It's time to check allocations when any one you own moves significantly outside the parameters you've set for them. Trustees of large pools of money are required by law to have a written Investment Policy Statement. Most wealthy investors I've worked with have IPS's also. The statement sets out what the pool of money is for (education, retirement,second home purchase). It then defines what the author(s) consider to be risk, what kind of investments they are willing to make or avoid, how often they will check their allocations and, not necessarily last, establish a range of their assets to be in each category (70%-0% US stocks, 70%-0% foreign stocks, 20%-0% managed futures, etc.). When they find the their original 40% in US stocks has grown to 65%, they reallocate. Same thing if their original 40% has shrunk to 30%. Rather than saying "reallocate annually", I'd rather see you keep your written guidelines current depending on how you feel about the market and then use that as a trigger point to re-allocate. There are sample IPS's on line if you do a Google search that you can adapt to your own situation. Hope this helps.
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