You Can’t Sell Off With Earnings This Good
FYI: All three major stock indexes marched higher on Tuesday after a disappointing start to the week. Earnings helped, putting the Dow on pace for its best day in two months.
For me, since I am in the process of trimming my equity allocation due to an aged base portfolio rebalance I feel it makes good sense to trim equites in a bull market run over trimming in a stock market sell off. But, in the end I guess it also depends on one's perspective, needs and desires. It is for certain there will be more buyers in a bull market run over sellers. However, I remain in a trim equity mode. Why not let the equity run, in a sense, fund my movement to fixed income through equity market expansion? Thus, it is a sell down in equities, while they are in an upward trend movement, with proceeds to fixed income. In this way, the equity run is funding my fixed income expansion.
For me, since I am in the process of trimming my equity allocation due to an aged base portfolio rebalance I feel it makes good sense to trim equites in a bull market run over trimming in a stock market sell off.
Makes sense to me - although I’d be only guessing at your age. As you add, a lot depends on other factors. I’ve recently reached the same conclusion. Went to a static allocation with quarterly rebalancing if necessary. This is different from the past couple decades where I bought and sold the equity end based on perceived market valuation. Being already on the high side in terms of cash and other alternatives made the move easier.
I know of at least one other on the board who reached a similar (age related) decision this year. Times have been good for investors (to put it mildly). So if you’re considering scaling back on risk due to advancing age, seems like a pretty good time.
Hi @hank: My current simple target asset allocation is 15% cash, 35% fixed income & 50% equity. I am in the process of moving towards 20% cash, 40% fixed income and 40% equity. I'm thinking that this asset allocation would be good for me going forward. I'm also thinking it best to do this over a period of time and at a pace of about 1% equity reduction per quarter.
Hi @hank: My current simple target asset allocation is 15% cash, 35% fixed income & 50% equity. I am in the process of moving towards 20% cash, 40% fixed income and 40% equity. I'm thinking that this asset allocation would be good for me going forward. I'm also thinking it best to do this over a period of time and at a pace of about 1% equity reduction per quarter.
Thanks Old_Skeet
I’m comfortable at 40% Balanced, 15% Cash Equivalents, 15% Spectrum Income, 15% in two Alternative funds, 7.5% International Bonds (including EM) and 7.5% Real Assets
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I know of at least one other on the board who reached a similar (age related) decision this year. Times have been good for investors (to put it mildly). So if you’re considering scaling back on risk due to advancing age, seems like a pretty good time.
I’m comfortable at 40% Balanced, 15% Cash Equivalents, 15% Spectrum Income, 15% in two Alternative funds, 7.5% International Bonds (including EM) and 7.5% Real Assets
Last time I checked that added up to 100%.