I've a question re: rebalancing, Jonathan. You talked about selling stocks when they soar to get back to your particular asset allocation. Right now stocks have been doing better than they've been for about a year. But bonds, while sort of recovering now, didn't really act as much of a buffer as they tend to do normally--what with all the interest rate hikes, they've gone down quite a bit (over 10%). Presumably, for instance many intermediate-term bonds will take a while to recover, though the new ones the fund adds will pay higher rates. Ordinarily it's more like a seesaw with either bonds or stocks going up while the other goes down. It didn't really work that way for the last year or so. With most of my assets in retirement funds, I ordinarily have 70/30 stock-bond allocation goal with +/- high/low bands and right now it's about 75/25 (which when it went to 76/24 I sold back to 75/25). I'm a little hesitant about selling stocks now since, while they are doing better, they still are about 10% or so off where they were over a year ago as well. Perhaps should I just incrementally over a few months sell off 1-2% stocks into bonds? It's not like selling a clear winner into an underperformer, which is the more usual way of rebalancing. Thanks.
I wrote this as part of a review of your "Little Book of Main Street Money" which I bought for my nephew out of college: "I always considered Jonathan Clements to be something of an oasis in the "Wall Street Journal" desert, in that amongst all the advertisements and columns of different people wanting to encourage you to trade or buy their funds or stocks or financial advice for (unadvertised) large fees, Jonathan was there telling you to watch out and buy low-cost index funds and if you wanted financial advice to engage someone on an as-needed basis for an hour or so, rather than allow someone to suck up 1% or more of your account's balance (a much bigger bite!) on a yearly basis. I was always rather surprised WSJ kept him for almost 20 years, since his advice was almost counter to all the "get everything you can out of the consumer" stuff the rest of the paper was espousing. But his advice was so good, someone with a conscience and sympathy for the average investor among the editors there kept him fortunately. I commend Jonathan's work in this book and still follow him on his humbledollar.com website to this day."
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I've a question re: rebalancing, Jonathan. You talked about selling stocks when they soar to get back to your particular asset allocation. Right now stocks have been doing better than they've been for about a year. But bonds, while sort of recovering now, didn't really act as much of a buffer as they tend to do normally--what with all the interest rate hikes, they've gone down quite a bit (over 10%). Presumably, for instance many intermediate-term bonds will take a while to recover, though the new ones the fund adds will pay higher rates. Ordinarily it's more like a seesaw with either bonds or stocks going up while the other goes down. It didn't really work that way for the last year or so. With most of my assets in retirement funds, I ordinarily have 70/30 stock-bond allocation goal with +/- high/low bands and right now it's about 75/25 (which when it went to 76/24 I sold back to 75/25). I'm a little hesitant about selling stocks now since, while they are doing better, they still are about 10% or so off where they were over a year ago as well. Perhaps should I just incrementally over a few months sell off 1-2% stocks into bonds? It's not like selling a clear winner into an underperformer, which is the more usual way of rebalancing. Thanks.
Post: Looking Up and Down
Link to comment from July 15, 2023
I wrote this as part of a review of your "Little Book of Main Street Money" which I bought for my nephew out of college: "I always considered Jonathan Clements to be something of an oasis in the "Wall Street Journal" desert, in that amongst all the advertisements and columns of different people wanting to encourage you to trade or buy their funds or stocks or financial advice for (unadvertised) large fees, Jonathan was there telling you to watch out and buy low-cost index funds and if you wanted financial advice to engage someone on an as-needed basis for an hour or so, rather than allow someone to suck up 1% or more of your account's balance (a much bigger bite!) on a yearly basis. I was always rather surprised WSJ kept him for almost 20 years, since his advice was almost counter to all the "get everything you can out of the consumer" stuff the rest of the paper was espousing. But his advice was so good, someone with a conscience and sympathy for the average investor among the editors there kept him fortunately. I commend Jonathan's work in this book and still follow him on his humbledollar.com website to this day."
Post: News You Can’t Use
Link to comment from October 29, 2022