Is this a reasonable investment stategy?

I'm just tossing around ideas. Here is my idea. We all know the market goes up and down in cycles. Let's use indexed mutual funds as our investment vehicle to take out the variable of picking the "right" stocks or bond type. This is not a lump sum strategy. Every month we have $1K to invest which is increases w/ inflation each yr ($1K + $30 next yr assuming 3%). During bullish yrs, we invest new $ as follows: 70% bonds 30% stocks. Every 6 months during a bull run, we pull 5% off the table from stocks and place into a bonds. When bull run ends, we take sell our bond holdings and slowly buy back into the stock market. New money spread will be 70% stocks & 30% bonds. It's just an idea. No need to flame me if it's horrible. What's do you think of it.

I think your strategy is fine. It's quite conservative and seems to be far more structured towards the protection of principle rather than principle growth. Bonds are not the oppossite of stocks so you aren't hedging your portfolio but diversifying. You probably can't buy at the bottom so you are employing a dollar cost averaging strategy which is sound and although not really judged to be superior to lump sum investing is what you are choosing.

In summary there are different strategies which would increase your return but that doesn't appear to be your objective. If the returns are acceptable to you and you sleep at night. Then carry on with the knowledge that you are accomplishing your goals. I would love to know the long term outcome of this strategy.

Good Luck.

I would want to be more flexible and buy stocks that I researched and chose when to buy based on price not theory.
I sounds like an ok strategy though.

Buy more of what is working for you, sell what is not working for you.
Life and investing can be simple.

Your strategy relies too heavily on picking the tops and bottoms of the market, even with mutual funds. If you invest consistently in a mix of 3 or more mutual funds, each with a slightly different focus in philosophy and investing goals, it will not matter what the market does. In fact, it is better, during your accumulation period if the market goes down. This allows you to accumulate more shares of the mutual funds, which is, long-term, more valuable than trying to pick buy and sell times. This is due to the benefits of dollar cost averaging which lowers the average cost of your shares over time.

Value-based mutual funds out-perform the market, over time, because of the way they are purchased. So you will want to weight them a bit higher in your fund mix. Global funds with proven track records are usually a good idea, too.

A key to remember is that in the total market, over time, there is no risk, only volatility. If you do not act on fear, you will amass wealth regardless of whether the market goes up or down.