tarheel wrote:This is actually a fairly interesting question......if there was a huge 1987-like drop (20%) that you knew would take you way outside of your rebalancing bands, would you guesstimate fund values using their ETF cousins so that you could have orders in before the market close for the day (and get your order to clear that evening)?
Yes, this actually is what I do. My portfolio spreadsheets have a set of columns for doing trades during market hours. For mutual funds, the most similar ETF is used to estimate % change for the mutual fund that day (using GoogleFinance function with the ETF), and the estimated end of day mutual fund value is shown before and after planned trades.
The closer to market close, the more accurate, but I believe some say that ETF prices can be a less reliable reflection of NAV closer to market open and market close. Still, my preference is to enter mutual fund buy/sell/exchange orders fairly close to market close, and factor in the estimated % change based on the similar ETF.
For Vanguard index mutual funds, I use the ETF for the ETF share class of the same fund, which is as close as you can get, but premium/discount and quick moves near market close still introduce uncertainty into the mutual fund value estimates. Still, it tends to work out pretty well and make a difference for big down or up days.
Also, as mentioned in earlier reply, there are only so many accounts you can do this in if you want to do things near market close, so I couldn't do this in all the accounts I own or manage.
Finally, I don't expect that most people would want to or be able to do something like this, so I don't necessarily encourage people to do it.
Kevin
If I make a calculation error, #Cruncher probably will let me know.