Equities Return are Stellar - should I withdraw some now or wait end of year?

[RetiredHappy]

My idea of rebalancing is to sell the losers when I need money. I don't really have AA because we have mainly equities. Bonds are legacy from when our accounts were managed by ML and we have been selling them off whenever we need money.

 

[W2R]

Definition of rebalancing:

https://www.investopedia.com/terms/r/rebalancing.asp

Rebalancing refers to the process of returning the values of a portfolio's asset allocations to the levels defined by an investment plan. Those levels are intended to match an investor's tolerance for risk and desire for reward. [...]

 

[audreyh1]

My idea of rebalancing is to sell the losers when I need money. I don't really have AA because we have mainly equities. Bonds are legacy from when our accounts were managed by ML and we have been selling them off whenever we need money.

That’s not rebalancing. When you rebalance you sell some of the winners and buy some more of the losers as needed to get back to your target AA.

 

[RetiredHappy]

That’s not rebalancing. When you rebalance you sell some of the winners and buy some more of the losers as needed to get back to your target AA.

That's what I had said. We are almost 100 percent equities and we like the mix. We don’t rebalance.

Since Fidelity Retirement Planning tool shows that we will end up with a large portfolio, I see no need to change.

 

[HI Bill]

I don't really have AA because we have mainly equities.

You may not have a traditional Stock/Bond AA, but you probably own different classes of assets unless you own only one stock, or one class of stock (large cap, small cap, value, etc.). Exclusive of bonds, the Callan Periodic Table of Investment Returns (link below) lists Large Cap Equity, Developed Ex-US Equity, Small Cap Equity, Emerging Market Equity, Real Estate, and Cash Equivalent. The table clearly shows the importance of owning different asset classes, as none perform at the top of the table year after year.

https://www.callan.com/research/2023-classic-periodic-table/

 

[RobLJ]

I do scrape gains from some funds during the year that have shot up surprisingly, rather than selling funds that are lagging; those I will have to add to unless they catch up.
One of my core funds, Fidelity Contra is up 45% year over year (a surprising overperformance over the S&P), and I have scraped money from it to fund both withdrawals and bonds (and a bit in mid cap), to rebalance. I've taken a bit of gains (about 20% of gains each time) 3 times over the last year.
I guess if you don't rebalance at the same date every year, that could be considered the dreaded "market timing" but it doesn't really seem that way. Selling Contra and some from the S&P index reduced my stock allocation from 68% to 65% (allocation should be 63-65%); probably I would have had to sell at bit more if I hadn't done it earlier--however I sold a bit last week and it is down 5% this week, so I throw up my hands to the anecdote.

I don't think there is an ideal way to rebalance/sell for withdrawals. Doing it at the same date every year has the advantage of simplifying things, however. You still have to decide what to sell, however.

 

[RetiredHappy]

You may not have a traditional Stock/Bond AA, but you probably own different classes of assets unless you own only one stock, or one class of stock (large cap, small cap, value, etc.). Exclusive of bonds, the Callan Periodic Table of Investment Returns (link below) lists Large Cap Equity, Developed Ex-US Equity, Small Cap Equity, Emerging Market Equity, Real Estate, and Cash Equivalent. The table clearly shows the importance of owning different asset classes, as none perform at the top of the table year after year.

https://www.callan.com/research/2023-classic-periodic-table/

We have about 20 to 30 different ETFs in each account. They are fairly balanced in the sense of they cover total market, foreign, emerging market, different sectors, tech, value etfs etc.

 

[OldShooter]

We have about 20 to 30 different ETFs in each account. They are fairly balanced in the sense of they cover total market, foreign, emerging market, different sectors, tech, value etfs etc.

Why work so hard? VT/VTWAX does it all.

 

[RetiredHappy]

Why work so hard? VT/VTWAX does it all.

Legacy from when ML was managing our portfolio. We got rid of bond etfs but kept the others. We added a couple of our own.