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View Poll Results: Retired, are you rebalancing in this market?
No rebalance for me until market improves (donít want to catch falling knife) 11 13.75%
Not yet, but I will rebalance as soon as I reach my rebalance bands, threshold, or planned date for it. 39 48.75%
Yes, I have already rebalanced as per my guidelines 21 26.25%
Im not sure what I will do at this time. 9 11.25%
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Old 09-21-2022, 08:20 PM   #21
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Rebalance once per year on a certain day or week, but NOT after a major market correction or during volatility.
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Old 09-27-2022, 03:48 PM   #22
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The idea behind rebalancing is to buy low, sell high. Stuff that has gone down can be bought cheaply, and vice versa.

This usually works well because stocks and bonds tend to move in opposite directions. So you could sell expensive stocks to buy cheap bonds. But this year, it's not working quite as well. Stocks and bonds are BOTH down. Right now SPY is down about 23%, and TLT is down 30%.

If they were both down the same amount, there would be nothing to rebalance. A 7% difference might make it worth the effort, but IMO it's not critical.
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Old 09-27-2022, 04:02 PM   #23
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I have modified my rebalancing rules once my cash flow was such that I didn't have to maximize my returns as much. As I approached retirement I worked to a 50:50 AA. That worked for me at the time. I couldn't bring myself to rebalance as often during the big bull market so I changed to a plan where equities can float between 50 and 60%. I was above 60% back in January and pulled enough out of stocks in to cash to draw at least 3 years of RMDs. I like to think that was great insight but it was just following my rules. I now have enough cash that I can ride out at least 3 years of down turn without selling anything. If my equities drop below 50% I will put some of the extra cash back into the market. With stocks and bonds both going down my AA does seem to be changing much right now.
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Old 09-27-2022, 09:51 PM   #24
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Quote:
Originally Posted by GaryInCO View Post
The idea behind rebalancing is to buy low, sell high. Stuff that has gone down can be bought cheaply, and vice versa.



This usually works well because stocks and bonds tend to move in opposite directions. So you could sell expensive stocks to buy cheap bonds. But this year, it's not working quite as well. Stocks and bonds are BOTH down. Right now SPY is down about 23%, and TLT is down 30%.



If they were both down the same amount, there would be nothing to rebalance. A 7% difference might make it worth the effort, but IMO it's not critical.


In a non volatile market thatís true and why you should do it annually or on an interval that you like. In a volatile market correction youíre behind the eight ball. ( too late to make it most effective for you ). Soon it will just correct quite a bit upwards again and now your AA is all askew again. Doh.
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Old 09-28-2022, 08:28 AM   #25
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Will probably wait till the end of the year and rebalance while making yearly spending withdrawal.
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Old 09-29-2022, 01:39 PM   #26
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Quote:
Originally Posted by GaryInCO View Post
The idea behind rebalancing is to buy low, sell high. Stuff that has gone down can be bought cheaply, and vice versa.

This usually works well because stocks and bonds tend to move in opposite directions. So you could sell expensive stocks to buy cheap bonds. But this year, it's not working quite as well. Stocks and bonds are BOTH down. Right now SPY is down about 23%, and TLT is down 30%.

If they were both down the same amount, there would be nothing to rebalance. A 7% difference might make it worth the effort, but IMO it's not critical.
My cash bucket % seems to be moving up. Mainly because my stocks/bonds pecentages have been moving down. Not a good thing!

I suppose I should be rebalancing by spending cash to buy stocks/bonds. Can't seem to make myself do that.
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Old 09-29-2022, 04:14 PM   #27
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If I added money to stocks it would be when the SP500 moved to some technical level like above its 12 month moving average. Worked OK for me in 2009 when I rebalanced in June. You will not catch the bottom with this method and no guarantees of success either.

I actually reset down to a 60/40 ratio when the SP500 moved up to "just" down -10% for the year. Glad I did and should have gotten more aggressive at selling as is obvious now.
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