Fortifying market-neutral position

While long-term equity positions are probably the most lucrative positions to hold, they are most prone to luck of market entry. There have been years in which the market did not recover from a systemic event. Consider Japanese markets since 1980-s… There are also large regulatory shifts and events that can modify the market. Therefore I add the following rules for myself:
1. Never keep more than 50% of my total worth in investment accounts. This is a bit tricky since all funds we treat as “protected” are also investment accounts played by third party. But there is cache, and house, and passive income streams.
2. Keep at least 50% of my investment account neutral to US equity. This means bonds, REIT, forex, international equity, commodity positions, swing trades I can easily liquidate – all of them are correlated but not strongly correlated.
3. Rebalance total wealth, e.g. invest into stocks every two years. The markets are roughly cyclic, and investment every two years should handle some of the cyclic effects. This holds above the minimal viable diversified account (which should be ~150K USD by the tactics presented here).
4. The best tactics of reaching the minimal viable diversified account is not clear. Probably investing only during drawdown period a sum smaller than drawdown is viable. Every year we have at least 5% drawdown, up to 40% in highly speculative accounts. Investment during drawdown fights the depression of drawdown and enforce “buy when low” principle. The bigger the drawdown, the larger the investment…

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