Fedup
Thinks s/he gets paid by the post
I did a little bit of nibbling at Emerging market yesterday. Last time I sold VWO, it was $45, now it’s around $40+.
I tend to take some money from individual stock picks off the table when the stock has more than doubled and has gone logarithmically. Two I am pruning are MED, and SYY.
My goals are to invest part to more than make up the dividends lost, get some new passive income, and maybe buy into a fallen sector, or fallen angel stock.
Mostly I rebalance by putting new cash flow into areas I am a bit low in. Have read that Asia and Russia are hurting, so maybe time to look there again.
Maybe it's just me, but it seems like there are two kinds of rebalancers on this thread:
1. Those like me and W2R and pb4uski and others who have a predefined AA and just rebalance to that AA periodically. We probably would call ourselves passive investors or indexers.
2. People who use rebalancing as somewhat of a euphemism for active trading, possibly around the edges. Perhaps gcgang, Montecfo, copyright1997reloaded?
Personally I wonder what people in the second category would consider to be their target AA and how frequently that changes/drifts/adjusts. My guess for the latter half of that question would be nearly constantly in some cases.
No judgments, just curiosity.
I don't know if this is considered rebalancing, but I'm increasing certain areas of my portfolio such as mid/small cap stocks, foreign stocks and growth stocks--all with Vanguard ETFs. I've been a bit hesitant about making these moves because the last time that I did this was about three months before the Great Recession began.
Maybe it's just me, but it seems like there are two kinds of rebalancers on this thread:
1. Those like me and W2R and pb4uski and others who have a predefined AA and just rebalance to that AA periodically. We probably would call ourselves passive investors or indexers.
2. People who use rebalancing as somewhat of a euphemism for active trading, possibly around the edges. Perhaps gcgang, Montecfo, copyright1997reloaded?
Personally I wonder what people in the second category would consider to be their target AA and how frequently that changes/drifts/adjusts. My guess for the latter half of that question would be nearly constantly in some cases.
No judgments, just curiosity.
No, that is not rebalancing, it’s changing your asset allocation. What you are practicing is Tactical Asset Allocation, increasing the allocation to areas you perceive as undervalued.
Prior to the last election, my prediction was that the "other" candidate would win. I moved heavier into large growth mutual funds. The reasons: 1) Large companies were tending to contribute to that party, 2) Large companies can survive the regulatory onslaught. I think they actually prefer overbearing regulations since it wipes out competition from smaller companies.
Then the election happened and all the indices tumbled the next morning. My thinking was that the victor, based on what he was saying, would favor small as well as large companies (taxes, regulations).
I immediately re-balanced to small cap mutual funds, but kept about 25% of the equities in large caps. Small caps, which were hammered before the election have been outperforming large caps since then.
I will keep an eye on the the next election results.
I see no reason to get into anything other than short term bonds while interest rates are rising. Short term bond funds might be a good temporary parking lot for asset preservation.