I understand the default recommendation from many will likely be, “Why wait, switch to your desired AA immediately, anything else is market timing or a bet you know more than the market.” However, pretend one did not care if it was market timing. If one is 100% US TSM and they decide that it may be wise to start adding international, but still feel the US is poised to outperform for a bit, so they are in no rush to immediately switch to their desired split (global market cap weight) and instead adjust all new contributions to be 60/40 US/Intl? Anything wrong with that? Current portfolio is about 205k, putting 40-45k a year in (inclusive of matches). Plan is to just switch new contributions to 60/40 US/Intl moving forward so basically year 1 would get to 95/5 US/Intl, year 2 would be 90/10 and by year 4 or 5 would hopefully be up to 60/40. That way, still taking advantage of current US outperformance, still adding intl for diversification and within a few years will be at new desired AA. I do not really see any way this could go wrong other than if intl outperforms US drastically during this time, but I would still have exposure the whole way. Plus, if the mean reversion happens and intl has its day in the sun, it would not just be for one year it would likely be a 10 year or more period like we have seen in the past, so “missing the boat” would not be in play.
Statistics: Posted by BizarroJerry — Sat Sep 07, 2024 1:05 pm — Replies 10 — Views 351