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Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: MythMan who wrote (377175)	10/28/2008 10:50:28 PM
From: Secret_Agent_Man	Read Replies (1) \| Respond to of 436258

now that he has his hat, think they'll show him out the door-lol

To: MythMan who wrote (377175)	10/29/2008 10:28:11 AM
From: Trumptown	1 Recommendation Read Replies (1) \| Respond to of 436258

you buy this?... "Gut wrenching declines in US and global equity markets during October coupled with bond market outperformance will undoubtedly require MASSIVE monthly asset rebalancing by US pension funds –- rotating OUT of bonds and INTO stocks. This may have a profound “short-term” impact on performance of risk assets since the required rebalancing appears to eclipse even the large rotation after the 1987 stock market crash. As a very simple example, we asked our quant colleague (xxx) to analyze a balanced portfolio targeting 40% domestic bonds (SBBIG Index) and 60% equities. We assumed that the equity portion is comprised of 75% domestic stocks (MXUS Index) and 25% EAFE international equities (MXEA Index). The attached rebalancing calculations based on closing levels last Friday (Oct 24) suggest that US pension funds would need to reduce bond holdings by a WHOPPING -4.1% while increasing equity allocations by a corresponding +4.1%, all by the close of business at month-end on Halloween Friday (Oct 31). Price action could be bloody scary given terrifying poor liquidity in these markets. For historical perspective, the second largest monthly bond-stock rebalancing rotation was 3.4% in October 1987. Most importantly, US equities did manage to stage a +10.5% during the last four trading days of October 1987 while bonds struggled. As it turns out, that marked the bottom for US equities for the next month and probably helped stocks find some needed footing in 1987." evilspeculator.com