Reply
 
Thread Tools Search this Thread Display Modes
Rebalancing the Portfolio - What is your approach
Old 05-14-2007, 06:25 PM   #1
Thinks s/he gets paid by the post
chinaco's Avatar
 
Join Date: Feb 2007
Posts: 3,052
Do you just rebalance your portfolio at the same time once or twice a year (time-based)? Or do you use a threshold (tolerance) base approach approach?

http://www.fpanet.org/journal/articl...p0406-art3.cfm

http://www.fpanet.org/journal/articl...p0407-art3.cfm


__________________
Disclaimer: I make no warranty or guarantee about the accuracy or completeness of this information. I am not a financial planner, my comments only represent my opinion.
chinaco is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Re: Rebalancing the Portfolio - What is your approach
Old 05-14-2007, 06:38 PM   #2
Thinks s/he gets paid by the post
clifp's Avatar
 
Join Date: Oct 2006
Posts: 2,998
It appears based on those studies and others I've seen that method doesn't matter a great deal. Personally, I favor making small correction during the year, and I only make large changes when I get more than 5% out of whack. Which for me only happened at the end of 99 and early 2000
clifp is offline   Reply With Quote
Re: Rebalancing the Portfolio - What is your approach
Old 05-14-2007, 06:57 PM   #3
Thinks s/he gets paid by the post
Alan's Avatar
 
Join Date: Jul 2005
Location: Baton Rouge
Posts: 2,000
Send a message via MSN to Alan
June and January each year unless I am 5% out of balance (but I can't remember the last time that happened)

Currently stocks are 1.5% higher than target but if that changes and it goes down I won't worrry about missing my chance.
__________________
Age and treachery will usually overcome youth and ability

Countown clock is at 12 weeks to be SIRE'd
Alan is offline   Reply With Quote
Re: Rebalancing the Portfolio - What is your approach
Old 05-14-2007, 08:33 PM   #4
Thinks s/he gets paid by the post
 
Join Date: Sep 2005
Posts: 2,180
I'd read that longer rebalancing periods, like 2-3 years, resulted in better long run portfolio returns.

As most of my money is in taxable accounts, I'm not going to rush out every time the calendar turns to generate income for the government by rebalancing. I figure I'll rebalance when my asset allocation gets more than 5% out of whack +/-.
. . . Yrs to Go is online now   Reply With Quote
Re: Rebalancing the Portfolio - What is your approach
Old 05-14-2007, 09:23 PM   #5
Thinks s/he gets paid by the post
 
Join Date: Jan 2006
Posts: 3,068
I wait for a threshold out of balance +/- 5%, and try to wait at least a year between rebalances. I've read that 18 months was a better interval.

Audrey
audreyh1 is offline   Reply With Quote
Re: Rebalancing the Portfolio - What is your approach
Old 05-15-2007, 11:50 AM   #6
Thinks s/he gets paid by the post
SecondCor521's Avatar
 
Join Date: Jun 2006
Location: Boise
Posts: 1,479
I'm 100% stocks so I don't rebalance at all.

2Cor521
__________________
"At times the world can seem an unfriendly and sinister place, but believe us when we say there is much more good in it than bad. All you have to do is look hard enough, and what might seem to be a series of unfortunate events, may in fact be the first steps of a journey." Violet Baudelaire.
SecondCor521 is online now   Reply With Quote
Re: Rebalancing the Portfolio - What is your approach
Old 05-15-2007, 11:52 AM   #7
Recycles dryer sheets
 
Join Date: Sep 2006
Posts: 474
Quote:
Originally Posted by SecondCor521
I'm 100% stocks so I don't rebalance at all.

2Cor521
not even small caps vs large, domestic vs international?
TJ
teejayevans is offline   Reply With Quote
Re: Rebalancing the Portfolio - What is your approach
Old 05-15-2007, 01:46 PM   #8
Thinks s/he gets paid by the post
SecondCor521's Avatar
 
Join Date: Jun 2006
Location: Boise
Posts: 1,479
TJ,

My portfolio is all* in VFINX or VTSMX, so I get a tiny bit of small cap in the latter. International exposure is only through the foreign earnings of those US companies in the aforementioned funds.

2Cor521

* Except: some of my kids' college funds are in a "target 20XX" type of 529 investment, and I have my emergency fund of 5 months expenses in a HYS account. And my new 401(k) is in SWPIX, but that's less than 1% of my portfolio at the moment.
__________________
"At times the world can seem an unfriendly and sinister place, but believe us when we say there is much more good in it than bad. All you have to do is look hard enough, and what might seem to be a series of unfortunate events, may in fact be the first steps of a journey." Violet Baudelaire.
SecondCor521 is online now   Reply With Quote
Re: Rebalancing the Portfolio - What is your approach
Old 05-15-2007, 02:16 PM   #9
Thinks s/he gets paid by the post
jIMOh's Avatar
 
Join Date: Apr 2007
Location: Milford, OH
Posts: 1,341
Twice a year.

June 1 I modify contribution percentages only.
Dec 31 I reset contribution percentages, then rebalance by buying/selling.

In June most years the target pecentages are off by around 1% per category... so it is a minimal move from June-December. In December there is always buying and selling.

This prevents me from reacting to hiccups thru year (up 1-2% in a day or down 1-2% in a day).
__________________
Light travels faster than sound. That is why some people appear bright until you hear them speak. One person's stupidity is another person's job security.
jIMOh is offline   Reply With Quote
Re: Rebalancing the Portfolio - What is your approach
Old 05-15-2007, 02:38 PM   #10
Dryer sheet aficionado
 
Join Date: Mar 2007
Posts: 26
Send a message via Yahoo to lem1955
I'm still working:

401(k) is professionally managed by employer trustees. Money is added every two weeks and invested according to a target portfolio. Larger rebalancing done when needed +/- 5%. I set a target and plan for rebalancing SO and my IRA's once a year, and then check them before actually contributing. Then I don't examine them for balance until next year. Outside of those retirement accounts, I have only a money market savings account - 3 month emergency fund and a small taxable balanced mutual fund.
lem1955 is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off

Forum Jump

Similar Threads
Thread Thread Starter Forum Replies Last Post
SWR - Amortize your portfolio RgrGd FIRE and Money 5 03-28-2007 11:29 AM
Portfolio Rebalancing Rollie FIRE and Money 3 12-07-2006 08:00 PM
More Buckets, Portfolio Allocations, and Rebalancing tomz FIRE and Money 3 10-11-2006 05:25 PM
Rebalancing portfolio Bimmerbill Young Dreamers 10 02-24-2006 07:55 PM
Don't waste your money rebalancing REWahoo FIRE and Money 48 07-08-2005 12:38 PM


Other Social Knowledge forum communities:
Cooking Forum - Sailing Forum - Early Retirement - Airstream Trailer - Aquarium Forum - Royal Forum - Book Forum - Volkswagen Touareg Forum - Jeep Wrangler Forum - Whitewater Kayaking & Rafting Forum - Fiberglass RV Forum - RV Forum - Truck Conversion - U2 Music Forum
Investing Channel
All times are GMT -6. The time now is 06:35 PM.
Powered by vBadvanced CMPS v3.0.1
Powered by vBulletin® Version 3.8.4
Copyright ©2000 - 2009, Jelsoft Enterprises Ltd.
Search Engine Friendly URLs by vBSEO 3.3.0