NW-Bound
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- Joined
- Jul 3, 2008
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I read again the transcript of the 2nd video clip. Something does not make sense to me. Bogle said
But if it is OK to rebalance in the short run like he said, how can one undo it for the long run?
"Well, I am not basically a rebalancer. In the long run, rebalancing is going to cost you because the higher-yielding, the higher-returning, asset is going to get to be a bigger and bigger part of the portfolio, and if you suppress it by rebalancing, you will almost definitely have a lower return over the long run.
In the short run, that's something else, and I think if people want to rebalance, that's fine."
Perhaps Bogle was thinking that if one rebalanced too often, he would miss out on a long secular run, such as the rise of equities in the 1980-2000 period.In the short run, that's something else, and I think if people want to rebalance, that's fine."
But if it is OK to rebalance in the short run like he said, how can one undo it for the long run?
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