Very good content. You touched on some of the aspects of re-balancing that are not always explained by the "you just gotta do it" crowd. The idea of selling high performing assets in order to shore up under performing assets is counter-intuitive to some. However, likening the process to "sell high" "buy low" is very well done. Other points well made, too. Thanks for your insight. Cheers
Thanks for the informative presentation. I rebalance with new money to bring underweight positions up to desired allocation. As you mentioned, M1 Finance makes it easy with dynamic rebalancing, but I've found that the rebalance feature reset the total return calculation for the pie(s) involved.
Other than avoiding capital gains in taxable space, not really. There's some evidence of time series momentum within about a year; that's why I said more often than annually doesn't have a benefit.
I should have added a tad bit more context to my previous comment. Annual rebalancing strikes the balance of capturing any potential Momentum benefit while not letting allocations stray too far for too long. In other words, shorter than a year may intrude on Momentum, and longer than a year or 2 may detrimentally shift the portfolio's risk profile too much. So something around annually is a good choice IMHO.
@@OptimizedPortfolio quick question if you don’t mind, I just started my Boglehead journey. No more individual stocks for me and last week I just added VXUS. But at age 29 do you think I should add bonds like BND? At least 5-10%?
@@EfLuis Depends on risk tolerance. I'm a fan of everyone owning at least some bonds for the simple reason that most don't have the stomach for 100% stocks, though admittedly 5-10% is doing basically nothing.
He has good advice on debt and saving. But his investment and retirement planning advice is atrociously awful. And he is ridiculously stubborn about it too. I don’t really care all that much, but his recommendation of an 8% spending rule for retirement is straight up dangerous.
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When and how do you rebalance your portfolio?
Quarterly for HFEA in my Roth. Yearly for everything else.
@@jasonhobbs2405 Thanks for sharing!
@@user-tm1kb3fq4m No
Never. This is a terrible investing gimmick. th-cam.com/video/sO8SLwDOvCk/w-d-xo.htmlsi=LdNLNatsh0e4J8I7
The worst thing you can do is rebalance often, via dynamic rebalancing.
Very good content. You touched on some of the aspects of re-balancing that are not always explained by the "you just gotta do it" crowd. The idea of selling high performing assets in order to shore up under performing assets is counter-intuitive to some. However, likening the process to "sell high" "buy low" is very well done. Other points well made, too. Thanks for your insight. Cheers
Thanks, Richard!
Thanks for the excellent content; your voice should narrate a Super Bowl commercial.😀
Hah maybe one day!
I just rebalanced my portfolio too. Everyone must check his stocks from time to time and reevaluate his strategy
Awesome!
Thanks for the informative presentation. I rebalance with new money to bring underweight positions up to desired allocation. As you mentioned, M1 Finance makes it easy with dynamic rebalancing, but I've found that the rebalance feature reset the total return calculation for the pie(s) involved.
Sounds good!
Very education, thank. I do quarterly rebalancing for my 401k account. I will need check if they charge transition fee :)
Thanks for sharing!
Great real world examples
Thanks!
Are there any benefits/ drawbacks to rebalance only when adding new money (not selling anything)? Any studies done on this topic?
Other than avoiding capital gains in taxable space, not really. There's some evidence of time series momentum within about a year; that's why I said more often than annually doesn't have a benefit.
Thanks, I do this in my Roth IRA with 90% large cap, 10% small cap value. Probably not as effective with bonds in mix.
Awesome!
I should have added a tad bit more context to my previous comment. Annual rebalancing strikes the balance of capturing any potential Momentum benefit while not letting allocations stray too far for too long. In other words, shorter than a year may intrude on Momentum, and longer than a year or 2 may detrimentally shift the portfolio's risk profile too much. So something around annually is a good choice IMHO.
Thanks
What if you have a multi asset 100% allocation? Do you still rebalance?
Not sure what you mean by "multi asset 100% allocation."
@@OptimizedPortfolio 0% stocks and 100% bonds vise versa
@@sudharshanrao4241 That's a single asset portfolio.
I heard target date funds rebalance automatically
Correct
I just use M1 and let the percentages do its thing
Effortless!
@@OptimizedPortfolio quick question if you don’t mind, I just started my Boglehead journey. No more individual stocks for me and last week I just added VXUS. But at age 29 do you think I should add bonds like BND? At least 5-10%?
@@EfLuis Depends on risk tolerance. I'm a fan of everyone owning at least some bonds for the simple reason that most don't have the stomach for 100% stocks, though admittedly 5-10% is doing basically nothing.
Less is more!
Indeed
Dave Ramsey recommends rebalancing only 2 to 4 times in a person's lifetime of investing! Interesting
Thanks for sharing, TJ!
He seems more like an entertainer than a financial expert.
@@radfaraf maybe he is an absolute genius entrepreneur. His business revenue was over 300 million last year.
Dave Ramsey is an absolute dipshit! Interesting
He has good advice on debt and saving. But his investment and retirement planning advice is atrociously awful. And he is ridiculously stubborn about it too. I don’t really care all that much, but his recommendation of an 8% spending rule for retirement is straight up dangerous.