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Old 11-16-2013, 09:06 AM   #41
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FWIW - a lot of rebalancing occurs naturally for me in December. That's when most of my equity funds pay out distributions, and I let them go to cash. In a better stock year, the capital gains distributions tend to be higher, so stock funds get trimmed more.

Then I finish the rebalancing in January when I take my withdrawal and clean up the chaos left by the year-end distribution party.
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Old 11-16-2013, 10:20 AM   #42
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Originally Posted by prototype View Post
After 2013 being a banner year for equities (20+ % in my case) I am now at roughly at 63%/37% equities/bonds (~5% cash not included). Since my planned and actual AA a year ago was a 55-60%/45-40% range, I am wondering if it is time to do a 6 percent (or so) re-balance or just let it be. (Age 58, retired and not getting any younger).
We are 25% equities.
we have re-balanced a number of times.
Ton of CD's
and some Bonds

The most stocks we have had in last 10 yrs was 35% .

It works for us
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Old 11-16-2013, 03:06 PM   #43
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Okay.......

I use 25% rebalance bands, so, e.g. a 5% allocation can vary between 3.75% and 6.25% before needing to be adjusted. This keeps me from trading too actively. Still not sure why picking a random day to rebalance back to your "ideal" allocation is any better, but to each his/her own.
This is a different but just as rational rebalancing discipline as a yearly or semi-annual or bi-annual date. I allow 5% over target, so I'm like you. I'm willing to cheat a little if sector is in a hot momentum swing up, but I'll pull the trigger if it moves back down over a month. Markets can stay irrational longer than you can stay sane. I'm letting biotech continue to run, for example--if it goes down 5% that reduces the two year gains to 105% rather than 110%.
Mini-timing.
YMMV--I've used this for the last 10 years and it's worked fine for me.
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Old 11-16-2013, 04:48 PM   #44
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This is a different but just as rational rebalancing discipline as a yearly or semi-annual or bi-annual date. I allow 5% over target, so I'm like you. I'm willing to cheat a little if sector is in a hot momentum swing up, but I'll pull the trigger if it moves back down over a month. Markets can stay irrational longer than you can stay sane. I'm letting biotech continue to run, for example--if it goes down 5% that reduces the two year gains to 105% rather than 110%. Mini-timing. YMMV--I've used this for the last 10 years and it's worked fine for me.
Used to rebalance at +/- 10%, but found, particularly during the Great Recession, that during massive swings I was losing upside, and catching falling knives on the downside...

Plus, it's all part of my "don't just do something, stand there" philosophy.
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Old 11-16-2013, 05:44 PM   #45
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Used to rebalance at +/- 10%, but found, particularly during the Great Recession, that during massive swings I was losing upside, and catching falling knives on the downside...

Plus, it's all part of my "don't just do something, stand there" philosophy.
+1 - but I just (almost) doubled my "out of range" limits to reduce the rebalancing frequency.
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