Before you make adjustments to your asset allocation decision, though, you should decide how you want to manage your portfolio. You can choose between actively or passively managing your portfolio. Momentum investing is based on active management. A passive approach doesn't continually focus on the valuation of the investment, but allows for periodic rebalancing to a target asset allocation. Passive portfolio management doesn't have to mean investing in market indices, but many passive investors gravitate toward the index funds for their low annual expense ratios, tax efficiency and the likelihood that they'll earn a return approximately equal to the return on the index.
Most people have active and passive components in their portfolio.
That's a good thing because most investors that follow the financial markets want to actively manage at least a portion of their portfolio. After all, Willie Nelson is not going to host a concert for you if your investments head south. Once you decide on a passive vs. active approach to the portfolio, you'll be better able to decide how to reallocate your investments. A passive investor will look toward more diversified funds, trying to tie the growth in the portfolio's value with the growth in the overall economy. A passive investor with your investment horizon shouldn't have that high of a cash allocation, though, and dollar-cost averaging into the market would be a reasonable way to increase the bond or stock allocations.