Regular rebalancing (for example, once or twice per year on the same date) may not be as advantageous as "opportunistic rebalancing" where you rebalance when your pre-determined allocation percentages change.
I recommend this type of rebalancing. For example, if you want 10% in small-company stocks and find that it is now at 12% (which is 20% higher than you wanted), then rebalance back to 10%.
Gobind Daryanani in a June 2009 FPA journal article by Carly Schulaka stated "...historically, I have found that using a 20 percent relative band maximizes your rebalancing..."
"...in a turbulent market, it's better to go with a larger relative band - say 25 or 30 percent..."
An Introduction
Hi. Welcome to BourGroup and my blog. Phil
Phil Bour is a CERTIFIED FINANCIAL PLANNER(tm) professional since 2004, a Magna Cum Laude college graduate and an accounting professional for over 35+ years. I love numbers, statistics and economic history.
I am also an Enrolled Agent (EA) to represent taxpayers before the Internal Revenue Service and to prepare tax returns.
"Phil"osophy: I believe that you can manage your money on your own (not necessarily through individual stock selection but through mutual funds, ETF's and other solutions) once you receive some one-time, professional guidance. Why pay annual fees when there may be little added value? For additional information, first read the "An Introduction" label at the left. Then move on to others.
Phil Bour is a CERTIFIED FINANCIAL PLANNER(tm) professional since 2004, a Magna Cum Laude college graduate and an accounting professional for over 35+ years. I love numbers, statistics and economic history.
I am also an Enrolled Agent (EA) to represent taxpayers before the Internal Revenue Service and to prepare tax returns.
"Phil"osophy: I believe that you can manage your money on your own (not necessarily through individual stock selection but through mutual funds, ETF's and other solutions) once you receive some one-time, professional guidance. Why pay annual fees when there may be little added value? For additional information, first read the "An Introduction" label at the left. Then move on to others.