VII #99 — Gradual Allocation Shifts Make the Most Sense

I’ve posted Entry #99 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called Gradual Allocation Shifts Make the Most Sense.

Juicy Excerpt: If you shift to a 70 percent stock allocation when the P/E10 level reached 18, and then to a 60 percent stock allocation when the P/E10 level reached 20, and then to a 50 percent stock allocation when the P/E10 level reached 22, and then to a 40 percent stock allocation when the P/E10 level reached 24, and then to a 30 percent stock allocation when the P/E10 level reaches 26, you avoid the drama of going from an 80 percent stock allocation to a 30 percent stock allocation all at once. It’s generally a good idea from an emotional standpoint to limit the drama of the stock investing project to the greatest extent possible.

Comments

  1. Evidence Based Investing says

    I’ve posted Entry #99 to my weekly Valuation-Informed Indexing column at the Value Walk site.

    It would be slightly more accurate to state “I posted Entry #99 to my weekly Valuation-Informed Indexing column at the Value Walk site over two months ago.”

  2. Rob says

    It would be more precise to say it that way.

    But your suggestion is that the day the post was made is of significance. How so?

    All of the information in the post remains valid and is of the highest possible importance.

    My announcement of the post was delayed because I was writing about the Wade Pfau matter, which I think can fairly be characterized as the most important story in the personal finance field in many decades.

    You are right in the point you make here, Evidence. But your focus is wildly off. You should be focusing on the critically important content of the post, not on the day on which I announced the posting of it at this blog.

    I wish you the best in all your future endeavors in any event, my long-time Goon friend.

    Rob

  3. Rob says

    Stocks offer a very strong long-term value proposition when they are selling at prices close to fair value, Trebor. So I would certainly consider buying stocks once the P/E10 value drops to 15 or so.

    Then I would increase my allocation as prices continued to drop.

    Rob

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