During 2008-2009, we had like $750,000 at the top (66/33 - $500,000 stocks/$250,000 bonds)
I rebalanced twice on the way down, $25,000 each time, but I decided to stop with a floor of $200,000 in "safe" money.
It just made it easier not to panic and sell stocks scared. A $200,000 floor, I knew no matter what, my family would be fed, housed, and dry for multiple years even if we lost our jobs.
Now, I stopped rebalancing pretty early, but I never thought about selling. (Thanks Bogleheads! Check my join date).
AND, I had ZERO problems investing NEW money. That was EASY. All our 401k contributions were 100% stock, because I felt like we were buying cheap (and we were). My wife got a decent bonus that year, and we put it all 100% in Total Stock Market Index, and it was easy.
Money that I knew we wouldn't need for 10-20 years, it was easy to invest in stocks.
The $200,000 that we MIGHT need next month and next year, I didn't want to move into stocks. That's the difference.
Now sure, if I had kept rebalancing all the way down, we'd be richer today, but at the time, I was covering for all scenarios, not just the one that actually happened. That is what risk management is all about.
I rebalanced twice on the way down, $25,000 each time, but I decided to stop with a floor of $200,000 in "safe" money.
It just made it easier not to panic and sell stocks scared. A $200,000 floor, I knew no matter what, my family would be fed, housed, and dry for multiple years even if we lost our jobs.
Now, I stopped rebalancing pretty early, but I never thought about selling. (Thanks Bogleheads! Check my join date).
AND, I had ZERO problems investing NEW money. That was EASY. All our 401k contributions were 100% stock, because I felt like we were buying cheap (and we were). My wife got a decent bonus that year, and we put it all 100% in Total Stock Market Index, and it was easy.
Money that I knew we wouldn't need for 10-20 years, it was easy to invest in stocks.
The $200,000 that we MIGHT need next month and next year, I didn't want to move into stocks. That's the difference.
Now sure, if I had kept rebalancing all the way down, we'd be richer today, but at the time, I was covering for all scenarios, not just the one that actually happened. That is what risk management is all about.
Statistics: Posted by HomerJ — Tue Nov 11, 2025 10:58 pm — Replies 101 — Views 9358