[Poll] How often do you re-balance?

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How often do you re-balance your largest account?

monthly
7
6%
quarterly
6
5%
semiannually
4
3%
yearly
28
22%
less often than yearly
14
11%
whenever AA deviates by more than my threshold
68
54%
 
Total votes: 127

Topic Author
acegolfer
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[Poll] How often do you re-balance?

Post by acegolfer »

To keep it simple, I have been DCA using a fixed ratio between 3 funds for many years and rarely re-balance. As stocks performed better than bonds, my stock weight has increased over time.

However, many people suggest one should re-balance often. Here's one example: http://www.investopedia.com/articles/st ... stakes.asp #4.

I am curious how often you re-balance. If it depends on the account, for example, re-balancing retirement account but not taxable account, then consider your largest account.
Longtimelurker
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Re: [Poll] How often do you re-balance?

Post by Longtimelurker »

I rebalance by:

1: new contributions
2: subjectively based on how deviated I am from target
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midareff
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Re: [Poll] How often do you re-balance?

Post by midareff »

Balance bands.... mechanical process.
IlliniDave
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Re: [Poll] How often do you re-balance?

Post by IlliniDave »

I picked the last option; however, I don't have firm thresholds so for me it's not a completely quantitative process. I use new contributions to, in a sense, continually rebalance, if you want to look at it that way. I also consider myself on somewhat of a glide path moving towards a slightly more conservative position over time.
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placeholder
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Re: [Poll] How often do you re-balance?

Post by placeholder »

Essentially with each paycheck (biweekly) as I have set my 401k contributions to be 100% fixed income for a couple years now then about once a month I check the overall allocation to see if anything is out of range (5/25 rules) and if there is any new money to invest.
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Sheepdog
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Re: [Poll] How often do you re-balance?

Post by Sheepdog »

I don't re-balance at all as I have balanced funds only. They do it.
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John3754
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Re: [Poll] How often do you re-balance?

Post by John3754 »

I update my spreadsheet every 6 months and rebalance if outside of my bands.
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pennstater2005
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Re: [Poll] How often do you re-balance?

Post by pennstater2005 »

Sheepdog wrote:I don't re-balance at all as I have balanced funds only. They do it.
Same.
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Sbashore
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Re: [Poll] How often do you re-balance?

Post by Sbashore »

I use bands with the added rule that I can only rebalance any given asset class once a year. So once a buy or sell action is caused by exceeding a band, I'm done for that particular action for a year.
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Meg77
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Re: [Poll] How often do you re-balance?

Post by Meg77 »

I don't rebalance at all. So far I have just directed new investments (annual IRA contributions primarily) into one asset class or another and maintained my target AA of 90-95% stocks. However now my portfolio is big enough that new contributions aren't sufficient to move the needle much, so I need to establish a new plan. I'm at 96% stocks now and am debating selling some and buying bonds to get closer to 90%. I feel like I am more likely to just rebalance whenever the ratios get skewed, not based on the calendar.
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livesoft
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Re: [Poll] How often do you re-balance?

Post by livesoft »

acegolfer, you are going to get this figured out eventually. Good luck!

I tend to rebalance into something at the lowest price of the year and to rebalance out of it at the highest price of the year. It works like a charm. :)
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chaz
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Re: [Poll] How often do you re-balance?

Post by chaz »

Each December with my RMD.
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Aptenodytes
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Re: [Poll] How often do you re-balance?

Post by Aptenodytes »

Just alter your DCA so that the new contributions go into your bond fund. Once you catch up to where you want to be, check in every few months to see if you are too heavy in stocks or bonds, and adjust the DCA appropriately.

Your portfolio is a boat you can steer while asleep, if you are willing to wake up a few times a year to nudge the tiller a bit.
Topic Author
acegolfer
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Re: [Poll] How often do you re-balance?

Post by acegolfer »

Aptenodytes wrote:Just alter your DCA so that the new contributions go into your bond fund. Once you catch up to where you want to be, check in every few months to see if you are too heavy in stocks or bonds, and adjust the DCA appropriately.

Your portfolio is a boat you can steer while asleep, if you are willing to wake up a few times a year to nudge the tiller a bit.
Thanks for your advise. That will work over time, if one is a true 80/20 investor.

But I'm not committed to 80/20 ratio that I started with. It was just a starting ratio many years ago. I just keep it simple and let it ride even in up/down turn. I'm in the minority who answered less often than yearly (rarely).
Rodc
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Re: [Poll] How often do you re-balance?

Post by Rodc »

Need to be able to answer more than one option.

New contributions keep nudging towards target, but on rare occasion that is not enough and I sell/buy to rebalance.
We live a world with knowledge of the future markets has less than one significant figure. And people will still and always demand answers to three significant digits.
placeholder
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Re: [Poll] How often do you re-balance?

Post by placeholder »

Meg77 wrote:I don't rebalance at all. So far I have just directed new investments (annual IRA contributions primarily) into one asset class or another and maintained my target AA of 90-95% stocks.
Personally I consider that to be rebalancing.
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Cut-Throat
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Re: [Poll] How often do you re-balance?

Post by Cut-Throat »

Sheepdog wrote:I don't re-balance at all as I have balanced funds only. They do it.
Ditto!.... I am 100% in the Vanguard Target Retirement Income Fund.

The Vanguard Elves do it for me. :happy

So, I didn't answer the Poll.
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Doc
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Re: [Poll] How often do you re-balance?

Post by Doc »

Aptenodytes wrote:Just alter your DCA so that the new contributions go into your bond fund.
A typical response for a number of posters most likely the youngster's among us.

Two comments:

1) Adding new contributions to an underweight asset class is balancing not re-balancing.

2) As one gets older and has a larger portfolio balancing by new contributions or withdrawals for us old folks , is often not enough to correct for a typical 5% band correction let alone a 20% market correction.
A scientist looks for THE answer to a problem, an engineer looks for AN answer and lawyers ONLY have opinions. Investing is not a science.
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Ice-9
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Re: [Poll] How often do you re-balance?

Post by Ice-9 »

I voted that I use bands, but I guess technically you could also say bi-weekly, because all new contributions go to the asset class most in need of a boost, which doesn't change that often. The bands get triggered very, very rarely.
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joe8d
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Re: [Poll] How often do you re-balance?

Post by joe8d »

Never.
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wander
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Re: [Poll] How often do you re-balance?

Post by wander »

I re-balance several times a year when my asset allocation is off track.
sambb
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Re: [Poll] How often do you re-balance?

Post by sambb »

i rebalance daily in my tax deferred accts - or i assume vanguard does, because i use LS and target retirement funds, and they maintain their allocation -- this isn't an option in the poll
basspond
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Re: [Poll] How often do you re-balance?

Post by basspond »

I rebalance by redirecting my monthly direct deposits.
dkturner
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Re: [Poll] How often do you re-balance?

Post by dkturner »

My largest account is a rollover IRA which is currently 100% invested in the Vanguard Wellesley Income Fund, so the answer is either daily or never. There was no daily rebalancing option so I voted for less often than yearly.
Dandy
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Re: [Poll] How often do you re-balance?

Post by Dandy »

The best way to re balance is via adjusting your contributions. Alas, no more contributions in retirement.

My target date to rebalance is once a year. However, I hate to move large amounts of money at one time. So, in 2013 for example, I did some minor re balancing from equities during the year as allocations got near or above target. I just worry about the equity to fixed income allocation during the year. So far this year I have made no changes.

I also have some equities in my IRA so I never had to incur taxes to re balance.

When the once a year date comes I look at all the equity vs fixed income total and make sure all the sub allocations are within their bands. I also calculate whether I have enough safe investments (short term bonds/CDs etc.) to last me to age 90.
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villars
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Re: [Poll] How often do you re-balance?

Post by villars »

so far have been balancing by new contributions only ( so bi-weekly?)

My plan is to re-balance once a quarter should equities swing enough to make it necessary - the 401k snail-mail report would be my reminder :-)

My math says a 25% swing in equities will be needed to trigger that, so doubt it would happen anytime soon.
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