I noticed last week that my HSA investments are unbalanced - not by much, just 8-10% between the three funds. My other investments (401k and IRA) have options to automatically rebalance the portfolio, but my HSA does not. I gave them a call and explained what I was trying to do and found out that I will be hit up with transaction fees if/when I do rebalance.
So my question is, should I 1) wait until the funds are heavily unbalanced (20% or so) and just take the transaction hit, or 2) purchase only the under-balanced funds for the next 6 weeks or so until it gets back to the target allocation?
My concern with option 2 is that it will only take approximately 3 contributions to get allocation correct because my overall balance is rather small in comparison to the contributions. However, in 5-10 years down the road, what do I do if the market heavily fluctuates and the account is much larger? It could take many months or even years to rebalance only with new contributions.
Thanks for any thoughts on this.