Today was an amazing day in the market, kinda. It closed just about 10,000 for the second day in a row. It convinced me that there are several investors out there waiting for the market to fall below 10,000 to buy. For the record, I am one of them. The last time I bought in was around June 29th when the market spent a couple days south of 10,000, but since that time, it has been as resistant to 9,999 as negatives are to each other.
Fortunately, my primary focus is on my overall asset allocation so I don't have to time the market quite as intently as others (I'll still pick up a good deal when it presents itself, however). As I have explained in the past, and I'll be quoting myself from a prior blog often here, if you spend all your time timing the market, then you aren't making money in the market: you're earning money through a second job. And personally, I don't even work hard enough at my day job to take on a second.
However, I am also very disciplined -- hence the reason this blog is dated in August instead of September. On the tenth of every third month (February, May, August, and November), I review my account and I will rebalance it to a set asset allocation that I feel is comfortable for me. If I change my asset allocation, I usually do it six months out and then work my way slowly into the new balance. This month, I was a week late on getting to my rebalance (which wasn't surprising since it was a hellacious week!) but lucky for me, it was a simple shift because it barely takes me five minutes to do this anymore since I already know my target and my current allocations match those percentages. I just shift my real allocations to match the current allocations.
Fund # - Real / Current / Target
Fund 29 - 5% / 5% / 5%
Fund 84 - 10% / 10% / 10%
Fund 24 - 26% / 26% / 25%
Fund 113 - 9% / 9% / 10%
Fund 85 - 50% / 50% / 50%
Done, no further action was necessary. I plan to revisit my allocations when I have more opportunity to research and consider alternatives, at which time I could change my target allocations and then work on getting my current allocations to reflect the target, but the displine of revisiting investments once a year or once a quarter is the critical piece of a successful asset allocation.
It's easier than watching the markets like a hawk, and cheaper than paying someone else to do so.
DISCLAIMER: I am neither licensed nor permitted to give specific financial advice, so if you want investment recommendations, then please consult with a financial advisor or reputable financial sources; my favorite website is CNNFN.com and my favorite radio station is KFNN 1510 AM "Radio That Makes You Money." The investment decisions presented above were tailored to my risk tolerance and my financial goals.
