I have yet to read a study that shows re-balancing more often would better grow my stache, and outside of that it appears to approach close to market timing decisions if I'm choosing what percentages matter and when to redo it.
I'm not sure if I agree with your market timing comment on this one. How is it market timing if you get off by 3% and you sell some stock to buy bonds? You're not trying to time the market, your trying to rebalance your funds in reflection of the market changes. If the market had stayed stable you wouldn't have made any changes. I mean the whole point of rebalancing is to sell good performing shares to buy more poor performing shares (esentially sell high, buy low).
As far as I can tell, all of my funds don't charge me to rebalance my funds, but a couple of them only allow me to rebalance up to 12 times a year. I usually rebalance once a year or less.
Sorry, that definitely isn't clear to what I meant. I was trying to point out that if I didn't have a specific determination of what 3 percent off meant I would be deciding it without being emotionless (listening to market tips etc). Not the same thing I alluded to above.
Ah - I got ya. Thanks for the clarification. I'm not sure how you count the 3% matters very much. Heck - you could put in a correction order on a mutual fund and then by the next closing bell when the order is actually processed you might be within 3% again. It's not perfect. It's more the sentiment of putting the order in when you're about 3% off.
It's just that I'm starting to get curious if I should be doing something in minor market corrections. Sounds like most here don't do anything.
Example:
stock/bond/intl/esop
On 8/17/2015: 59.16/19.49/19.81/1.54 => 1.54 point differential
On 8/24/2015: 57.51/21.19/19.74/1.56 => 3.94 point differential
On 8/25/2015: 57.96/20.69/19.81/1.54 => 2.92 point differential
In that one week my portfolio dropped 8.10% and between the stock and bonds combined, it deviated more than 3% of nominal assett allocation. What is interesting though - if I did put in the order on 8/24, the market would have corrected slightly - and I wouldn't have had a 3% differential. I'd be in the right ballpark though.
It's difficult to tell if I had put in the order on 8/24 if I'd be better off today, or not, because of transacction. It is also interesting to note that during this dip - there was a inverse correction that would have happened in October meaning I may have needed to reallocate again to something closer to the previous allocation.