Please help me follow my IPS by telling me what my IPS says

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patrick
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Please help me follow my IPS by telling me what my IPS says

Post by patrick »

I had first posted my IPS here nearly 10 nearly ago (viewtopic.php?t=61915). The portion regarding percentage in stocks is as follows:
Portfolio will stay at 84% stocks while under 250K, reduced to 80% when reaching 250K, and another 4% for each further multiple of 250K. Don't go below 52% stocks.
So I should (and did) decrease the percentage in stocks as the portfolio got larger. Unfortunately recent events bring up the question of the reverse direction. Should I increase my stock allocation by 4% in response to falling across a multiple of 250K since I'm back in the previous situation? Or should I just keep the stock allocation the same since the IPS only mentioned reducing and didn't say to ever increase, especially since large back and forth swings might require changing the stock percentage very frequently?
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grabiner
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Re: Please help me follow my IPS by telling me what my IPS says

Post by grabiner »

I would suggest moving back up. You decided that a $500K portfolio has an appropriate risk level for you if it has $380K in stock and $120K in bonds; this risk level should not depend on how it got there.
Wiki David Grabiner
lgs88
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Re: Please help me follow my IPS by telling me what my IPS says

Post by lgs88 »

I admire your IPS, because it deftly adjusts risk to your need and willingness to take it. Wish I’d thought of the same.

I’m with grabiner. Sounds like you’re getting back on the stock market roller coaster til your fortunes return — that is, unless there’s been a change in your life circumstances (NOT market conditions) that’d justify a gentler risk profile.

lgs88
merely an interested amateur
chrisdds98
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Re: Please help me follow my IPS by telling me what my IPS says

Post by chrisdds98 »

if you want to follow that strategy you would set your asset allocation based on the balance.
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celia
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Re: Please help me follow my IPS by telling me what my IPS says

Post by celia »

I look at that statement as a table with multiple rows, like this:

$0-250k 84% stocks
250-500k 80% stocks
500-750k 76% stocks

Etc

The direction (moving up or down) isn’t what is important. This just says to me that your AA is dependent on the value of your portfolio.
CT-Scott
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Re: Please help me follow my IPS by telling me what my IPS says

Post by CT-Scott »

So you have an IPS you wrote 10 years ago and aren't sure what your 10-year-younger self intended or would do in the present situation, but want to make sure you stick to that 10-year-old IPS' instructions?

Do you have a strong recollection that God spoke to you directly 10 years ago, such that your 10-year-old IPS is infallible?
milktoast
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Re: Please help me follow my IPS by telling me what my IPS says

Post by milktoast »

It's a good plan. Increase your stock position. Yesterday would have been a good day. Maybe tomorrow will be another one.
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