reallocation

Now, let’s address your reallocation strategy:

1. Gradual VGLT Reduction: Given your high risk tolerance and the current market conditions, you could consider selling VGLT in tranches. For example:

   • Sell 5% when the 10-year Treasury yield drops by 0.25% from its recent high
   • Sell another 5% if it drops by 0.5%
   • Sell the final 5% if it drops by 0.75%

   This approach allows you to potentially benefit from bond price increases while gradually reducing your position.

2. Purchasing Strategy:

   • GLDM (Gold): Consider buying in 1% increments when gold prices pull back by 2-3% from recent highs.
   • DBMF (Managed Futures): These tend to perform well during trend-following markets. You could add 1% each time the strategy shows a positive month-over-month return.
   • VFMO (Vanguard U.S. Momentum Factor ETF): Consider adding 1% each time the broader market (e.g., S&P 500) pulls back by 3-5%.
   • RWJ (Small Cap Value): Similar to VFMO, you could add 1% during broader market pullbacks, particularly when small caps underperform large caps.

3. Rebalancing: Given your high risk tolerance and use of risk parity, consider setting rebalancing triggers at +/- 20% of target allocations. This allows for some momentum while preventing any single asset class from dominating the portfolio.

4. Cash Management: With your quarterly withdrawals, ensure you always have at least two quarters’ worth of expenses in cash or very liquid investments to avoid forced selling during market downturns.

5. Risk Parity Considerations: Your proposed allocation seems to be moving more towards a risk parity approach. Consider using the volatility of each asset class to determine its allocation, rather than equal dollar amounts.

6. Backtesting: Use your preferred tools (Portfolio Visualizer, Portfolio Charts) to backtest this new allocation. Pay particular attention to how it would have performed during various market regimes (bull markets, bear markets, high inflation periods, etc.).

7. Regular Review: Set a calendar reminder to review this strategy quarterly, coinciding with your withdrawal schedule. This allows you to make adjustments based on changing market conditions or personal circumstances.

Remember, while this strategy is based on historical patterns and risk management principles, markets can always behave differently in the future. Your high risk tolerance and use of diversification (including alternatives like gold and managed futures) should help mitigate some of this uncertainty.