I suppose I am, I've heavily rebalanced at some market lows. For instance, early 2001, early 2009, early 2019, and March 2020.Something's been eating away at me...
For all the talk about staying the course, investment policies, automated rebalancing etc.. an awful lot of folks seem to adjust their desired asset allocations at "compelling market moments."
I am hypothesizing that asset allocations are adjusted more frequently in volatile markets than in calm ones. They are tweaked at perceived highs and lows more often than when markets float inside of recently established ranges. Traders and other market-timers always do this. But I am talking to the BH faithful right now. Subscribers of the staid principles of Bogleian investing.
I raise my hand as a case in point. I've considered myself to be a stone-cold dollar cost average investor for a long time. But recently I find myself reexamining this position. Over the last couple of months I've made a significant reallocation - shifting ~5% of my net worth from stocks to bonds. The impetus (I told myself) was a general assessment of my station in life: A combination of accelerated retirement plans, diminished volatility tolerance, perceived reduction in income predictability etc.. I concluded mild de-risking was prudent.
Before you, I confront myself with a disturbing possibility. All the rationalizations were a pretext for having "sold high" at a point where fear trumped greed.
Are you right now "reassessing your risk tolerance" or "reexamining your investment policy" or undertaking some Bogleian exercise all in the name of justifying what your gut demands of you.. to SELLLLL!!!? Are you a closet market-timer?
To this day I tell myself that I was just taking advantage of opportunity. I suppose that is a benefit of a balanced portfolio.
Statistics: Posted by retireIn2020 — Mon Jun 10, 2024 2:14 am — Replies 193 — Views 19147