Aminatidi wrote:The closest to "evidence" is their track record I guess - they have one, I certainly don't.
My preference leans more towards risk based v doggedly sticking to fixed % allocations come what may.
I seem to recall PLNL significantly lowering its equity allocation a year or two after the GFC market bottom. Google threw up this from 2010:
https://citywire.co.uk/investment-trust ... re/a425023
suggesting a reduction in equities from 80% to 50% at that time. I don't recall the equity allocation ever rising back up from this (but could be mistaken), and only recall seeing it around or lower than 50% since.
With hindsight, significantly reducing equity exposure in 2010 doesn't appear to have been a great decision.
PNL had only foresight to act on though, and presumably they had some reason: perhaps valuation, thinking the "easy" money from equities' recovery had already been made and the risk/reward balance had thus shifted for the worse, which led them to make a sell decision that'd come to have a significant opportunity cost for holders...
These people, and others in similar roles, aren't infallible, so best to calibrate your expectations accordingly. There's a bit of a leap of faith involved in trusting in their investment methodology black-boxes, warts and all.
Recency bias means PNL and its ilk may seem like a very comfortable thing to be holding during and shortly following periods when markets take a kicking, but holding may feel less agreeable when markets have been booming for several years. If you appreciate that then fair enough, but I'm sure there'll always be a stream of people in the future who'll hold lower risk and less volatile assets throughout a lengthy bull market, only to eventually ditch them for something racier once it eventually "feels safer". And we know what often happens next. Try not to be that person.