If the asset allocation is 50:50 and there is a 10% correction, then the allocation would become 45:55… so then, I would re-balance to 50:50 by purchasing the US broad market ETF. Is that correct?
Monday Morning Millionaire Program Answer:
Exactly. And going in the opposite direction, if the US broad market ETF rises 10%, then the allocation would become 55:45. When that happens, you should re-balance by selling enough of your ETF to bring the asset allocation back to 50:50.