Post #661 by Mark19 on the Mechanical Investing board

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Investment Strategies / Mechanical Investing

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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.

I understand the math. I think we both have stem degrees. I think you're cs, and I am ee. My theory is based on the idea, that the more you buy when it looks like the world is going to end, the more you can make. At the same time, you have to sleep at night. That is why my strategy is one of over rebalancing, but not so much that I will lose sleep.

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