I am probably going to switch over to the TD E-series index funds in a Canadian Couch Potato-type portfolio:
25% TD Canadian Bond Index
25% TD Canadian Equities Index
25% TD US Equity Index
25% TD Internation Equity Index
Two questions I have about this:
1. when you are dividing up by 25%, is that the total dollar value, or equal number of shares in each index?
2. When you re-balance, do you balance the dollar value or the number of shares?
I had been going along assuming the % was of the total dollar value, but I was reading an article about re-balancing the portfolio and I came across this paragraph:
"Even when you're on an investment plan, your portfolio can begin to drift. Due to the way that funds are operated, and to market conditions, you might end up with more shares of one fund than another. This can bring your portfolio out of balance, and result in sub-par performance.
In order to get back on track, once a year you should rebalance your portfolio back to your original asset mix.
(my bolding).
And I thought, oh, geez it's the number of shares that need to be equal?
Please advise!