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Small post Xmas new yr crash... Is it another small hump before the real large crash - 35%s bound to happen Anyone jumping largely to cash + govt bonds beside Ted and skeet.. Bailing out?!
I'm normally 80-20 stocks but over the last 18 months have been cutting back slowly to now about 55-45. About 20% is cash now. Don't know if it will pay off, but I'm at a point in my life that it is better to keep what I already have than to build it all over again.
@johnN: FWIW ... I have not bailed from the markets nor have I jumped largely to cash.
Old_Skeet has raised some cash ... but, I have not bailed. I'm still with my "all weather" asset allocation of 20% cash, 40% income and 40% equity. Now being in my early 70's I felt it wise to increase my cash and income areas by about 5% each and throttle back my equity area by about 10%. This put me at 20/40/40. Within equities I'm tilted towards value.
With the strong upward run stocks have lately had has skewed my asset allocation and put me a little equity heavy. To solve this, I'm simply putting new money to work in my cash and income areas while I'm letting equities build.
At the end of the first quarter I may decided to rebalance if warranted. My rebalance threshold is + (or -) 2% from my target allocation for both my income and equity areas while I generally let cash float. With this, I could be up to 42% income and 42% equity and at 16% cash and not rebalance. Going the other way, I could be 38% income and 38% equity and 24% cash (or somewhere in between) and not rebalance being inside the upper and lower limits of my gardrails. Thus my asset allocation along with my gardrail stops has become part of my risk management tool kit while allowing for some asset valuation movement without triggering a portfolio rebalance.
I tend to trail my bogey (TRRIX) during up markets and then lead it on the way down. So it’s nice to be out in front at this stage. Difference this year is the 10% allocation to real assets. Most everything in there is up double-digit. Notable: energy, gold, real estate. @JohnN - I’m done jumping. Just ride the baby.
“How Sweet it Is” - From the 1963 Flick - Papa’s Delicate Condition
johnN, most dramatic crashes are preceded by some form of exuberance. I'm thinking of the dotcom, housing and others. These periods were noteworthy for the seemingly mindless investments from those desperate to get into the market. I'm not seeing that right now. I've been looking for a report which would indicate the amount of cash sitting on the sideline (haven't found it). So far, I've made no changes to my allocation and I've been rewarded, so far.
Comments
Old_Skeet has raised some cash ... but, I have not bailed. I'm still with my "all weather" asset allocation of 20% cash, 40% income and 40% equity. Now being in my early 70's I felt it wise to increase my cash and income areas by about 5% each and throttle back my equity area by about 10%. This put me at 20/40/40. Within equities I'm tilted towards value.
With the strong upward run stocks have lately had has skewed my asset allocation and put me a little equity heavy. To solve this, I'm simply putting new money to work in my cash and income areas while I'm letting equities build.
At the end of the first quarter I may decided to rebalance if warranted. My rebalance threshold is + (or -) 2% from my target allocation for both my income and equity areas while I generally let cash float. With this, I could be up to 42% income and 42% equity and at 16% cash and not rebalance. Going the other way, I could be 38% income and 38% equity and 24% cash (or somewhere in between) and not rebalance being inside the upper and lower limits of my gardrails. Thus my asset allocation along with my gardrail stops has become part of my risk management tool kit while allowing for some asset valuation movement without triggering a portfolio rebalance.
“How Sweet it Is” - From the 1963 Flick - Papa’s Delicate Condition