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Not that it will bring you any comfort, but what would be the percentage of loss incurred had you left your funds in the orginal IRA?
(IMHO) it is wise to listen to what the experts are saying but not necessarily take any of their advice. It is important to remember that the market moves on emotion more than we would like it to. Thus we have to understand that when the experts all start singing from the same sheet watch for market moves. Or when certain experts speak individual stocks move. But if we have done our homework and the reason/s we invested in a holding have not shifted then why not hold tight. In the case of Asian, South American and maybe European funds there has been fundamental changes thus probably in the short term it is best to sell. But if you have the time, and it could be years???, these funds will probably recover. So it is a question of how long you have to wait for the recovery.
As for asset allocation, there is a reasonable to case to be stated for an allocation. The key point to the case "age" of the investor. In other words the older investor should not be invested in funds that have alot of risk depending upon how soon they want the invested money and can not wait for an upside in the market to sell. So allocation should be based on investing for growth(risk) and needed income from the investments. Also base your asset allocation on your comfort level not on some advise from a brokerage house or broker. If you want to stay ahead of inflation(say 4%) and withdrawn say 3% of your investments each year then you would need a 7% plus to not have to dig into your principal.
The asset allocation formula is great for putting money into the pockets of brokers. As you have seen they are always changing the allocation and they are always talking about keeping it balanced. This ploy allows them to churn accounts which means dollars from your pocket to theirs. If you don't buy/sell they don't make money!!! Brokers love the current market as investors are now in the fear stage of investing thus selling...the market will rebound and investors will transistion into the greed phase thus buying. So in this environment brokers can't lose.
I've rambled long enough. It is your money and you need to decided, based on your research, how you want to invest it. You decide what your asset allocation formula should be. And finally remember the market goes up but it also goes down but it will come back.
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