The temporary volatility bumped the portfolio about 10k extra with the Golden Butterfly setup. Re-balanced twice in a week and captured some gains. I know you should wait for an asset class to get to 35%, but that is boring.
So, is this an effective strategy? My US holdings (in CAD) are at all time high due to low exchange rate. If I sell US now, I could rebalance to CAD bonds, but then tomorrow when the exchange goes back up, I'd then be lower on US holdings, snd earning less US dividends. Am I better off to buy and hold, but just buy bonds because I'm under allocated?
IPS says to balance through contribtions and once per year in March if off by more than 5%
A rules based portfolio like the GB (& the Permanent Portfolio that it is based upon) gets part of it's outsized gains by taking advantage of volatility like happened following Brexit. The idea is that the different parts of the portfolio are either not correlated with the others, or are sometimes counter correlated. (Gold is mildly counter correlated to large cap stock indexes, historically, as a 'flight to safety' kind of asset) The way it works, as designed by Harry Browne, is there is a trigger rule that results in a rebalance. Harry Browne recommended either if a single asset class varies by more than 10% of the total portfolio or if any two assets are more than 10% out of wack with each other. In the case of Brexit, major stock indexes dropped rather suddenly, and gold rose; so with a target percentage of 20% for each of 5 asset classes; once Large Cap Stocks dropped to 10% or Gold rose to 30% individually, or they reached more than a 10% span between them (which is what actually happened) the rule would require a rebalance, thus selling gold while it's high & buying Large Cap while it's low (also a bit of Small Cap). As the markets regained their senses last week, and investors realized how silly they were, the price of gold pulled back a little, but the Large Cap stock asset class rose to higher than where it started, and (if it got to 30% of the overall portfolio, I'm not sure that it did, because it hasn't made it there yet for me) then another rebalance would be called for. Thus, selling Large Caps while high to buy Gold back while low. If these rules are followed without emotion, the theory goes, that no matter what condition the market is in, you are only buying an asset class when it's out of season & selling high. The original Permanent Portfolio only had 4 equal classes, so each target would be 25% with a range of 15% to 35%. Harry Browne didn't know if the rule should be 10% or something else, but he believed that such a rule was required to keep the emotion of the moment out of the decision making process. Another rule was, if the markets were low volatility, then the portfolio should be rebalanced at least once each year anyway.
EDIT: To fully answer your question, yes, a rules based rebalancing portfolio is, historically better than a buy & hold strategy of comparable asset classes.
You can also keep a PP or GB in balance by using contributions to buy the lowest percentage asset class, and it still works out that you are usually buying the asset class that is least in favor at the time. But why March, per se?