Asset allocation should be adjusted as circumstances change. For example, after one asset class has had a strong upward move, you may need to adjust your asset allocation. This also initiates selling when the market is high, although not necessarily at the top. For example, if you previously had 50% of your portfolio in stocks, and the market moved up 12 % during the year, the stock portion would have probably increased to an amount over 50%. In this scenario, you would sell some of your stock portfolio to get to the desired percentage based upon your asset allocation. An annual assessment of your asset allocation should be adequate. This is certainly not something that you want to do with every market move.
There are other times when asset reallocation should be considered. I will write more about this topic. In the meantime, take a look at your own asset allocation and see if it suits you.