Hi Dreamer,

AS I said earlier , I just oversimplify it and it is adopted from Public Mutual which is copyrighted.

And what is a bear or bull market ?

If CI is trading at 1500 pts, do you think it is a bull market ? So should one be fully in Bonds ?

And what is a bear market ? Subjective to me also. Which part of Bear Market is more or less bearish to invest ?

The Public Mutual Asset Allocation ( the one I refer to ) is quite difference from the original model I study in Financial Planning , as a matter of fact.

First PB used CI points as the model but CI as you know may not represent the fair valuation of your investments. Besides, if at 1600 pts let say, then it would be at uncharted area , the model ceased to be effective.

So Public Mutual switched to PE as a modification of Asset Allocation to reflect a better picture, not a perfect model either.

At first, I disagree but it does actually make sense to me, so I adopt it.

Investment tools are " dead" if we do not consider the current situation such as "IF we were to be at 1600pts or so."

The methods we use is just another way to measure Bull or Bear, neither a perfect model, but do considering the risk and return factors.

You can disagree of course. Your model could be America's model, therefore tends to be more original. But it has to be relevant to our Malaysian Market. I doubt your model is also as original as the ones from the textbook.

Use which is comfortable to you.

No point to argue further

This post has been edited by SKY 1809: Aug 9 2009, 08:02 PM

Hi Dreamer,

I did not say it is 100% perfect or applicable to US Markets.

And this thread is more or less related to the local situations.

If you think your investment method and the ones offered by Vanguard is a perfect one, just endorse at your comfort.

By the way, I am not promoting Public Mutual here.


Happy Investing.

---

Added on August 9, 2009, 9:36 am
Asset Allocation
What Does It Mean?
What Does Asset Allocation Mean?
An investment strategy that aims to balance risk and reward by apportioning a portfolio's assets according to an individual's goals, risk tolerance and investment horizon.

The three main asset classes - equities, fixed-income, and cash and equivalents - have different levels of risk and return, so each will behave differently over time.
Investopedia Says
Investopedia explains Asset Allocation
There is no simple formula that can find the right asset allocation for every individual. However, the consensus among most financial professionals is that asset allocation is one of the most important decisions that investors make. In other words, your selection of individual securities is secondary to the way you allocate your investment in stocks, bonds, and cash and equivalents, which will be the principal determinants of your investment results.

Asset-allocation mutual funds, also known as life-cycle, or target-date, funds, are an attempt to provide investors with portfolio structures that address an investor's age, risk appetite and investment objectives with an appropriate apportionment of asset classes. However, critics of this approach point out that arriving at a standardized solution for allocating portfolio assets is problematic because individual investors require individual solutions.

---

Added on August 9, 2009, 9:46 amDynamic Asset Allocation
Another active asset allocation strategy is dynamic asset allocation, with which you constantly adjust the mix of assets as markets rise and fall and the economy strengthens and weakens. With this strategy you sell assets that are declining and purchase assets that are increasing, making dynamic asset allocation the polar opposite of a constant-weighting strategy. For example, if the stock market is showing weakness, you sell stocks in anticipation of further decreases, and if the market is strong, you purchase stocks in anticipation of continued market gains.

---

Added on August 9, 2009, 9:49 amhttp://www.investopedia.com/articles/04/031704.asp

---

Added on August 9, 2009, 9:54 amConstant-Weighting Asset Allocation
Strategic asset allocation generally implies a buy-and-hold strategy, even as the shift in the values of assets cause a drift from the initially established policy mix. For this reason, you may choose to adopt a constant-weighting approach to asset allocation. With this approach, you continually rebalance your portfolio. For example, if one asset were declining in value, you would purchase more of that asset, and if that asset value should increase, you would sell it.

There are no hard-and-fast rules for the timing of portfolio rebalancing under strategic or constant-weighting asset allocation. However, a common rule of thumb is that the portfolio should be rebalanced to its original mix when any given asset class moves more than 5% from its original value.

---

Added on August 9, 2009, 9:56 amTactical Asset Allocation
Over the long run, a strategic asset allocation strategy may seem relatively rigid. Therefore, you may find it necessary to occasionally engage in short-term, tactical deviations from the mix in order to capitalize on unusual or exceptional investment opportunities. This flexibility adds a component of market timing to the portfolio, allowing you to participate in economic conditions that are more favorable for one asset class than for others.

Tactical asset allocation can be described as a moderately active strategy, since the overall strategic asset mix is returned to when desired short-term profits are achieved. This strategy demands some discipline, as you must first be able to recognize when short-term opportunities have run their course, and then rebalance the portfolio to the long-term asset position.

This post has been edited by SKY 1809: Aug 9 2009, 03:07 PM

Well, If Dow does not Crash this October, you can always carry forward the crash to the future Octobers .

Do not worry, there are so many Octobers in our lifetime.

It is just a matter of time.

If that is the case , Sept should be the correct Crashed Month.

October month end still up

Sure Boh,

I know you have the money, but a bit lazy to buy only.

Not only this October, Every October is a potential one.

Dow's investors are very worry of October thing.

This post has been edited by SKY 1809: Aug 9 2009, 07:21 PM

Sold my Bursa CL at 70sen

Move to Fajar warrants , longer expired date.

I try not to be greedy.

Fajar trying to fly

Plse make my Fajar moves the same way.

Our CI tied with rubberband, hardly moves.

Call the monkeys to stay awake.

Ya, in your dream you see red.

You see a lot of ( RED ) flags there.

KUALA LUMPUR: The worst is over in the world economy, but full recovery will be a long time coming, said Nobel prize-winning economist Paul Krugman.

He said measures such as sustained government spending, coupled with fiscal stimulus had brought the world to the point of "rough stabilisation", adding a technical recovery in the US was currently in the works.

"The US is roughly at a turning point as we speak," he said at the World Capital Markets Symposium on Aug 10.

Krugman, who is also professor of economics at Princeton University, said it appeared the global economy had avoided "Depression 2.0".

He said, however, there was every reason to believe a recovery would be characterized by higher growth and industrial output, but lagging employment.

"The world looks like it is heading towards becoming a globalised version of Japan in the '90s," he said.

He said a full recovery was at least two years away, and governments would need to try all different measures to bring recovery, such as implementing more stimulus packages.

About to turn Green

I think Najib would annouce Stimulus Action Plan part 2 soon.

To be in time To boost up 4Q GDP.

About 70% of 60 billions still held back, pending implementations.

need to set up a KPI for Najib also