For those of you who regularly reallocate to get back to intended positions, is the first of the year when you do it?
I've been rolling over the 403b accounts into the IRA & consolidating too many funds into large positions in fewer indexes to take advantage of VG's Admiral share class.
Once that dust has cleared, I'll massage & tweak to get the AA on track.
June and December is when I do mine.
June is changing contributions only
December is buying/selling.
If something is outperforming in June, I drop the contributions to it by 1-5% (I will not eliminate contributions though). I contribute 10% or more to each fund anyway (some funds are as high as getting 45% of my contribution), so I just drop the percentage down if it's flying.
In December step 1 is making sure contribution percentages are correct (in line with desired allocation). If I dropped a fund from 25% to 15%, I bump back up to 15%. I then buy/sell based on the percentages as needed.
Thus far, I have not been off by more than 5% in June and 2% in December for any one piece of allocation.
All accounts I have are tax advantaged. Each acoount has a quite similar allocation (43% large cap domestic, 15% mid cap, 15% small cap domestic, 15% large cap foreign, 10% small cap foreign, 2% bonds).
Each rebalance increases the bond allocation by 1% as well (I sell 1% of each fund to add to current bond position). I will stop this when I get to 10% bonds (this will be year 2 of this shift, which will take 5 years to complete).