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Rebalanced our portfolio - what's your AA?

March 9th, 2018 at 04:50 pm

Thanks to the long-running bull market, our asset allocation had gotten more stock-heavy than I wanted it to be. At the end of 2017, we were 81% stock, 14% bond, 5% cash. Although I am by no means a market timer, I'm also a realist and understand that the bull market is going to end one of these days, probably sooner rather than later. I've always been very aggressive with our portfolio but we're now both in our early to mid 50s and have fewer years ahead of us to recover from any major drop. It was time to start dialing back the risk level to help protect our assets and buffer the impact of a future bear market whenever it may happen.

I decided to work towards getting the stock allocation down around 70%. I made a couple of moves early in the year, shifting 20K from stocks to bonds. Then there was that quick correction where the Dow dropped a couple thousand points. I was concerned that I may have missed my opportunity but fortunately the recovery was just as quick as the correction. Before the market had a chance to tank again, I moved the rest of the money needed to get to that new target allocation, about 100K.

So as of now, we are at 70% stock, 26% bond, 4% cash. I think that will give better downside protection when the bear shows up while still giving plenty of exposure to the upside as do still have many years ahead of us hopefully and need to have continued growth in our portfolio.

What is your asset allocation? How often do you rebalance?

6 Responses to “Rebalanced our portfolio - what's your AA?”

  1. Bluebird Says:

    We have half of our stuff with our financial advisor at Morgan Stanley and the other half we have at Vanguard and elsewhere. Our financial advisor reviews all of our retirement funds annually around Spring, so we might make adjustments. I'm 48 and DH is 43, so we're heavily into stocks right now. Good job!

  2. PatientSaver Says:

    I check my allocation on a monthly basis when I do my investment reports but I don't re-balance until it's at least 5 percentage points out of whack.

    I'm about 5 years older than you and am only working p/t now, so I've reduced my stock weighting more. Currently I'm at 45% stock, 45% bonds and 10% cash.

  3. Dido Says:

    I'm a year younger than PS, 4 years older than you. I'm hoping to be able to work for at least a decade more, ideally another 12.5 years. Currently at 68% equities, 32% cash & fixed income.

    When I hit 60, I'll dial the risk back more, but I've 2.5 years until then.

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