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Thanks, Ray, for the deeper explanation. My analysis showed 3 times in the last 50 years that you would have had one of those major events. Granted, if I were on a fixed income, I would have wished I were out of the market. OTOH, looking at the day to day charts, it seems it would be quite easy to miss the precise sell & buy points and significantly sway the results. There's also the matter of taxes with all that buying and selling.

Personally, I started moving out of stock funds at a measured pace in 2007. I've evolved my strategy into the following:

When the major markets (US, Europe, Asia) are at 52 week highs AND I've not sold in 3 months, I shift 5% towards bonds/cash (from 100% stocks to 95/5%).

When the major markets are at 26 week lows AND I've not bought in the last 3 months, I shift 10% towards bonds.

I use 0% & 40% bonds/cash as my limits and simply rebalance if the buy/sell triggers hit.

The major advantage I see is that I'm buying at lows and selling at highs, significantly more so than using the SMA and I should be reducing volatility. Granted, I did sell during the recent up swing of the market where I would have been better off holding, but SMA trading would have done the same thing.


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