Hi, Tom,
Re: Retirement account rebalancing........
Good article there! Perhaps you should contact the author and suggest adding AIM as an overall management tool, rather than just the strictly buy-and-hold idea he's advocating. His point, "In order to understand the attractiveness of the Ultimate Buy-and-Hold Strategy, what you need to know is that a lower standard deviation is better, indicating a portfolio that is more predictable and less volatile." (emphasis added). Since AIM as a methodology uses volatility as the primary "engine" of activity, making something "less" volatile would seem, on the surface at least, to be counterintuitive. Of course this is just one aspect mentioned whilst dramatizing the benefits of diversification via asset class management, which is the primary thrust of the article. It would be interesting to see what fund(s) (or proxies) were used to obtain the results. It would be also of interest to backtest via AIM those same funds and see were B&H would out or under perform AIM.
BTW I love all of these "what-if" articles that start from an assumed base of $100,000 or so. For many people caught up in recession/forclosure and so on, keeping, let alone getting to that first $100K seems to be the biggest hurdle. Pocket change, right!
Best,
AIMster
