Quote:
Originally Posted by Broken Arrow
Well, the usual caveat here is that you can't time the market.
However, I think it's perfectly fine to "rebalance" your portfolio to match your true risk tolerance. In which case, feel free to convert more stocks into bonds, but once that's figured out, I would recommend to stick to it.
In my own asset allocation, I've mostly stuck to a passive, diversified mutual funds. I know I've spent a lot of time talking about trying to time the market, but I only attempt to trade with a small portion of my money.
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There is so much truth to this post, it deserved a special reply.
I look at my money in many ways
... short term money in the bank savings...
... the money I need to pay my bills this month and next month...
... the money I already have invested...
and my big one "new money I will invest this month and next month and this year and next year...
Most of you know I have a good chunk of change invested for retirement already, and best hope is I can retire at 53 and never work again (work is a 4 letter word to me).
90%+ of my money invested follows the asset allocation advice I blogged about and that you can read on most financial web sites...
but new money is something different. Most new money goes to the 90% above... if we invest 20k per year (might be 24k) all but 5k per year goes to normal asset allocation. But we put 5k (wife's Roth) into the momentum like BA mentioned as well.
1-2 times per year I adjust what the new money in the Roth goes to. For later 2008 and most of 2009 it was financial stocks and real estate. Now its health care and real estate. Trying to "buy low" to get a better IRR than just dollar cost averaging into large caps, small caps, foreign funds etc...