as for the true question: yes, a temporary _small_ change in asset allocation in case of equity crash is desirable. in my ISP I noted some flexibility in the 'desired allocation' just so I don't panic too much if I target 80-20 and I am for brief moments in time 85-15 or 75-25. clearly the point is that the change in asset allocation is not big (remember: in theory stocks are down and bonds are stable or up, so you sell bonds from a position in which your asset allocation is less aggressive) and is temporary.You have to consider this in two steps. First, during the drawdown fund will sell bonds and buy equities. Second, you will sell part of the portfolio (both bonds & equities).I avoid lifestrategy funds because I would hate to have a lifestrategy fund in drawdown phase, because I would sell equity and bonds at the same time, and if equity crashes, then that's NOT what I want.
Implicitly the true question is…do you want to change your asset allocation to more aggressive during drawdowns. If not LS is perfectly ok.
With that said, this is a good question, perhaps worth a new thread.
Statistics: Posted by jg12345 — Sat Nov 23, 2024 6:22 am — Replies 7 — Views 649