QUOTE(kimyee73 @ May 16 2013, 09:23 AM)
The most important thing is not when to get in but when to get out. If you listen to news or analyst etc., they will tell you when to buy but never when to sell. If you know when to sell you'll cut your loses short. Housing may not be a good example as it is not easy to liquidate. With stock or UT, you don't want to keep your stock during downturn as you can make better use of the cash during this period. Also if you lose your job during this recession, your money go stuck in the equity.
For exampe, if you have rm100k in UT, 50K in fix & 50K in equity. When market went down by 10% on equity side, you forced rebalance to 20-80. Now you have rm19k in equity and 76k in fixed. If market went down worst case by 50% on equity side, your UT value is now rm11.5k in equity and rm76k in fixed, total 87.5k. I'm assuming fixed income did not suffer drawdown just for illustration.
Now, example if you use normal rebalancing. When market down by 10% in equity, you perform normal rebalance. Let see how the value ended up by the time market went down by 50%. 10% (47.5k fixed,47.5k equity), 20% (45k,45k), 30%(43k, 43k), 40%(41k,41k) and finally 50%(39k,39k).
If you follow normal rebalancing you ended up with about rm78k versus if you force rebalance, you still have rm87.5k. I stand corrected if my math is out a bit

I am doing force rebalancing the way you mentioned. Looking at total value equity portfolio drop to certain percentage to cut more losses or lock in profit.
I am restless to wait when it drop rock bottom and need to wait 2-3 years for it to come back up while doing top up average down.
In my excel sheet, there is a value i put next to my total current value. So i can know when to execute force rebalancing.
Of course i will see also major market indices, if majority are all red for 1 week, 1 month, 3 months, then will force rebalance.
I think this is a layman investor method, no complicated technical analysis.
I will also do normal rebalancing one time a year towards end or begin or the year. Move some profit to balance fund or conservative fund ie Hwang Select Income or Kidsave.
I am open to improvise my method and evaluate others method as well. I just want to sleep well.