grapesofwrath wrote:Desert wrote:I do like the 40 percent equity though, and am slowly building up from 30% to 40%.
You feel comfortable increasing your equity exposure at a time when US stocks are "richly" valued ?
I'm well below 30% and would like to increase towards 40% but am reluctant to do so now and wish to wait for a "mean reversion". Of course I could be waiting a long time as US stocks could be on a permanently high plateau.
I really don't feel comfortable increasing equity exposure right now. As you said, equities are expensive, by any measure I'm aware of, particularly U.S. equities. But I'm trying to stay focused on the long-term view, and remind myself that predictions are difficult, particularly those regarding the future. I did decide to do it gradually, just directing new contributions toward equities rather than doing it in one lump-sum rebalance (and yes Mathjak, I know this is sub-optimal, so there is no need to lecture me on this point).
At 40 percent equities, I think it's necessary to be prepared for a ~20% decline in portfolio value at any time in the future.