I’ve posted Entry #102 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called How Much Allocation Shifting Do You Have to Do to Be a Valuation-Informed Indexer?
Juicy Excerpt: The common theme to all the possibilities is that the investor is trying to keep his risk profile roughly stable at all times. There is no one right way to do that. Or, if there is, we are not today able to identify it. So we have to permit and even encourage a great deal of flexibility until we know more.
Still, we have to draw a line somewhere. If we call all allocation strategies Valuation-Informed Indexing strategies, the concept becomes meaningless. An investor who never changes his stock allocation isn’t playing the game that Valuation-Informed Indexers play. He might be a fine fellow. But he is not one of our fine fellows.