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Strategies & Market Trends : Bob Brinker: Market Savant & Radio Host -- Ignore unavailable to you. Want to Upgrade?

To: Math Junkie who wrote (16586)	8/21/2002 9:08:18 PM
From: E_K_S	Read Replies (1) \| Respond to of 42834

Hi Richard - I have been a lurker for some time and wanted to know what your "rule-of-thumb" for re-allocation is? I try to rebalance my portfolio once a year or every 18 months. As a result of the huge bond move over the last three years, my bonds and cash holdings are now a lot higher than my equity holdings. Many of my treasuries that are now coming due I am holding temporarily in money market or short term GNMA's. I would typically reinvest them into new longer term treasuries or even TIPs but rates are so low in the current cycle (40 year lows), I am holding off until rates move higher. What's been Brinker's rule for rebalancing the portfolio to the set asset allocation seeing that he feels we are still in the BEAR? Is he just changing his stated asset allocation percentages, waiting for a better entry point into equities or only rebalances at set time periods? It appears that a lot of money managers did a major asset reallocation during July 2002 when (1) S&P 500 went below a set price point (I think it was S&P below 850 and (2) when the 10 and 5 year T-Bill rates fell below a certain interest rate. Past experience tells me to stay with my disciplined rebalancing period (i.e. every 12-18 months) rather than trying to time these markets. What's been your conservative approach? EKS

To: Math Junkie who wrote (16586)	8/21/2002 10:40:35 PM
From: geode00	Respond to of 42834

Well, I'll tell you it is odd. He made a point of adding another 5% to cash wayyyyyy back when from 60% to 65% and then he stopped. What does that say about his longterm model or his belief in it? He said that his longterm model could detect the top within 5%. That was just fine. However, why didn't he keep losing equities and going more to cash since mid 2000 (or whenever it was he made his last tactical reallocation)? The answer to that question would also answer his peculiar relationship with the QQQ trade and his indefinite hold on it. I don't know if he gets lucky from time to time, unlucky from time to time or he just flips a coin to see if the market is going up or down. As far as the bear goes, IMO he's simply looking backwards from where he's been frozen in time for two years. It doesn't make any sense to me that his "model" is good enough to call the top of the market but not good enough to get him out of the market over such a long period of time. I figure his call of the top in 2000 was about as lucky as his call of a bottom in 1998 was unlucky. If it wasn't luck, then his model has since broken down and he needs to take it in for repair.