O'Reilly logo

Asset Allocation For Dummies® by Jerry A. Miccolis, Dorianne Perrucci

Stay ahead with the world's most comprehensive technology and business learning platform.

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, tutorials, and more.

Start Free Trial

No credit card required

Chapter 15. Knowing When to Revise Your Plan

This book is all about determining and maintaining your long-term, strategic asset allocation. So after you've done all the work necessary to set up your asset allocation, why would you revise it? Simple: Things change. Inevitably, fundamental changes during your lifetime will require you to revisit the assumptions you made when you first set up your allocation.

Some of those changes are gradual and expected, such as aging. Others may be sudden and unexpected, such as job changes, divorce, or economic upheavals. Whatever the cause, sometimes prudence will demand that you take another look at your asset allocation. You may not revise it as a result — you may simply validate your earlier decisions — but it's healthy to periodically raise the question.

Note

We're not talking about market timing here; we never recommend that dangerous investment method. The changes that should prompt you to review (and perhaps revise) your asset allocation have nothing to do with the state of the financial markets themselves. They represent either lasting changes to your lifestyle or fundamental shifts in the overall economy.

In this chapter, we take a look at some of the events that should trigger you to evaluate your asset allocation, so you'll know when it's time to review and decide if some changes are necessary. We also consider the changing investing lives ...

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, interactive tutorials, and more.

Start Free Trial

No credit card required