Daily FI discussion thread - April 14, 2020

So my question below is similar but its more about determining your target allocation numbers for your situation.

Depending on your situation you could have a "Target Allocation". Say that's 60% stocks/40% bonds. Well with all of the movement in the market over the last few months your stocks would have dropped in value more than your bonds. So your portfolio may now actually be 50% stocks and 50% bonds. That would mean that you need to re-balance your portfolio to get back to your target of 60%/40%. My understanding is that this should be done off of a pre-deterimined "target allocation" also re-balanced on a set schedule to help smooth out market volatility.

/r/financialindependence Thread Parent