Investing - Theory, News & General • 60:40 with rebalancing during down market (2022)

As I near retirement, I'm attempting to get comfortable with the appropriate amount of "cash" as part of my FI within a 60:40 portfolio.

I'm currently 60% equities, 25% VTIP/VTP, 15% VUSXX with the thought that I will be able to pull from VUSXX during a market downturn to ride out the early SORR years.

YouTube personality and Boglehead fan Rob Berger seems to recommend 3-6 months in "cash" to cover short term expenses, but to otherwise remain fully invested per one's AA while actively re-balancing.

2022, when both equities and bonds dropped dramatically, makes me hesitant. To me, rebalancing is a way to sell some winners to buy "losers" during market downturn with the expectation that equities will, eventually, out perform bonds. But does that hold true when both asset classes are falling?

It appears that a 60:25:15 portfolio with no rebalancing would have outperformed a 60:40 portfolio with a 5% rebalancing band enabled:

https://testfol.io/?s=5Qh5isvcEzK

So, for those nearing/in retirement, is it better to build up a "cash" position to fend against SORR or better to maintain an AA via rebalancing?

Statistics: Posted by id0ntkn0wjack — Mon Aug 17, 2026 5:11 pm