Post #657 by elann on the Mechanical Investing board

Investment Strategies / Mechanical Investing

Unthreaded | Threaded | Whole Thread (43)

Post New | Post Reply | Report Post | Recommend It!

No. of Recommendations: 10

I don't have a written plan yet. I have to think of something that I can emotionally stomach. Maybe for every 10% decline, you would go add 1% to stocks, and be at 71/29.

That's not a great bet on stocks, but when the world looks like it is going to end, it is very hard to place a huge bet on stocks.

If you start at 70/30 and stocks drop by 10% while bonds hold steady, then you're at about 67.7% stocks and 32.3% bonds. Getting to a 71/29 balance at that point requires that you add much more than 1% to your stock position.
You'd probably do okay just to rebalance back to 70/30 periodically - once per quarter or once a year.

Elan

Post New | Post Reply | Report Post | Recommend It!

Print the post

Unthreaded | Threaded | Whole Thread (43)

Prev | Next

Announcements

Mechanical Investing FAQ

Contact Shrewd'm
Contact the developer of these message boards.

A community forum supporting civilized, and highly helpful, self-educating investors that come together for Shrewdness and merry spirits. These message boards closely follow the look and feel of the old message boards at boards.fool.com prior to the boards redirected to discussion.fool.com. Shrewd'm is not affiliated with the comprehensive and excellent investment website, The Motley Fool (TMF), in any way. The Shrewd commmunity here has owed, and continues to owe, gratitude to The Motley Fool for nurturing a culture of jovial irreverence towards Wall St, and that tradition will continue here.