Can't Prune a Target Fund

[Nords]

The real reason to rebalance is to maintain risk at your personal comfort level. Which indicates that you should rebalance based on your allocation varying significantly from your target allocation levels -- not based on a schedule.

Bingo-- when an asset with a desired 25% allocation reaches 30% then it's probably time to find a way to rebalance... either by selling it for spending cash or by selling it to buy a lagging asset class.

I think 2008's reduction on cap gains to zero for the 10-15% income tax brackets is going to drive "rebalancing" activity through the roof.

 

[cute fuzzy bunny]

Is that reduction a sure thing or is it still negotiable? I've been expecting that to be rejiggered any time now. I didnt read through the last tax bill detail to see if that had been given any sort of approval to stay in place.

Sure would be a mighty fine time to change asset allocations and make major changes.

 

[Nords]

Is that reduction a sure thing or is it still negotiable?  I've been expecting that to be rejiggered any time now.  I didnt read through the last tax bill detail to see if that had been given any sort of approval to stay in place.

Well, I guess it could change anytime up through 15 April 2009... I don't remember reading about any changes this session either.

Yeah, I think 2008 will be the year that we sell off the rest of our Tweedy, Browne holdings with their $15/share cost basis. There'll be plenty of time in 2009 to buy something else at a discount!