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- Oct 13, 2010
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Based on the posts I've read here, it seems that the typical rebalancing technique here is to get a target "constant mix" (ie 60/40) asset allocation.
Just for fun, I wanted to see what people say they're doing on a slightly more detailed level. There have been discussions about "calendar" (i.e. once a year in January), and limit-based (whenever the allocation extends beyond a defined corridor).
Let's define, for this poll, "frequent calendar" as more than twice a year.
And symmetric means that the target is the center of a corridor, like +/- 5% as opposed to, say +8% and -2%. I think most people have symmetric bands, but I could see some people saying "I don't mind having a little more than my target of such and such asset class, but I can't sleep if I'm even a little below my target".
And we can talk about what the percent represents, since variations of that is not in the poll. Let's define it as the percent of the target. So if you had $1M and you had an AA target of 40% bonds with +/-5% bands, your $ limits would be $400K*1.05 and $400K*0.95.
If the market can do anything, and you still do nothing until your scheduled date, then you're calendar. But if the market can do something that causes you to take action, then you have something beyond a calendar-based trigger.
Outsourced would probably be where you are not a part of the decision making process, for instance, if the investment you're in does it for you, whereas no rebalancing would mean you have no formal AA targets.
Just for fun, I wanted to see what people say they're doing on a slightly more detailed level. There have been discussions about "calendar" (i.e. once a year in January), and limit-based (whenever the allocation extends beyond a defined corridor).
Let's define, for this poll, "frequent calendar" as more than twice a year.
And symmetric means that the target is the center of a corridor, like +/- 5% as opposed to, say +8% and -2%. I think most people have symmetric bands, but I could see some people saying "I don't mind having a little more than my target of such and such asset class, but I can't sleep if I'm even a little below my target".
And we can talk about what the percent represents, since variations of that is not in the poll. Let's define it as the percent of the target. So if you had $1M and you had an AA target of 40% bonds with +/-5% bands, your $ limits would be $400K*1.05 and $400K*0.95.
If the market can do anything, and you still do nothing until your scheduled date, then you're calendar. But if the market can do something that causes you to take action, then you have something beyond a calendar-based trigger.
Outsourced would probably be where you are not a part of the decision making process, for instance, if the investment you're in does it for you, whereas no rebalancing would mean you have no formal AA targets.
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