I'm not sure there is an ironclad "rule" concerning when you should, if ever, lower your equity exposure. Here's why.
First. you didn't tell us your age. Under my scenario. that would be helpful for discussion purposes, but not mandatory. Do the funds need to last 20 or 40 years? That will influence how aggressive or conservative you might want your portfolio to be. Your health also enters into the recommendation for the same reason.
How familiar or conversant are you regarding investing? Are you comfortable managing a portfolio unassisted by professionals or do you need/want assistance? There were warning signs about the January/February 2016 debacle going back to last August. Did you heed any of them or did an advisor make you aware of them? That answer could impact how long to stay in equities. The signals were computer generated, but not by any of the robo-advisors I'm aware of. Did you pick up on any of them?
Did you sleep well during January/February of this year or did cascading losses cause insomnia? What alternative investments would you redeploy your equity money into? Fixed income securities (bond) yields aren't keeping pace with inflation currently nor do I see them doing so any time soon. How will you protect purchasing power in such a case? How do YOU define risk? Loss of principal or falling behind inflation? Are you a buy and hold investor or will you take profits when judicious?
The only rules I've learned in my career are 1.) things change. 2.) they will change whether you want them to or not. 3.) an educated investor is the best investor and 4) cut your losses short and let your profits run long. Other than those, I've not learned any "one size fits all" rules. Investing is an individual exercise and like any other exercise, to be successful, you have to stay disciplined.
Hope this has given you somse points to ponder.
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