Author Topic: Asset allocation in my Personal investment Policy  (Read 648 times)

BlueHouse

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Asset allocation in my Personal investment Policy
« on: January 23, 2020, 12:05:40 PM »
I've been reviewing my numbers A LOT lately due to the end of year final tallies, and I'm also nearing another big threshold.  My personal investment policy has my objectives and asset allocations recorded by my age (for instance, in 2020, I plan to reduce my target allocations from Intl Stocks and increase US Bonds). And I have different asset allocations for 2025 and 2029.  I chose these dates a few years ago thinking they would coincide with my age at certain milestones. 

Now I'm thinking I might want to change my target allocations based on how much I have total invested?  (and as I get closer to FIRE).  Does this make sense or does it counteract the whole idea of rebalancing without respect to market performance? 

What are your triggers for rebalancing and specifically for changing your future target allocations?  Time? Age? Date?  or value of account?


terran

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Re: Asset allocation in my Personal investment Policy
« Reply #1 on: January 23, 2020, 12:15:00 PM »
I don't think age or total balance* is a factor. What really matters is where you are in your journey. From your posts in other threads it seems like you might be approaching FIRE. In that case it might be time to start building up bonds to mitigate sequence of return risk. Consider https://earlyretirementnow.com/2017/09/13/the-ultimate-guide-to-safe-withdrawal-rates-part-19-equity-glidepaths/

*Total balance might play role in the sense that if you have far more than you need, then you can either go very conservative if that makes you more comfortable (because you don't need the growth to succeed), or more aggressive if you figure you can always find something to do with more (because you can afford to take the risk).