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The U.S. equity mutual funds market witnessed the largest weekly sell-off between Dec 5 and 12, with investors redeeming $46 billion amid macroeconomic fears, per a report by Lipper. The data comes at a time when an ongoing stock market sell-off has pushed the broader S&P 500 index into correction
I guess that would be % - wise Derf. Most anything with risk exposure will fall in both dollar terms and percentage terms during a bad market. At the same time, cash and bonds will normally increase as a percentage of your assets. At last look, my normal 38-42% allocation to equity weighted funds (mostly balanced funds) had slipped from 39.5% mid-summer to 38.5%.
Haven’t checked recently because of all the distributions - and being otherwise occupied. Suspect that when the dust settles (distribution season ends) the equity loaded portion will come in a bit under 38%. That’s where my pre-sets would mandate rebalancing back to 40%. Should that portion fail to fall below 38% no rebalance would occur. Other portfolio areas with risk exposure (in particular real-assets) have also experienced losses the past couple months and might be due for a rebalance.
My thinking for a couple years has been that equity valuations had “over-reached” and couldn’t be sustained at those levels. IMHO a steady measured approach (neither rushing in nor rushing out) is a good way to go. I’m off between 3 and 4% YTD. If you’re willing to expose your money to the markets in pursuit of better long-term returns (and inflation protection), that’s a very small loss ... “Ay, ay, a scratch, a scratch.”
Comments
(As noted previously, am in process of moving some funds from one house to another - but the allocation to equities won’t change)
Derf
No selling here ... if anything, I'm slowly nibbling and buying.....
... but nothing grabs headlines like photos of shocked floor traders and panicked headlines about market volatility, right?
Haven’t checked recently because of all the distributions - and being otherwise occupied. Suspect that when the dust settles (distribution season ends) the equity loaded portion will come in a bit under 38%. That’s where my pre-sets would mandate rebalancing back to 40%. Should that portion fail to fall below 38% no rebalance would occur. Other portfolio areas with risk exposure (in particular real-assets) have also experienced losses the past couple months and might be due for a rebalance.
My thinking for a couple years has been that equity valuations had “over-reached” and couldn’t be sustained at those levels. IMHO a steady measured approach (neither rushing in nor rushing out) is a good way to go. I’m off between 3 and 4% YTD. If you’re willing to expose your money to the markets in pursuit of better long-term returns (and inflation protection), that’s a very small loss ... “Ay, ay, a scratch, a scratch.”