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Anticipating what my guess is for what Dave will says w/r/t the "reserve account", I want to outline the thought process you have to go through to figure out how to implement a reserve account method. It's a lot more complex than it seems at first blush.

Lets say the account is $90K, with $60K in stock (S&P500) and $30K in cash, for a target asset allocation (AA) of 67/33 -- 67% stocks and 33% cash. You are wanting to protect this account against a 50% (45K) drop.

So, say stocks crash and a $45K loss occurs. The account is $15K & $30K.

Now what? The actual AA is now 33/67 but the target AA is 67/33.

Does the past make a difference?
If you went into a coma with 67/33 and woke up with 33/67, would you care? Does it matter? WOuld you do anything about it?
If not, then to you there is no meaningful difference between 67/33 and 33/67. Why did you set your target to 67/33 in the first place, since 33/67 is perfectly acceptable?

If it *does* make a difference, if 33/67 is *not* okay, then how long are you going to let it stay at the unacceptable 33/67?

Are you going to shift money around to get right back to 67/33?
If so, then you are right back to where you started, except with $45K -- $45K in stocks and $15K in cash, 67/33 AA.
Well then, what was the whole point of setting up a cash fund and sequestering the losses to the stock fund?

Of course, you are not going to shift money to get back to 67/33. Given your stated goal, that would be silly.

You are going to let it sit at 33/67 -- or 20/80 -- or 10/90 -- or wherever it goes, while the cash stays steady at $30K. Therefore you *didn't* really have a target AA of 67/33. You had a target amount in mind for cash -- one-third of your initial balance or $30K. I'm assuming that there is a one-way rachet, that your target cash balance is 1/3 of the high-water mark value of the entire portfolio, stocks + cash.

So, your AA isn't a target number, it's a range. The AA is allowed to float anywhere from 0/100 to 67/33.

But the reason for having *any* money in stocks is to capture the stock gains. Cash doesn't grow; all the growth comes from stocks. But when you have a very low stock allocation, then you have a very low net growth. So the longer you stick with a low stock allocation, the longer it will be before you get back to even and start turning a profit.

Once you have worked through all the cases and complexity, it turns out that the optimal strategy is to rebalance periodically whenever your actual AA drifts very far away from the target AA.

If gains were of no concern, you'd be 100% in cash, since that is 100% safe with no volatility. If volatility were of no concern, then you'd be 100% in stocks, since that's where the gains come from. So you try to find a balance between volatility and gains and set your AA accordingly. Given that, why would you allow your AA change dramatically just because of random swings in the market? The argument you used to decide on your target AA, that same argument would apply when your actual AA is *not* near the target AA, so the logical thing to do is rebalance to keep the actual AA near the target AA.
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