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Rebalanced today
Old 03-13-2014, 11:23 AM   #1
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Rebalanced today

Per my plan I rebalance 3 times a year and mid march is one of them.

The sells were so easy.

The buys were so tough. I guess that's the way it always goes.

anyway I am good to go until summer
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Old 03-13-2014, 11:30 AM   #2
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Congrats, I am sure we all share your buy/sell sentiments.

I am curious how you arrived at 3 times a year? Not advocating any particular approach, there are many viable methods including 3 times a year, interesting reason why?
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Old 03-13-2014, 11:40 AM   #3
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Congrats, I am sure we all share your buy/sell sentiments.

I am curious how you arrived at 3 times a year? Not advocating any particular approach, there are many viable methods including 3 times a year, interesting reason why?

No real great reason. Been thinking of changing it to twice and than after some years just once.
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Old 03-13-2014, 11:50 AM   #4
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DW cashed in a bunch of stock options last week and the money is now safely in our savings account. It felt good locking in some gains here.
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Old 03-13-2014, 11:58 AM   #5
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That is a pretty frequent rebalancing schedule. Is there a percentage deviation from your target allocation that needs to happen before you would rebalance? I'm within .3% of my target from the past quarter, so I can't imagine what rebalancing would accomplish.
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Old 03-13-2014, 12:17 PM   #6
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DW cashed in a bunch of stock options last week and the money is now safely in our savings account. It felt good locking in some gains here.
I agree, it does feel good locking in gains and I felt pretty good about selling $50K of my portfolio to start my house fund recently. Since I was selling anyway, I sold amounts that allowed me to rebalance in the process.

Normally I just rebalance once a year, or when my AA drifts by more than a certain amount. Like Ready, I find that so far this year my AA had not drifted enough to trigger a rebalance.
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Old 03-13-2014, 12:21 PM   #7
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I agree, it does feel good locking in gains and I felt pretty good about selling $50K of my portfolio to start my house fund recently. Since I was selling anyway, I sold amounts that allowed me to rebalance in the process.

Normally I just rebalance once a year, or when my AA drifts by more than a certain amount. Like Ready, I find that so far this year my AA had not drifted enough to trigger a rebalance.
Out of curiosity, what's your target AA?
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Old 03-13-2014, 12:34 PM   #8
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Out of curiosity, what's your target AA?
45:55 (equities:fixed).
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Old 03-13-2014, 01:06 PM   #9
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I only review quarterly and still use the 5/25 band rule, mostly to reduce the number of taxable events. I have gone more than a year between rebalancing transactions quite a few times.

But I can argue the merits of annual or other set frequency methods just as easily - as long as it's not as one of my former employees did, weekly to the penny with no bands at all (if an asset class was off 0.1%, he'd adjust)! Fortunately all he had was in a 401(k) so he didn't suffer the tax consequences of such a stupid frequent buy/sell practice. I always privately hoped the 401(k) admin would force him to stop, and for all I know they did eventually.
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Old 03-13-2014, 04:01 PM   #10
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I shoot for rebalancing just once a year on Jan 2. Set it and forget it.
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Old 03-13-2014, 04:11 PM   #11
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....But I can argue the merits of annual or other set frequency methods just as easily - as long as it's not as one of my former employees did, weekly to the penny with no bands at all (if an asset class was off 0.1%, he'd adjust)! Fortunately all he had was in a 401(k) so he didn't suffer the tax consequences of such a stupid frequent buy/sell practice. I always privately hoped the 401(k) admin would force him to stop, and for all I know they did eventually.
If he could rebalance that frequently, you obviously were not giving him enough work to do.
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Old 03-13-2014, 04:13 PM   #12
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No real great reason. Been thinking of changing it to twice and than after some years just once.
Usually you are better off doing it no more often than once a year. 18 months for taxable accounts is ideal according to some studies, but that is somewhat impractical for those of us who need to withdraw annually. Fine for the accumulator.

I would encourage you that less is more in this case.

For me, in years where my retirement fund AA ends up being not that much out of balance when I do my annual withdrawal, I skip the rebalancing because I figure it's just not worth the tax consequences. If I've gotten large capital gains distributions (which I take in cash rather than reinvest) after a good equity year my AA sometimes kind of rebalances itself - or close enough.

Yep - the trimming is always the easy part. The buying is always the hard part.
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Old 03-13-2014, 04:18 PM   #13
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If he could rebalance that frequently, you obviously were not giving him enough work to do.
He had to do it on his own time, he didn't have internet access at work at the time, though he may nowadays (not my prob anymore).
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