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Learning, Sharing, and Teaching => Investor Alley => Topic started by: ImCheap on December 09, 2016, 10:15:54 AM

Title: Rebalance Time Anyone?
Post by: ImCheap on December 09, 2016, 10:15:54 AM
I have not fired up the spread sheet but looking at the latest stock highs and bonds going the other direction it maybe time to rebalance.

We hold a 35/65 (fixed/equity) split and use Larry's 5/25 rebalancing rule.

Think I will take a peek this weekend and see where we stand, just curious if anyone else has taken a peek?
Title: Re: Rebalance Time Anyone?
Post by: aspiringnomad on December 09, 2016, 11:04:34 AM
Who's Larry?

I'm still in the accumulation phase so I tend to rebalance by throwing new money towards asset classes that have not done as well lately rather than converting existing assets. It's worked to keep me roughly in line with my target AA so far.
Title: Re: Rebalance Time Anyone?
Post by: ImCheap on December 09, 2016, 12:02:45 PM
Who's Larry?

I'm still in the accumulation phase so I tend to rebalance by throwing new money towards asset classes that have not done as well lately rather than converting existing assets. It's worked to keep me roughly in line with my target AA so far.

Larry Swedroe
http://awealthofcommonsense.com/2014/03/larry-swedroe-525-rebalancing-rule/

I also chase my AA with new funds (401K is set to all bonds) but it gets to the point where that may not keep the AA in tact.

Title: Re: Rebalance Time Anyone?
Post by: VoteCthulu on December 09, 2016, 12:04:32 PM
I rebalanced a few weeks ago when bonds plunged, and there hasn't been enough movement since then to consider doing it again yet.

I don't really follow a hard and fast rule for rebalancing, if I happen to notice I'm more than 1% off my target I'll usually just do it then.
Title: Re: Rebalance Time Anyone?
Post by: SeattleCPA on December 09, 2016, 12:38:58 PM
Jim Dahle at White Coat Investor has a post today that points out the rebalancing "bump" mostly a myth... and he suggests that not worrying too much about rebalancing is a good way to keep things simple:

http://whitecoatinvestor.com/six-ways-to-spend-less-time-on-finances/

Me? I rebalance more than once a year... Maybe twice? Thrice? Mostly because it's a way I assuage my anxiety about valuations and it's the only pragmatic reaction I can have... But I wouldn't worry or rush about on this.

PS I went to rebalance this week because i'd been a little heavy on my bonds... the post election bump in stock prices had put me just about perfect in terms of percentages.
Title: Re: Rebalance Time Anyone?
Post by: talltexan on December 09, 2016, 01:40:39 PM
I had a buddy who would always tell me that I'd better rebalance before the market did it for me ;-)
Title: Re: Rebalance Time Anyone?
Post by: Heckler on December 09, 2016, 01:49:07 PM
"Once per year in March if out by more than 5%.  Otherwise, rebalance immediately if out by more than 6% on fixed/equity ratio. "

Im still debating this, as in currently 5.5% low on bonds. 
Title: Re: Rebalance Time Anyone?
Post by: talltexan on December 12, 2016, 06:52:30 AM
Everything I'm hearing is that the bond price keeps dropping. May have to rebalance a second time even if you do it today.
Title: Re: Rebalance Time Anyone?
Post by: ImCheap on December 12, 2016, 08:33:52 AM
Op here, I fired up the spread sheet this weekend. I was a little surprised we did not hit our rebalancing band (getting close however), guess sending every his and hers contribution to bonds seems to be working!