Archive for May, 2018

Trend Indications for Key Asset Categories

Sunday, May 27th, 2018

Some observations:

  • Most key stock categories are in positive intermediate-term trends.
  • Only mid-cap, small-cap and micro-cap stocks are in positive short-term relative momentum trends.
  • Most key bond categories are in negative intermediate-term trends and negative short-term relative momentum trends, except for some municipal bond categories.
  • Equity REITs are in negative intermediate-term trends and short-term relative momentum trends, while gold and commodities are in positive intermediate-term trends, but gold is in a negative short-term relative momentum trend.

This letter presents these data for each of 42 key asset categories:

  • QVM Intermediate-Term Trend Indicator (and its elements)
  • QVM Short-Term Trend and Relative Momentum Indicator
  • Price Distance from moving average trend Lines over multiple periods
  • 3-year monthly charts containing the elements of the QVM Intermediate-Term Trend Indicator
  • Annualized total return spread versus total return of S&P 500 and US Aggregate Bond index
  • Short-term traditional technical ratings from
  • Fundamental stock and bond valuation metrics.

We produce this data regularly. It is currently available without subscription by email.  If you would like to be included in future email of this content, let us know at, use subject TREND INDICATORS.

QVM Monthly Intermediate Trend Indicator is positive on stocks, gold, diversified commodities and some municipal bond categories, but negative on most bonds and equity REITs. Money market funds or ultra-short-term, investment-grade debt funds are a good placeholder for the bond allocation.

(click images to enlarge)

QVM Short-Term Trend and Relative Momentum:

Rules: All securities must have a 200-day trend line higher than 1 month ago, and their price must be above the trend line; and they must have price return higher than 3-month T-Bill total return over 1 month, 3 months and 6 months.

Stocks, REITs, gold and commodities must also have higher price return than price return of SPY (the S&P 500 proxy) over 1-month, 3 months and 6 months.

Bonds must also have higher price return than price return of BND (proxy for US Aggregate Bonds) over 1-month, 3 months, and 6 months.

Table Indications Summary:

  • Mid-cap, small-cap and micro-cap stocks pass, while large-cap and mega-cap stocks do not.
  • Long-term and high yield municipal bonds pass, while other bonds do not.
  • Diversified commodities pass, while equity REITs and gold do not.

Price Distance from Moving Average Trend Lines:

The QVM Relative Momentum rules judge whether the price is above or below the 200-day trend line. This table quantifies the magnitude of the price deviation from the trend line; and the deviation from other common moving average trend lines.

Pink means the price is below the trend line. Green means it is above.

Asset Category QVM Intermediate-Term Trend Charts

These charts plot the 3-year cumulative percentage performance of each key asset category for comparability. The four elements of the QVM Intermediate-Term indicator are on each chart.

In the main panel: (1) the trend line in dashed gold, (2) the price in black, (3) the parabolic pace curve in dotted red. In the lower panel: (4) the money flow index within a 0 to 100 scale. The cumulative total return for the security is shown in the upper left corner of the main panel.

A desirable chart has (1) the leading edge of the trend line moving up; (2) the price above the trendline; (3) the price above the parabolic pace setting; and (4) the money flow index above 50. The trendline tip must be up for a security to have a 100 rating, and at least 2 of the other 3 elements must be positive. For mutual funds which do not have volume, we use RSI as a second-best alternative to money flow.

The QVM Intermediate-Term Trend indicator does not distinguish between a weakening and strengthening trend. Visual chart inspection and other indicators, such as the QVM Short-Term Trend and Relative Momentum indicator do that.

A 19-minute video explaining the indicator in more detail and providing performance of the indicator with the S&P 500 since 1901 may be accessed here.

Annualized Total Return Spread to Stock and Bond Benchmarks

This table shows the annualized total return of each security minus the annualized total return of SPY (representing the S&P 500) and BND (representing the US Aggregate Bond index) over 4 weeks, 13 weeks, 26 weeks, 1 year and 3 years.

The cells are color coded to quickly visually distinguish between better and worse performing securities.

Note the performance in the charts in the previous section is cumulative for the security. The performance in this table is the annualized performance in excess of the performance of a benchmark.

Short-Term Technical Indicators from

Traditional short-term technical indicators from see domestic stocks mildly positive, but international stocks as negative. They give a mixed mostly positive view of Treasuries, and negative on corporate bonds except for investment-grade short-term corporate bonds. The indicators have a mixed view on municipal bonds, a negative view of gold, and a positive view of equity REITs and diversified commodities.


Fundamental Data

These data are accessed via Morningstar and are not independently verified.

Fundamental data is not useful for understanding short-term historical or future price action but are important in the long-term.

It is a good idea to be aware of the valuation attributes of key asset categories.

Symbols Examined In This Post:

Compare 10-Year Projections Using Historical and Forecasted Returns

Thursday, May 17th, 2018

Institutions generally agree that total returns over the next 10 years will be lower than the long-term historical level:

  • 5.42% mean for US large-cap stocks vs 11.92% from January 1987 – April 2018
  • 3.19% mean for Aggregate US bonds vs 6.07% from January 1987 – April 2018.

Forecasted returns used here are averages of forecasts by BlackRock, State Street Global Advisors, JP Morgan, Bank of NewYork/Mellon, Callan Associates (pension consultants) and Research Affiliates.

Considering mean return history or forecasts is not adequate for setting portfolio expectations, because future results have a wide spread of possibilities around the mean due to the impact of volatility (often made worse by investors selling in panic at bottoms and re-entering late in Bulls).

This table shows simulated probabilities for a $1,000,000 bonds or stocks portfolio at the 10th, 25th, 50th, 75th and 90th percentile probabilities (covering 80% of likely outcomes, but still leaving 10% more extreme possibilities at either end of the spectrum undefined).

(click images to view full size)

This table shows four common allocations: 40/60 (conservative balance), 50/50 (allocation Vanguard uses in their target date funds for investors age 65 just beginning retirement), 60/40 (traditional balanced fund allocation) and 70/30 (aggressive balanced allocation).

If the institutions are correct in their assumptions, you should expect lower returns, and lower cumulative values for your portfolio over the next 10 years. The differences in cumulative portfolios per million Dollars of starting capital between simulations based on historical data and forecasted data are in the hundreds of thousands of Dollars.

For example, per $1,000,000 for a 50/50 portfolio allocation at the 50th percentile simulation probability, you should expect an inflation adjusted (real) portfolio value at the end of the next 10 years to be about $624,000 smaller (about 35% less) based on forecasted returns and volatility rather than based on historical returns and volatility. Maximum drawdowns are expected to be similar.

This table shows the actual total returns of US large-cap stocks, US aggregate bonds and nine allocation levels between them over a variety of periods all ending at 12/31/2017.

This table based on daily prices shows the rolling period price returns (not total returns) ending on all market days since the beginning of 1928. All the data is for actual results — no theory or hypotheticals here. There were many very good and very bad rolling period returns.

Bottom line – a simplified look at historical mean returns all ending on a recent day, and not understanding how volatility creates a wide spectrum of possible outcomes and occasional Maximum Drawdowns is not a safe way to look at what may occur in the future. Your allocation decision is critical – more critical than your choice of specific securities – in determining the likely range of return outcomes and the severity of likely Maximum Drawdowns.

Presuming you make reasonable choices of securities and have a diversified portfolio, those decisions will have far less impact on your overall outcomes than your Own / Loan / Reserve allocation decision.

And, whatever your Own / Loan / Reserve allocation decision, the predominate institutional opinion is that returns are likely to be lower over the next 10 years than the last 10, 20 or 30 years.

As you can see in the simulation tables, the lowest projected returns are also paired with the largest Maximum Drawdowns. Minimizing Maximum Drawdown exposure is almost synonymous with maximizing return. Selecting a static allocation is implicitly selecting a likely Maximum Drawdown exposure.

There are two ways to minimize Maximum Drawdowns, not involving derivative products or shorting:

  • Select a more conservative allocation
    • Requires lower overall return expectations
    • Rebalancing maintains risk level, but does not increase return
  • Shift between more aggressive and more conservative allocations as risk levels change
    • Requires a rational signal system for increasing and decreasing risk exposure
      • Trend following approaches are superior to trend prediction approaches
    • Shifting will experience false positives that drag on performance during Bulls
    • Generates tax costs in taxable accounts that reduce return benefit
    • Shifting as risk levels change can avoid the largest part of Maximum Drawdowns
    • Missing the largest part of Maximum Drawdowns can increase returns
    • Requires active oversight and time commitment.

Think about these historical and projected returns, and how you are most comfortable with managing risk levels.






Maximum Drawdown and Allocation Approaches

Sunday, May 6th, 2018
  • Simple Buy & Hold, Strategic Fixed Risk Level Allocation, Strategic Flexible Risk Level Allocation, Dynamic Tactical Risk Level Allocation.
  • 4.5 to 10.5 years time to recover to breakeven associated with 6 example Bears.
  • Our view of suitable allocation within Flexible Strategy.

There are many types of risk when investing. Here are 10 of them:

Credit risk
Interest rate risk
Inflation (real return) risk
Currency risk
Tax risk
Active management risk
Valuation and forecasting error risk
Volatility risk
Maximum drawdown risk
Portfolio longevity in retirement risk

Each of these deserves attention in portfolio construction. In this letter, we examine Maximum Drawdown Risk, which is probably the greatest risk portfolios face over the next couple of years.

Maximum Drawdowns occur infrequently but massively, and it typically takes years to breakeven with the pre-crash portfolio value. In the battle of philosophies between Buy & Hold and Tactical Trend Following, the long recovery time after a Maximum Drawdown is the trend follower’s main argument. We are in the Tactical Trend Following camp for long-term trend reversals. We prefer to take cover in falling markets, by tilting away from equities toward bonds or cash.

Since 1936, US large-cap Bear markets have taken mostly 4 to 6 years from the pre-crash peak to the bottom and back to a breakeven level. Total return recovery from the 2000 Bear took 6.15 years, and from the 2007 Bear it took 4.5 years. Of course, a portfolio diversified with debt assets, experienced a less extensive drawdown and a total return recovery over a shorter period.

This table shows how long it would take for total return breakeven after various levels of portfolio decline, assuming various post-drawdown rates of return:

(click images to enlarge)

Many of us, don’t have the luxury of waiting 4 to 6 years to breakeven with pre-crash levels, particularly if we are making regular withdrawals from our portfolios to support lifestyle.

A young person with only a small portion of future accumulations achieved, engaging in regular periodic investments, can not only ignore most Bear markets, but actually enjoy buying more shares each month at a lower price during a Bear – maybe even increasing the rate of investment during a Bear.

However, for someone, regardless of age, who has completed the process of adding new money to the portfolio, and is relying on the portfolio for sustenance, the Bear presents a threat not an opportunity. Of course, if that person has such a large asset base that withdrawals are less than the investment income (interest and dividends), for that person the Bear is more an annoyance than a threat and may present some attractive asset substitution opportunities.

But for most of you, and for me, the Bear is more of a threat than an opportunity if we lean into it and take it in the face full force.

Those are the reasons that generic advice to someone starting out is to put all assets in stocks, to maximize regular monthly savings, and damn the torpedoes in a Bear market. And, those are the reasons as we achieve more and more of our ultimate accumulation (Financial Capital), and the present value of our future earnings from work (Human Capital) declines, and the number of years we have before beginning to withdraw assets decreases (Time Horizon), that we need to diversify our risk (specifically the correlation of return of the assets we own), to mitigate the damage that a stocks Bear market can have on the ability of our portfolio to support our lifestyle now or in the future (to avoid the Risk of Ruin – outliving our assets – to protect Portfolio Longevity).

Unfortunately, diversification is a bit like insurance. It has a cost, at least it seems that way almost all the time, except in the instance that you need it. You lament the premium you pay for your auto, home or medical insurance, until you have a major claim event. Then you are so glad you had the insurance. Same thing with portfolio risk diversification (diversified asset return correlation), which is predominantly accomplished with high quality debt assets (particularly Treasuries). High quality debt assets do not generate returns over short periods as high as equities do, but they do not experience Maximum Drawdowns as severe as stocks – thus moderating overall portfolio Maximum Drawdown. This picture tells the story:

From the early 1990’s (close to 30 years) the S&P 500 generated a cumulative return over 950%, while the Aggregate Bond market generated a cumulative return of only 265% — and a balanced portfolio of 60% S&P 500 and 40% Aggregate bonds generated a cumulative total return of 630%.

Who would want 265% when they could have 950%? My grandchildren certainly should look to the 950%. But most of you can’t safely deal with Maximum Drawdowns that are likely over 30 years.

Here is how the aggregate bond index helped in the last two Bears (beginning in 2000 and 2007):

The 2000 Bear and the 2007 Bear were back-to-back in a sense, because the October 2007 pre-crash peak was only one year after the S&P 500 reached total return breakeven in October 2006 after the 2000 crash.

This chart shows how the S&P 500 (VFINX) and Intermediate-Term Treasuries (VFITX) worked together in 70/30, 50/50 and 30/70 allocations to moderate the severity of Maximum Drawdown in both Bears through their breakeven points:

Treasuries, unlike corporate bonds have zero credit risk (but like corporate bonds have interest rate risk). In times of panic, no form of debt beats a Treasury, although holding them between Bears is uninspiring. Gold may be helpful in a panic, but its performance is less certain. In times of significantly rising interest rates using ultra-short investment grade variable rate corporate debt, ultra-short Treasuries or money market funds may be best as portfolio risk moderators.

How Do Different Approaches Deal with Maximum Drawdown?

A very simplified view might be that there are 4 general approaches in portfolio risk management (excluding methods involving leverage, shorting, or hedging with futures or options) – let’s give them these names:

  • Simple Buy & Hold
  • Strategic Fixed Risk Level Allocation
  • Strategic Flexible Risk Level Allocation
  • Dynamic Tactical Risk Level Allocation.

Simple Buy & Hold means you own a fixed basket of securities, hopefully cognizant of the risk profile, with the intention of doing nothing thereafter for a long-time. You do not rebalance.

On the positive side, this minimizes taxes, transactions costs, and time commitment.

On the negative side, this basically ensures that the risk profile of the portfolio will move up and down by significant amounts over time – becoming much riskier as stocks outperform debt, and much less risky after stocks crash (and significant portfolio value has gone away).

This method is probably talked about favorably more than it is actually practiced – with many proponents during long Bull markets, but fewer who do not bail out during a crash.

For someone with many investing years ahead, with low assets relative to future additions to savings, making regular periodic investments, Buy & Hold is probably fine. However, for someone without many investing years ahead, with high assets relative to future additions to savings, and certainly those in the withdrawal stage of their investing lives; Buy & Hold of stocks is probably not a good approach, because of it’s exposure to Maximum Drawdown which could take several years to recover. For those in the withdrawal stage taking fixed amounts of money from a declining asset value accelerates the rate of asset depletion, which could be ruinous (your money dies before you do).

Strategic Fixed Risk Level Allocation means you own a selection of assets in a fixed ratio to each other (example: 50% stocks and 50% bonds) with an expected level of risk and return, with the intention to rebalance the mix from time-to-time, or when the ratio of assets held shifts materially, to restore the portfolio to the original allocation to maintain approximately constant risk and return expectations. The assets you choose have diverse return correlations (they don’t all go up or down at the same time in response to the same issues or to the same degree).

On the positive side, this keeps you in the same approximate risk/return exposure that you chose as suitable for you when the market value of your various assets fluctuates up and down. In effect, you sell high and buy low, which is a good thing, because rebalancing back to a fixed allocation level forces a trimming of outperforming assets and augmentation of underperforming assets (typically means trimming the more volatile assets and augmentation of the less volatile assets).

On the negative side, except in tax-free or tax-deferred accounts, trimming outperformers creates a tax cost. There are transaction costs to rebalancing, but those are very low these days and if the size of the taxable gain in the transaction is, let’s say, over $500, then the transaction is probably worth the transaction cost, but not necessarily the tax cost. There is a modest time commitment required to pay attention to the changes in allocation percentages. The lowest time commitment is to rebalance based on the calendar (such as quarterly or yearly). The highest time commitment is to rebalance based on allocations getting out of line with the plan, because that requires weekly or monthly monitoring. Overall, its not much of a time commitment either way, but more than Buy & Hold.

The allocation that is suitable for you changes as you approach retirement – Allocation Glidepath.

Strategic Flexible Risk Allocation, like the Fixed Risk approach to allocation, owns a selection of asset categories chosen for correlation diversification and held in a ratio to each other expected to produce the desired risk and return. And, like the Fixed Risk approach, you rebalance. However, instead of an unchanging allocation, you set Target allocation levels for each asset category, but also Minimum and Maximum allocation levels for each category, allowing you to modulate your risk and return expectations based on objective or subjective criteria as markets unfold or are expected to unfold (example: stocks Target 50%, Minimum 45%, Maximum 55%; and bonds Target 50%, Minimum 45%, Maximum 55%).

On the positive side, you are set up to use rebalancing to keep your expected risk and return at the level you determined was suitable for you, while also allowing you to modulate your allocation within pre-set limits based on changes in your expectations of return or volatility for some or all of your asset categories to maintain your risk exposure; or to modulate your risk exposure. Frankly, it satisfies the common human drive to act, while preventing misjudgment or emotional behavior from possibly creating a big portfolio performance problem.

On the negative side, it has the same negatives as the Fixed Risk approach and introduces the possibility that the reasoning behind deviation from the Targets is faulty. Use of the Minimum and Maximum allocations may produce a lower total return, or higher volatility, or larger Maximum Drawdown than the Fixed Approach. As they say, “it depends”. I find this approach is more appealing to more people than the Fixed Approach. Most people who are not Buy & Hold advocates prefer the idea of some continuing active choices about allocation.

Dynamic Tactical Risk Level Allocation is essentially the opposite of Buy & Hold. It means hold assets while they are doing well and don’t hold them when they are not doing well; and when risk assets are not doing well, hold the money that would otherwise go to them in safe liquid assets such as T-Bills, money market funds or ultra-short-term bond funds.

In practice this could be a full Long / Flat approach (example: 100% S&P 500 and 0% T-Bills, or 0% S&P 500 and 100% T-Bills). Alternatively, it could involve a stepwise movement between 100% and 0% between the asset categories.

The approach could be based on long-term trends (probably the better choice) or short-term trends (probably the less attractive choice) to day-trading (probably the worst choice, unless you are a very special person with very special skills with nerves of steel).

OPINION: If it is your intention to use a Tactical approach, it is probably best in most cases to use it only as a sleeve of your portfolio in combination with Strategic Fixed Risk Level Allocation, where the Strategic portion of your portfolio is an anchor to windward, just in case the Dynamic Tactical Allocations works out less well than planned.

I do believe the evidence shows that a Dynamic Tactical approach (probably more commonly called Trend Following) will underperform the Strategic approach during Bull markets (which could be many years), and if done well, outperform in Bear markets, and thereby outperform in the long-term.

It is not surprising that during the current Correction, we have received numerous calls about whether and when the Bull will end, and whether and how much we should be practicing intermediate-term Trend Following versus long-term Strategic Allocation.

First, if you set out with Strategic Allocation as the plan in the beginning of this Bull market, and now are prepared to cut and run, you never had a Strategic plan in the first place. What you had was a Tactical Allocation plan in hibernation.

A combination of a Strategic Flexible Allocation with a Tactical Allocation sleeve will suit more investors than not.

I believe getting out of the way of a train wreck — as long as an investor is properly prepared to get back on the rails when the wreck is cleared off the tracks. By this I do not mean day-trading or bouncing in and out of risk assets based on headlines, or forecasts, or exiting risk assets within the noise level of volatility (which means at least not within Corrections).

Going full Tactical may sound interesting now, but I doubt that most investors would have a taste for it as a continuing practice. For example, even the best long-term trend indicators generate some false positives. That means by following a tactical system, there will be times that it is wrong. You get “whipsawed”, meaning you exit, the indicator proves wrong and reverses, then you get back in. You may have capital gains taxes because of the exit, and you may get back in at a higher price than your exit. That upsets people, but that is part of tactical methods no matter how good they are.

Example Historical Drawdowns:

A tactical practitioner must accept those costs in exchange for the large payoffs that occur generally many years apart in Bears such as these:

  • Non-US Developed MSCI large-cap + mid-cap stocks
    Down 45% over 1.6 years from 3/1973 – 9/1974
    5.3 years to price breakeven in 7/1998
  • Non-US Developed MSCI large-cap + mid-cap stocks
    Down 58% over 1.3 years from 10/2007 – 2/2009
    10.5 years later (now) not yet reached price breakeven (still down 14%)
  • Emerging markets MSCI large-cap stocks
    down 58% over 3.9 years from 9/1994 – 8/1998
    10.7 years to price breakeven in 10/07
  • USA MSCI large-cap + mid-cap stocks
    Down 48% over 1.8 years from 11/1972 – 9/1974
    7.2 years to price breakeven
  • S&P 500
    down 51% over 2.5 years from 3/2000 intra-day high to 10/2002 intra-day low
    6.1 years to price breakeven in 10/2006
  • S&P 500 Down 57% over 1.4 years from 10/2007 intra-day high to 3/2009 intra-day low
    4.5 years to price breakeven in 4/2012.

I am not willing for my personal portfolio to endure Bears like that, then wait years to breakevenI do believe there is no utility (for other than the early stage investors making regular periodic investments, who may benefit by a stock market crash) to intentionally take the full force of the storm.

Stock market declines of 40% and 50% occur from time-to-time. Once a Bear has clearly arrived for a risk asset, exiting that asset after the Bear has quantitatively revealed itself, is reasonable in my opinion; then re-entering that asset is appropriate when the Bear is dead, and the Bull quantitatively reveals itself.

That is easier said than done, but it is doable to various levels of imperfection. However, an imperfect avoidance of a 50% decline, and an imperfect re-entry, can be better than the full ride down, with a 4 to 6 year or longer wait to breakeven with the pre-Bear portfolio value.

Recommendation (except for early stage investors)

Be allocated in a balanced way in a Strategic Fixed or Flexible Risk Allocation portfolio that is age, wealth and time horizon appropriate (see generic glide-path as a post-script to this letter) and have a Dynamic Tactical Risk Allocation sleeve in that portfolio – a larger sleeve if you think that way and a smaller sleeve if your appetite for a dynamic approach is more limited

Here is my thought about the Strategic Flexible Risk Allocation approach for now:

Keep in mind that major allocation shifts based on expectation of trend reversals is more likely to disappoint than major allocation shifts in response to demonstrated trend reversals.

Expected trend reversal approaches have a much lower batting average than trend reversal recognition approaches. Trends tend to persist, so following a trend whether up or down tends to work. Trend reversals become clear when they break out of the volatility noise area. Trend reversal forecasts tend to be flawed (it is much easier to predict what will happen than when it will happen). Consider fundamentals but rely on trend measurements.

The alternative to a permanent allocation between equities and debt instruments, is a flexible one that shifts toward debt when equity indexes turn down, and that shifts toward equity when equity indexes turn up.

That shifting can be quite moderate, such as moving between a 65% and 75% equity allocation around a target level of 70% in a Strategic Flexible Risk Allocation program, to a more aggressive approach such as 60% to 80% around a 70% target – and all the way to long/flat investors who go from full target equities to 100% Treasury Bills, then back again, based on equity trend conditions.

You need to look deep inside to decide where you belong in the spectrum from Buy & Hold, to Fixed to Flexible Strategic Allocation to partial to full Dynamic Tactical Trend following. For most, some combination of the approaches (effectively in sleeves of the portfolio will be most suitable).

Think about expected returns, return variability, and the likely magnitude of portfolio value change for the allocation you choose during a Correction and a Bear (Maximum Drawdown).

Current Intermediate-Term Trend View for Key Risk Assets:

This is our current intermediate-trend view of major equity indexes, using the QVM Trend Indicator.

A 19 minute video explains this indicator – its rationale, method and results in backtest to 1900.

While stocks are in Correction, the Bull trend has not reversed, but enough cautionary signs exist that a more conservative tilt within equities, or shifting of equity allocation toward the lower end of your allocation policy range may be prudent.

This is a general response to questions many are asking. Lot’s to talk about and think about. The answer to the questions depends on many individually specific facts.

If this responds to a burning question, this commentary may be a good beginning for a personalized discussion.

If you are comfortable with the way you are situated now, including the event of a Bear market sometime within the 2018 – 2020 time frame, that’s great. However, let’s go over your allocation preferences one more time just to make sure as much as we can that what you have is what you need, want and can handle both financially and psychologically when the poop hits the fan.


There are three ways to minimize maximum drawdown that we should evaluate (not involving hedging with short stocks, futures or options):

  • A higher allocation to assets that respond positively to Bears to prepare for a future Bear (Treasuries, high quality medium and short-term corporate debt, and perhaps gold — with ultra-short variable rate debt in times of rapidly rising interest rates)
  • Tactical reduction of risk assets once a Bear is revealed
  • A combination approach.

If you are going to be strategic, recheck your Target Allocations, rebalance if needed, and stay calm.

If you are going to be tactical, do it the better way, not the worse way.


post-script (generic glide path):