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What is your take on diversification? How have you personally managed your asset allocation?

I think 30% domestic stock is too low as well, but everyone has an opinion. Personally, I feel a higher percentage of one's portfolio should be in equities (domestic stock) during the accumulation stage, with smaller amounts in bonds, REITs and international stocks. As one approaches retirement, diversification becomes important to minimize risk. That having been said, I would still leave about half in domestic equities, even during the withdrawal stage.

As for managing allocation. I tend to do yearly rebalances, which forces me to 'buy low and sell high' across asset classes. Occasionally, I'll consider adding an asset class to the mix, such as I did with REITs last year.

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