Shaoya wrote:I'd like to re-balance our portfolio, but what is the optimal way to do it?
I don't believe you need to rebalance your portfolio at all. You are close enough to your target in my opinion. You could rebalance right back in target, but it will have moved by the next business day, so why bother? I'd consider 5% rebalancing bands instead of 2.5% rebalancing bands which are much too narrow in my opinion.
1. What criteria do Bogleheads use to trigger a re-balance? Calendar? Percentage bands?
Bogleheads, from what I've read here, use one or the other or both. What do you feel comfortable with?
2. Should I just exchange equities into one of our bond fund (which one?) or should I branch out to diversify in some other way? [I'm still learning about how asset classes correlate (or don't) so any help here is appreciated.]
You could do this if you want (but again, I don't see a need
to do it). I doubt it makes much difference which one you pick.
Another approach is simply change the contributions in one of the 457 accounts. Just change the ratio a tick toward bonds. That will likely bring things closer to your target.
Any suggestions on this, as well as any other comments on our situation below, would be greatly appreciated.
Your portfolio is more complex than it needs to be. If you want, you could reduce the number of funds you have by a lot. Is there a reason you have so many? Do you like what you have or would you like something simpler?