rebalancing my portfolio

jon3001

xyy123 wrote: »

jon3001 wrote: »

xyy123 wrote: »

be in the right asset class at the right time, not 6 different asset classes, only 1 of which can be correct.

It's well documented that professionals are rarely successful in timing entry/exit between markets.

Hence remaining true to the benchmark and deviating only when you're sure it is the right thing to do. Some investment/money managers have a documented track record of market timing, but yes, most are woeful.

So what strategy are you suggesting? 'Remain true' to the one asset or 'be in the right asset at the right time' - trying to beat the vast majority of professionals?

xyy123 wrote: »

Bear in mind the end date for the analysis was at the near-lows of the worst bear market since the Depression, having been a historically awful performance in equities for the last 10 years.

Its a lazy way of constructing a portfolio, in the name of preventing losses rather than actually making money.

If by lazy you mean concentrating on the 90% (asset allocation) that matters as far as portfolio construction goes then I'm happy with that.

The tone of your response suggests you think that equities are the only viable asset class for growth. You complain about recent bear markets (for equities) when money was being made elsewhere. And you suggest MAC investing is simply a way of preventing losses - presumably from the equity markets. Note that by Dec 2008 both the commodity markets and real estate markets had suffered along with equities.

However look at your table 3 (1991-2008) again. MAC investing returned 10.6% pa. This beat Global Equities (7.4%), Global Real Estate (9.1%) [property beating equities again] and Commodities (5.1%). In other words it introduced growth above its consistuent assets. This is the power of using uncorrelated assets. As a bonus it did so with less volatility. More growth; less risk.

If you wish to see MAC performance over other time periods then take a look at Roger Gibson's book.

FinancialindependentIN6

That said I have to pots when it comes to Equites.
One, blue chip companies that pay a high yield and two, a prop trading pot that I look for companies that will rise 10% in the next month or so. Clearly this does not always work out but have made over 20% already this year in the later.