How often do you make contributions to your portfolio?

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DeathFalcon
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How often do you make contributions to your portfolio?

Postby DeathFalcon » Tue Jan 10, 2017 1:33 pm

401k aside, how often do you contribute to your portfolio, and do you rebalance your portfolio at each contribution?

I would prefer to rebalance at 12+ months, but it seems the only way to accomplish this is hold off on contributions until this time.

I prefer this schedule in part because at 12+ months, I am able to avoid short term gains, significantly reducing taxes should I need to sell while rebalancing. Studies have also shown that portfolios rebalanced at around 18 months outperform those rebalanced more regularly. Am I wrong in this approach?

What should take precedence: getting funds into the market as soon as available, or the rebalancing on a set schedule?

Jack FFR1846
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Re: How often do you make contributions to your portfolio?

Postby Jack FFR1846 » Tue Jan 10, 2017 1:39 pm

I make contributions to my taxable account based on free cash available. This isn't really periodic for me as I wait until after tuition payments and do it right away with employee stock purchase/sale, bonuses and RSU vesting. I tend to wait until I have an even $5k available to go in, then place that in.

For my portfolio, $5k isn't big enough to make any difference in AA. I rebalance mostly on my birthday but if I see the AA getting towards 5% off, I'll do a "sell to buy" within my IRA. I don't sweat the details much.....if I need to "sell to buy" $18,257 to get back to a perfect AA, I'll probably just do $10k for now.
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DeathFalcon
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Re: How often do you make contributions to your portfolio?

Postby DeathFalcon » Tue Jan 10, 2017 1:48 pm

How are you allocating those $5k amounts relative to your AA? My issue is that I often have limited space in my tax-protected accounts--and in turn the amount of bonds I can buy--so if making periodic $5k contributions, I will consistently end up out of alignment by purchasing equities everytime.

In that case, my rebalancing will be due in large part to the contributions each year, as opposed to market fluctuations. Would that even matter?

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ruralavalon
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Re: How often do you make contributions to your portfolio?

Postby ruralavalon » Tue Jan 10, 2017 1:55 pm

DeathFalcon wrote:401k aside, how often do you contribute to your portfolio, and do you rebalance your portfolio at each contribution?

I would prefer to rebalance at 12+ months, but it seems the only way to accomplish this is hold off on contributions until this time.

I prefer this schedule in part because at 12+ months, I am able to avoid short term gains, significantly reducing taxes should I need to sell while rebalancing. Studies have also shown that portfolios rebalanced at around 18 months outperform those rebalanced more regularly. Am I wrong in this approach?

What should take precedence: getting funds into the market as soon as available, or the rebalancing on a set schedule?

I always contributed whenever I had money available to do so.

I tried to structure the contributions in a way that maintained the desired asset allocation.

I would not hold off making contributions for any reason, keeping money out of the market means I miss the opportunity for participating in market gains. In my opinion getting money into the market takes priority.
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Jack FFR1846
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Re: How often do you make contributions to your portfolio?

Postby Jack FFR1846 » Tue Jan 10, 2017 2:00 pm

DeathFalcon wrote:How are you allocating those $5k amounts relative to your AA? My issue is that I often have limited space in my tax-protected accounts--and in turn the amount of bonds I can buy--so if making periodic $5k contributions, I will consistently end up out of alignment by purchasing equities everytime.

In that case, my rebalancing will be due in large part to the contributions each year, as opposed to market fluctuations. Would that even matter?


My taxable is at Schwab and all goes into SCHB broad market index ETF, so is all stock fund. But in my case, my taxable account is only $40k where my tax advantaged is 2 commas, so AA isn't affected by contributions.

If in your case, your taxable is significant with respect to 401k, Roth and any IRA, then I would think you'd perhaps buy tax exempt bonds to keep the AA in check.
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feh
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Re: How often do you make contributions to your portfolio?

Postby feh » Tue Jan 10, 2017 2:08 pm

DeathFalcon wrote:401k aside, how often do you contribute to your portfolio


Every paycheck and whenever there are surplus funds available.

DeathFalcon wrote:and do you rebalance your portfolio at each contribution?


Nope. Once a year or according to tolerance bands.

mattshwink
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Re: How often do you make contributions to your portfolio?

Postby mattshwink » Tue Jan 10, 2017 2:11 pm

Whenever funds are available. When we have $10,000 extra in our checking account, we make a taxable contribution.

ny_rn
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Re: How often do you make contributions to your portfolio?

Postby ny_rn » Tue Jan 10, 2017 2:16 pm

- 403(b) - every paycheck until it is maxed out
- Roth IRA - throughout the year until it is maxed out
- Taxable - 1st of every month, surplus and unexpected cash

bigred77
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Re: How often do you make contributions to your portfolio?

Postby bigred77 » Tue Jan 10, 2017 2:20 pm

We contribute every paycheck to the 401k and Roth IRA's. No taxable investments yet.

I kinda just stick the funds in whatever fund looks to be lagging.

I re balance back to my predetermined AA every year on my birthday. I do not have rebalancing bands.

ponyboy
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Re: How often do you make contributions to your portfolio?

Postby ponyboy » Tue Jan 10, 2017 2:26 pm

One the 1st and 15th of each month...every month...regardless of whats happening with the market.

Loandapper
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Re: How often do you make contributions to your portfolio?

Postby Loandapper » Tue Jan 10, 2017 2:29 pm

ponyboy wrote:One the 1st and 15th of each month...every month...regardless of whats happening with the market.


You don't have issues with/care about tons of tax lots?

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threebuns
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Re: How often do you make contributions to your portfolio?

Postby threebuns » Tue Jan 10, 2017 2:32 pm

Monday and Friday, every week (taxable and non taxable resp), Wealthfront redistributes for me. I like it cause it's a smaller amount of money then if I was contributing once or twice a month.

bloom2708
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Re: How often do you make contributions to your portfolio?

Postby bloom2708 » Tue Jan 10, 2017 2:39 pm

I buy whenever we have extra funds available to invest. I look at our asset allocation and buy towards it. If I look today, stocks are up about 1.9% from our desired allocation.

If I have $500 to invest today, I would put it in bonds. Moving toward the AA.

As your portfolio grows it is harder to move your AA with $500 or $1,000 purchases. That is really ok. A few down stock days and that 1.9% might turn into -1.0% for stocks. Then I would purchase stocks (20% international) with my next purchase.

If I am off 2% on my birthday, then I will re-balance. Otherwise I let the asset allocation float along, buying toward desired.
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mhc
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Re: How often do you make contributions to your portfolio?

Postby mhc » Tue Jan 10, 2017 3:01 pm

I make contributions whenever I have a cash available above a certain minimum threshold. I add it to the fund that needs it most. This occurs probably 6-8 times a year. I have a spreadsheet to show me where to make the contribution. I probably only spend a couple hours a year doing this. I wish it took more time because I enjoy the work.

dcabler
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Re: How often do you make contributions to your portfolio?

Postby dcabler » Tue Jan 10, 2017 3:20 pm

Monthly and when a bonus occurs. Money is invested to drive towards my allocation target. The deposits are seldom large enough to get me all the way there at this point in my career. Otherwise Swedroe method for rebalancing.

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grabiner
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Re: How often do you make contributions to your portfolio?

Postby grabiner » Tue Jan 10, 2017 10:33 pm

I make my entire IRA contribution every January, and do my full rebalance at the same time. I have a large taxable account, so I usually have enough in December dividends and other uninvested cash to make the IRA contribution at the start of January.

I invest in my taxable account whenever I have enough available to be worth investing; this usually means $5000, or enough to buy 100 shares of an ETF if that is what I plan to buy.
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