Year Start Rebalancers

[79protons]

I'm glad to be cutting back my stock allocation, because people's perceptions of the equity outlook is way too rosy.

a flat market for the past 10 years makes thinking equity might return to some form of incremental increase rosy?

to me the rosy outlook is thinking inflation will remain at 0% and thus your 2% yeild fixed income is safe.

 

[audreyh1]

My last rebalance was August of 2009.

Audrey

 

[W2R]

I rebalanced on January 1st, 2011, but because of the timing Vanguard hadn't actually done anything before closing today. Very nice.

 

[audreyh1]

I rebalanced on January 1st, 2011, but because of the timing Vanguard hadn't actually done anything before closing today. Very nice.

It always works that way with mutual funds. You get the end of day pricing.

Oh wait - you were pulling our legs! Got me!

Audrey

 

[W2R]

Yes, Audrey, I knew it worked that way with mutual funds ("because of the timing", see my post).

Did you miss the point? Not to belabor it, but my equity mutual funds are bringing me a higher value than last week's price, due to today's small market spike which I had not anticipated. Which I happen to think is nice, oh silly me.

Guess I should get out that crystal ball again.

 

[Alan]

Yes, Audrey, I knew it worked that way with mutual funds ("because of the timing", see my post).

Did you miss the point? Not to belabor it, but my equity mutual funds are bringing me a higher value than last week's price, due to today's small market spike which I had not anticipated. Which I happen to think is nice, oh silly me.

Guess I should get out that crystal ball again.

Oh, oh, out of balance already

 

[W2R]

Oh, oh, out of balance already

I know, it's killin' me! Oh well.

I am being VERY good and not saying the "W" word about that little spike in the market today, too, in case anyone noticed.

 

[Alan]

I am being VERY good and not saying the "W" word about that little spike in the market today, too, in case anyone noticed.

Don't you dare!!

I won't be re-balancing until my 401k rollover is complete, which is going to take several days / weeks as my employer plan will only do it via paper and snail mail.

 

[W2R]

Don't you dare!!

I won't be re-balancing until my 401k rollover is complete, which is going to take several days / weeks as my employer plan will only do it via paper and snail mail.

Well, the Dow only went up 93 points. It's not like it was, oh, say, up 100 points or anything like that.



Besides, maybe it will be up even more by the time your paperwork goes through....

 

[audreyh1]

Yes, Audrey, I knew it worked that way with mutual funds ("because of the timing", see my post).

Did you miss the point? Not to belabor it, but my equity mutual funds are bringing me a higher value than last week's price, due to today's small market spike which I had not anticipated. Which I happen to think is nice, oh silly me.

Guess I should get out that crystal ball again.

But it ALWAYS works this way. You ALWAYS get the next trading day pricing when you rebalance. You never get the pricing from which you do your rebalancing calcs.

It can help, it can hurt. You never know - there is no way to anticipate.

YOU may have computed your rebalance on Jan 1, 2011 and entered the orders - but with the markets closed, nothing actually gets done that day. Even if the markets had been open on Jan 1, you still would have gotten end of day pricing.

Your posting made it sound like it was Vanguard who "didn't actually do anything" to implement your rebalance instructions until market close - as if they had a choice. Then I decided you were making a joke.

I guess I otherwise didn't understand why you point out any "timing" since it always works this way?

Audrey

 

[audreyh1]

Oh, oh, out of balance already

Now that's the joke!

 

[obgyn65]

I am not rebalancing. Still 100% in CDs, money market or equivalent. Still saving $100K+ a year. Hoping to retire in 2012.

 

[audreyh1]

I am not rebalancing. Still 100% in CDs, money market or equivalent. Still saving $100K+ a year. Hoping to retire in 2012.

If your AA is 100% a single asset class - you never need to rebalance! LOL!

Audrey

 

[obgyn65]

When I retire I hope to have some time to study investing a lot more.

I count on you guys to educate me.

If your AA is 100% a single asset class - you never need to rebalance! LOL!

Audrey

 

[audreyh1]

OUCH!

Taxable capital gains from rebalancing a little higher than I anticipated. I guess my cost basis is quite a bit lower now...

It's been so long since I rebalanced by selling equities that I forgot how big the tax bit can get. Ouch!

Well - I guess the last time (16 months ago) I did sell equities but I was able to realize tax losses to offset gains. And the two times before that I was buying equities into a down market.

I'm definitely NOT rebalancing every year unless my portfolio AA gets out of whack enough to hit my rebalance triggers. That's the nice thing - I can go a fairly long time without rebalancing unless there is a pretty strong market move one way or the other.

Audrey

 

[Bestwifeever]

When I retire I hope to have some time to study investing a lot more.

I count on you guys to educate me.

I'm waiting for Brewer to retire so I can subscribe to the newsletter I hope he starts!

 

[audreyh1]

I did my start of the year rebalancing today. Nice to lock in the 15% gain from last year. Of course if I hadn't rebalanced last year, I would have made a few thousand more in 2010.

I went down one percent to a 53% stock allocation.

I guess you "picked" a good day to rebalance after all - LOL! Congrats!

Audrey

 

[kyounge1956]

I checked my AA Dec 30, but it was still close to the targets, so I didn't do anything. Yesterday I got my automatic transfers from checking account to Roth IRA set up for this year. Regular contributions to the 457 plan don't have to be re-done annually, and for 2011, I've decided to omit the over-50 catchup contributions (which do have to be re-requested every year) at least to start off with. I had been test-driving my age 53 pension for the last two years, and that budget is just too tight for comfort. So this year, I am basing my budget on the pension I'd get if I retired on my birthday. There's a significant upward kink in benefits at age 55, which is how old I'll be in just a little while.

 

[RonBoyd]

I'm waiting for Brewer to retire so I can subscribe to the newsletter I hope he starts!

+1

 

[Moemg]

No need to pick a date to rebalance on just wait for the Whee threads and rebalance then . It works every time .

 

[TromboneAl]

But it ALWAYS works this way. You ALWAYS get the next trading day pricing when you rebalance. You never get the pricing from which you do your rebalancing calcs.

If you really want to get OCD about it, you can do your rebalancing calculations a few minutes before the market closes, and do your exchange just before the bell.

 

[dm]

Im at 68% stocks to 32% fixed. The problem is I forgot what my target was.

 

[audreyh1]

If you really want to get OCD about it, you can do your rebalancing calculations a few minutes before the market closes, and do your exchange just before the bell.

Except that you don't know your mutual fund NAVs yet. You have to guesstimate. That is pretty much impossible unless you are using like an S&P500 or Wilshire 5000 type index fund.

Audrey

 

[easysurfer]

That's why I just rebalance on my own time schedule. Usually as soon as the new year starts otherwise the rebalancing becomes a chore -- kind of like the longer I wait to put away the Christmas decorations, the more it seems like a chore..so I just do it to get that over with.

If I wait for the right time (January effect? etc.) that makes me feel like I'm trying to time things..which goes against my approach.

 

[nico08]

When you rebalance, do you take into account that $100K in tax deferred isn't worth as much as $100K in taxable?

Can someone explain to me why $100K in tax deferred isn't worth as much as $100K in taxable. I don't quite understand the logic/reasoning behind that statement.

Thank you.