Quote:
Originally posted by pavulon
To me, the recent market run has been impressive....any thoughts on when to pick some flowers here?
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assuming you are referring to retirement investments,
you should have a written plan that includes target asset allocation, depending on age and circumstances, a simple target might be something like 70%:30$(stocks:fixed). You then periodically re-balance. The period for re-balancing can be 1 x/ year to 12 x/ yr depending on how closely you want to follow it. The re-balancing period is another part of the written plan you have.
If it is time to re-balance say, now, then you sell some of your stocks that have done well and put the proceeds into fixed investment like bonds and cash. You sell enough to get back to your preferred asset allocation. Back in 2001 you would have been selling fixed and buying stocks.
re-balancing has the primary benefit of forcing you to sell high and buy low.
You asset allocation can be as simple as stocks;fixed to far more specific slicing of the financial markets again a more complicated allocation might be
70% stock further broken into 15% LV/20%LB/5%LG 5% MV/10%MB 5%SV/10%SB(this gives a value bias to you stock portfolio)
30%fixed further broken into 15% short int corp/15% cash
whatever allocation you use needs to be appropriate to you age and risk tolerance generally the younger you are the more risk tolerant you are the higher % of stocks.