Most investors want know if their asset allocation is correctly set to their risk tolerance until we get into a severe market downdraft. If one waits too long in the downdraft to start to trim their positions, raising cash, then they might indeed be better off to just ride out the storm. However, I have certain positions I plan to trim and others I plan to raise (including cash) in a stock market decline. The consept is to move money that is invested in the area of greater risk on the right side of the portfolio left towards areas of investment with less risk.
That is why my asset allocation has investment ranges for my portfolio's areas of investment. For the cash area my ranges are from 15% to 25%, for my income area the ranges are from 25% to 35%, for my growth & income area the ranges are form 30% to 40% and for the growth area the ranges are from 10% to 20%. In extreme market declines cash can be temporarily held above the 25% mark while most of the trimming would come from the growth area of the portfolio since it consist mostly of all equity capital appreciation type funds where the greatest risk is found. I use my market barometer as a tool to help me throttle my asset allocation and rebalance it from time-to-time based upon my market read. Currently, if I were to completely sell out the growth area that would raise my cash allocation to about 35% if all were moved to cash. In the rebound, I'd load the growth area while reducing cash. Most likely, I'd stand pat in the income and growth & income areas of the portfolio.
In my book ... Buy & Hold does not mean hold forever. Even Mr. Buffett makes holdings adjustments within his massive portfolio form time-to-time based upon his firm's market read.
I have already developed my market downdraft management plan just in case the market storm arrives. Usually, these market storms come quickly and are unexpected.
Are you prepared?
Old_Skeet

@BobC: I bought CIM in June of 2015 @$14.55 per share, and CIM-A in November of 2016 at $24.56. I have a SLO in for CIM at @15.00, and have no worries with CIM-A will wait for 2021 call
Regards,
Ted

FYI: Be honest with yourself: If you can’t hold on during a bear market, it’s time to reduce exposure.
Regards,
Ted
https://www.wsj.com/articles/everyones-a-buy-and-hold-investor-now-but-can-you-stay-that-way-1502071861?tesla=y

Just curious, Ted, how you look at CIM. Fixed-income? What would be your trigger to sell? Looking at trading volume, currently at 1.5 million shares, and only 150,000 in 2008 when the bottom fell out of the mortgage market. Looks like it would have been darned difficult to unload it and not suffer through the 77% loss. The share price of $74.50 in December 2007 vs. $18.75 today. Ouch! You obviously have done well, but hope you have an exit strategy...just in case. Regards.

Frankly ... and I don't mean to start a dogmatic fight here ... but I've never been a big fan of such "rules" about allocation percentages, rebalancing, and so forth. I don't rebalance any of my long-term accumulating portfolios, other than to make sure it's allocated in sectors/companies/position sizes that let me sleep well at night. (I'm 90+% in equities and equity funds across my various accounts....but what works for me may not work for someone else, as is the nature of many things in life, including investing.)
My 403(b) is 95% in one largecap equity fund (RWMGX) with a smidgen of idle cash in the account ready to deploy onto that position if there's a market swoon before employer contributions resume in the new academic year.

401(K) is a long term investment for 30-50 years horizon. Unless one is invested in target dated funds, rebalancing on a regular basis (quarterly or annually) is necessary rather than leaving it on autopilot.

All ratings have been updated on MFO Premium site, including MultiSearch, Great Owls, Fund Alarm (Three Alarm and Honor Roll), Averages, Correlation, Dashboard of Profiled Funds, and Fund Family Scorecard.
The latest up-market cycle reached 101 months, from March 2009 to July 2017, inclusive ... about 8.5 years.
Annualized return for SPY over that period: 17.8%, or just under 300% total return ... for those wise, lucky and flush enough to invest at the bottom ... and brave enough to hold.
Remember when this was the most hated bull market? And to some, it remains so.
The top 10 US Equity funds over this period, based on absolute return, are shown in table below. Most have nearly doubled SPY total return and interestingly, three are PIMCO equity funds!

FYI: EM equity fund saw their 20th straight week of inflows, with investors putting $1.2 billion.
Regards,
Ted
http://www.barrons.com/articles/money-keeps-pouring-into-em-funds-1501869501?mod=hp_RTA&;

@AndyJ: I happen to own both CIM & CIM-A with the following performance records. Your right a real horror story, not !
CIM: YTD 16.57%
1-Yr. 25.95%
3-Yr. 16.67%
5-Yr. 22.42% +10% Yield
CIM-A: YTD 2.88% +8% yield
Regards,
Ted

401(K) is a long term investment for 30-50 years horizon. Unless one is invested in target dated funds, rebalancing on a regular basis (quarterly or annually) is necessary rather than leaving it on autopilot.

Hennessy has been raising the fee since they acquired the fund.
They then introduced an 'institutional' share class with a $250,000 minimum - with a lower fee than the (original, now called) 'investor' class, and in a very! shareholder-unfriendly manner - did not place the original investors in the 'institutional' class.
Aside - the current institutional GASFX ER is not that different from what the original ER had been, prior to Hennessy acquisition.
Other funds - can't recall any specifically at the moment - have given the original shareholders - this "grandfather" benefit and lower expense ratio.
I currently have gains on the fund, that prevent me from liquidating the fund without paying the cap gains tax. If I could sell without paying the C/G tax, I would sell it immediately.
FWIW (and too late for my "old money") you can duplicate the exposure of the fund, through a mix of MLP and Utility ETFs. The expense ratio would be, in aggregate, MUCH lower than GASFX, and it would be more tax efficient.
Below - using the wonderful PortfolioVisualizer.com, are a couple of examples
Match GASFX with MLPX + VPU: http://tinyurl.com/GASFX-match
Backtest Match of 35% MLPX + 65% VPU, with Annual[*] Rebalancing: http://tinyurl.com/GASFX-backtest
[*] Other rebalancing options are available. See menu at PortfolioVisualizer, linked above.
Since
http://www.etf.com/VPU has ER of 10 bps
http://www.etf.com/MLPX has ER of 45 bps
the blend has ER of about 22 bps, which is 79 bps less than the larded up GASFX Investor class.

FYI: (Click On Article Title At Top Of Google Search)
Five funds to ride the recovery in European and Japanese small and midsize stocks, for this year and into 2018.
Regards,
Ted
https://www.google.com/search?site=&source=hp&q=Investing+in+Developed+Markets?+Think+Small+Barron's&oq=Investing+in+Developed+Markets?+Think+Small+Barron's&gs_l=psy-ab.4...5480.11488.0.11746.12.11.0.0.0.0.105.838.10j1.11.0....0...1.1.64.psy-ab..1.9.663.6..35i39k1j33i160k1j33i21k1.qAhLnNCGpso

FYI: (Click On Article Title At Top Of Google Search)
The future will belong to newer innovations, and the new iShares Exponential Technologies ETF aims to capture that.
Regards,
Ted
https://www.google.com/search?site=&source=hp&q=beyond+apple:+making+a+better+technology+etf+barron's&oq=Beyond+Apple:+Making+a+Better+Technology+ETF&gs_l=psy-ab.1.0.35i39k1.6086.6086.0.9171.3.2.0.0.0.0.79.140.2.2.0....0...1.2.64.psy-ab..1.2.140.6.U0gj4_QEI1A
M* Snapshot XT:
http://quotes.morningstar.com/chart/etf/chart.action?t=XT&region=usa&culture=en-US
Lipper Snapshot XT:
http://www.marketwatch.com/investing/fund/xt
XT Is Ranked #1 In The (MS) ETF Category By U.S. News & World Report:
https://money.usnews.com/funds/etfs/miscellaneous-sector/ishares-exponential-technologies-etf/xt

FYI: (Click On Article Title At Top Of Google Search)
It’s time for some cautious optimism. Income investors have had it tough for too long now, settling for 2% yields on high-quality bonds and stocks. As interest rates creep higher, investors can find much higher-income securities, if they’re willing to take a bit more risk and do more homework.
Regards,
Ted
https://www.google.com/search?site=&source=hp&q=Where+to+Find+11%+Yields+Barron's&oq=Where+to+Find+11%+Yields+Barron's&gs_l=psy-ab.3..35i39k1.5541.11366.0.11610.12.11.0.0.0.0.77.643.11.11.0....0...1.1j2.64.psy-ab..1.11.643.6..0i3k1.7CuF66raxuc

The main difference is that PIMIX is OEF which means price=NAV while CEFs has a price for trading which is not usually equal the NAV(which is what it's worth). In a meltdown, the price can go down very quickly based on trading all day long from buyers and sellers.
And most CEFs are held by retail investors.
But, that doesn't mean CEFs are "bad", if you can stand the volatility you can make more money. I would hold CEFs instead of stocks.
I also want to point out that Ivascyn invests his own money a lot more in PDI+PCI than in PIMIX.
5 year performance for PDI 18.5% annually...PIMIX 7.8...SPY(SP500) 14.5%. YTD(year to date) PDI 18.2% annually...PIMIX 6.1...SPY(SP500) 11.7%.

CEF's have no limit on the amount of illiquid securities they may hold. OEF's are limited to a maximum of 15%. A knowledgeable CEF investor would know this and it would influence increased selling in a downmarket The CEF itself as a unit would have liquidity risk in a downturn based on market demand and other factors. Since a great deal of CEF's are held by small investors there would have to be enough buyers in a downturn to maintain liquidity but in this scenario more sellers would be expected, leading to the liquidity problem. Because PDI holds more illiquid securities than PIMIX and for other multiple reasons, it is much more risky, than PIMIX, and the CEF itself would face liquidity problems. Would PIMCO,s secret sauce lower the risks in a downturn? I personally would not hold my breath. That is also why my PIMIX holding is a satellite one. Fidelity's site has good information on CEF risks.

IMHO and those of others 42.5% leverage is highly leveraged. Maximum allowed is 50% as per the Investment Company Regulation act of 1940 and the median amount of leverage for cef's is about 33%. My post was to highlight the fact that in a financial downturn this leverage will still require payment on the debt ,which will cause increased shareholder loss. In addition ,losses will be magnified by the leverage with interest rate declines, especially in the longer maturity securities. The 26% of fund holdings in MBS in PDI is of the non agency variety ie subprime with higher yields. In a downturn when folks are running to the exits this fund will likely have liquidity issues/problems. I do own CEF's and know about the potential downsides. Sugarcoating PDI does not do it justice. PONDXPIMIX is a buy and hold fund and PDI is not, IMHO. I own PIMIX as a satellite fund in my portfolio and sleep well with it there

Highly leveraged with a healthy high yield portfolio. When the bears start to run, those in it will be in a world of hurt. I will stick with my PIMIX/PONAX and sleep better.

Technically (and more from the top of my head than bc I am delving deep into their portfolio), PDI, PCI, and it's PIMCO CEF cousins are mostly NOT high yield funds. They make a lot of their return on smartly-purchased MBS, but also on swaps and derivatives that both hedge their portfolios to swings in interest rates and add to their returns. Look at the performance of their NAVs on days when interest rates rose.
As far as premiums go, think of PDI as the equivalent of a single bond. (I know I know it's not! Just work with me here....) Would you rather hold a bond that matures in, say, 10 years (I know PDI doesn't mature and return your full par value.....just an exercise), and pays 8% interest along the way (again, I know it's distribution is not fixed like a bond....), or would you rather own a bond with similar maturity that pays 4% interest along the way? Leaving out price of the bond. The yield-starved market is pricing these CEFs that earn 8-10% on their NAV, at premiums, that still allow an ~8.5% distribution (give or take a %) on current price. And yes, prices are volatile compared to their NAVs or to OEFs.
Just my thoughts. Currently hold PDI, PCI (bought later 2 just yesterday for a small account I help manage), PFN, PTY, PKO, for full disclosure. But I would also like to see their prices decline some so I can purchase more in various accounts. So talking them up defeats that purpose some ;)
Lastly, on the topic of "highly leveraged", is a fund that holds bonds picked by arguably the best bond-picking managers/team around presently, levered up 1.5-to-just-under-2 times, really a bad thing? Plus managed with "the full toolbox" available to bond managers today--hedges, swaps, derivatives, so dampen the effects of macro interest moves. mREITs are often levered up multiples of that and generally much less diversified in their holdings.
Finally, and yes, then I'll get off my proselytizing soapbox, for those who worry about asset gathering and forced redemptions, these CEFs do not deal with that, as success leads to investors purchasing the fund, driving up the premium perhaps. Conversely, sales do not force the managers to sell to meet redemptions. These are $1-2 billion-sized Ivascyn funds (best of ideas maybe? Or at least able to invest across the spectrum of holding sizes/availabilities). Imagine investing in PONDX/PIMIX when it was only this size.....

FYI: The stock market continues to reach new highs, with the bull market in its ninth year, yet individual investors, especially millennials, are not buying it.
Regards,
Ted
http://www.barrons.com/articles/why-wont-millennials-embrace-the-stock-market-1501533989?mg=prod/accounts-barrons

Reinvest, or you can move 5k to Fido and then add 50k?

@Sven, I got into PCI/PDI after reading Sam Lee's work at the Morningstar's ETF newsletter. On his blog Sam once noted PIMIX was PIMCO's best fund. That is when I added PIMIX/PONDX to my Mom's account. A little PCI for Mom as well since is was at a wider discount. It occupies part of the risk version of her account. Actually Sam Lee noted PIMIX behaved like a bond fund with a 10-15% stock sleeve so adjust accordingly. Will take a look at FSICX especially std dev.