So who's rebalancing stocks to bonds right now?

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mojorisin
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So who's rebalancing stocks to bonds right now?

Post by mojorisin » Sat Sep 01, 2018 11:44 am

My stock allocation was set to 60% about 10 years ago when I took this over myself. I adjusted a few years ago to 65%, with the recent rise plus new money I'm up to 70% right now. Being in my 40's and having a longer term horizon, I bumped equities up a bit.

Good problem to have!

So, here comes the discipline part of investing. To do the rebalance. I've researched when to rebalance to death... there really isnt a silver bullet.

So just curious, any investors keeping to their discipline and selling right now?

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Re: So who's rebalancing stocks to bonds right now?

Post by livesoft » Sat Sep 01, 2018 11:47 am

If one was disciplined, wouldn't one really be rebalancing from US stocks to International stocks right now?
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Re: So who's rebalancing stocks to bonds right now?

Post by HomerJ » Sat Sep 01, 2018 11:47 am

I already have. A couple of times over the past few years. I'm 50/50, and when I get around 55/45, I rebalance back to 50/50

Rebalancing stocks to bonds is easy. That's taking won money off the table.

My problem is rebalancing bonds to stocks during a crash. THAT takes discipline, and in retirement, I may not even do it.

But selling stocks to lock in some gains, that's FUN.
Last edited by HomerJ on Sat Sep 01, 2018 11:51 am, edited 1 time in total.
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Re: So who's rebalancing stocks to bonds right now?

Post by HomerJ » Sat Sep 01, 2018 11:48 am

livesoft wrote:
Sat Sep 01, 2018 11:47 am
If one was disciplined, wouldn't one really be rebalancing from US stocks to International stocks right now?
I did a little of that too... But International is only 10% of my entire portfolio (20% of my stock portfolio), so it didn't cost me a lot, and wasn't too painful.
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Re: So who's rebalancing stocks to bonds right now?

Post by TravelforFun » Sat Sep 01, 2018 11:50 am

HomerJ wrote:
Sat Sep 01, 2018 11:47 am
But selling stocks to lock in some gains, that's FUN.
Not an easy thing to do. I can't convince myself to sell some of my AMZN shares right now.

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Re: So who's rebalancing stocks to bonds right now?

Post by JBTX » Sat Sep 01, 2018 11:52 am

livesoft wrote:
Sat Sep 01, 2018 11:47 am
If one was disciplined, wouldn't one really be rebalancing from US stocks to International stocks right now?
One of the reasons why I have switched to target date and life strategy funds in 401ks that have access to those vehicles at very low fees.

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Re: So who's rebalancing stocks to bonds right now?

Post by RadAudit » Sat Sep 01, 2018 1:58 pm

livesoft wrote:
Sat Sep 01, 2018 11:47 am
If one was disciplined, wouldn't one really be rebalancing from US stocks to International stocks right now?
Good idea. It's on the horizon. Haven't reached the rebalance bands, yet.
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Re: So who's rebalancing stocks to bonds right now?

Post by StrangePenguin » Sat Sep 01, 2018 2:03 pm

Recently all of my new investments have been going to Bonds and Intl Stock. I am at a stage where this is enough to keep my asset allocation roughly correct.

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Re: So who's rebalancing stocks to bonds right now?

Post by abuss368 » Sat Sep 01, 2018 2:06 pm

During these accumulation years we rebalance on a perpetual basis as additional funds are deposited. This has worked well.
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Re: So who's rebalancing stocks to bonds right now?

Post by delamer » Sat Sep 01, 2018 2:07 pm

HomerJ wrote:
Sat Sep 01, 2018 11:47 am
I already have. A couple of times over the past few years. I'm 50/50, and when I get around 55/45, I rebalance back to 50/50

Rebalancing stocks to bonds is easy. That's taking won money off the table.

My problem is rebalancing bonds to stocks during a crash. THAT takes discipline, and in retirement, I may not even do it.

But selling stocks to lock in some gains, that's FUN
Same here, although with a higher target stock allocation.

Last time was about one month ago.

I agree about the won money. It tells me that our plan is working.

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Re: So who's rebalancing stocks to bonds right now?

Post by goodenyou » Sat Sep 01, 2018 2:13 pm

Maybe the OP is overweight international and he has to re-balance to US stocks.
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Re: So who's rebalancing stocks to bonds right now?

Post by grabiner » Sat Sep 01, 2018 2:19 pm

I have no reason to rebalance right now, but I check regularly, because I have tolerance bands. I do a regular rebalance every January, because that is when I make the annual change to my target asset allocation, increasing bonds by 2% per year. As of my last check (from a few weeks ago when I had new money to invest), I have 44% US stock, 39% foreign stock, 9% real estate, and 8% bonds, versus target levels of 41%/41%/10%/8%. Given the US/foreign split, the new money went into a foreign stock fund.

I have only twice hit a tolerance band. I was over the tolerance level for bonds in October 2008 when the market crashed, so I sold bonds in my retirement account to buy more stock. And I was over the tolerance level for REITs in September 2009 when the real-estate market recovered faster than other sectors (from further down); my regular January 2009 rebalance forced me to sell some REITS in September.
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Re: So who's rebalancing stocks to bonds right now?

Post by Earl Lemongrab » Sat Sep 01, 2018 2:40 pm

I use the 5/25 ranges and I invest new money to keep things in balance. That's meant that in the recent past the 401(k) contributions have been all fixed income. That's of course come to an end. Currently things are still in good shape.

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Re: So who's rebalancing stocks to bonds right now?

Post by Grt2bOutdoors » Sat Sep 01, 2018 2:54 pm

In tax deferred accounts easy to re-balance without having a tax effect. In my taxable account, have started purchasing more fixed income. Have been buying more international, not just now though, all year long.
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Re: So who's rebalancing stocks to bonds right now?

Post by ThePrince » Sat Sep 01, 2018 2:56 pm

livesoft wrote:
Sat Sep 01, 2018 11:47 am
If one was disciplined, wouldn't one really be rebalancing from US stocks to International stocks right now?
+1. One of the reasons I use Betterment and Blooom. No behavioral/emotional traps for me.

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Re: So who's rebalancing stocks to bonds right now?

Post by MJW » Sat Sep 01, 2018 3:00 pm

livesoft wrote:
Sat Sep 01, 2018 11:47 am
If one was disciplined, wouldn't one really be rebalancing from US stocks to International stocks right now?
One has to be disciplined, because they would likely be doing it quite often over the past decade. :P

Just think of how many shares of international stocks that means. Yeah, buddy.

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Re: So who's rebalancing stocks to bonds right now?

Post by pkcrafter » Sat Sep 01, 2018 3:15 pm

mojorisin wrote:
Sat Sep 01, 2018 11:44 am
My stock allocation was set to 60% about 10 years ago when I took this over myself. I adjusted a few years ago to 65%, with the recent rise plus new money I'm up to 70% right now. Being in my 40's and having a longer term horizon, I bumped equities up a bit.
If your equity allocation is 65%, then 70% is the rebalance trigger. You have already moved your original equity target, don't do it again. :happy Instead remember why you set it there in the first place. Don't let current conditions influence your reasoned risk capacity.

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Re: So who's rebalancing stocks to bonds right now?

Post by Phineas J. Whoopee » Sat Sep 01, 2018 4:06 pm

I'm getting close to a rebalancing level, but am not there yet. If it happens I'll go ahead and make the transaction. If things reverse I have lots of room and probably lots of time to wait until the lower rebalancing line will be crossed, if it ever is.

OP - from your OP it seems more as if you're speaking of reallocating than rebalancing. To rebalance is to bring one's portfolio back in line with one's chosen asset allocation.

PJW

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Re: So who's rebalancing stocks to bonds right now?

Post by scrabbler1 » Sat Sep 01, 2018 4:49 pm

HomerJ wrote:
Sat Sep 01, 2018 11:47 am
I already have. A couple of times over the past few years. I'm 50/50, and when I get around 55/45, I rebalance back to 50/50

Rebalancing stocks to bonds is easy. That's taking won money off the table.

My problem is rebalancing bonds to stocks during a crash. THAT takes discipline, and in retirement, I may not even do it.

But selling stocks to lock in some gains, that's FUN.
I agree. My AA is similar to yours, and when it (in my tIRA, not in my taxable) gets a little too much out of range, I rebalance, usually in this direction. Very rarely have I rebalanced the other way, which is akin to "buying on the dips." And in late 2008, it took some guts to buy stocks while their price was dropping quickly.

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Re: So who's rebalancing stocks to bonds right now?

Post by radiowave » Sat Sep 01, 2018 5:02 pm

My IPS calls for a 50/50 AA at retirment in a few years so I use my monthly tax deferred contribution to slowly lower current AA by buying VG Total Bond at institutional ER rates. It's been working out to about a 1% increase in bonds per year or there about. Currently at 55/45
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Re: So who's rebalancing stocks to bonds right now?

Post by stimulacra » Sat Sep 01, 2018 5:16 pm

Been rebalancing more often to stay at my previous allocation (70% equities, 25% bonds, 5% gold).

Shifted this week to 65/30/5. My equities total after that shift is still greater than what it was on January 1st this year.

Would like to do 60/35/5 by years end.

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Re: So who's rebalancing stocks to bonds right now?

Post by HomerJ » Sat Sep 01, 2018 8:18 pm

Phineas J. Whoopee wrote:
Sat Sep 01, 2018 4:06 pm
OP - from your OP it seems more as if you're speaking of reallocating than rebalancing. To rebalance is to bring one's portfolio back in line with one's chosen asset allocation.

PJW
This...

The OP isn't rebalancing at all... Instead he keeps INCREASING his stock allocation...
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Re: So who's rebalancing stocks to bonds right now?

Post by KlangFool » Sat Sep 01, 2018 8:41 pm

OP,

1) I had adjusted my AA from 61/39 to 60/40.

2) My new money is going into the bond.

3) I sold some stock during my annual rebalancing.

4) I probably will be selling more stock if it goes up more.

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Re: So who's rebalancing stocks to bonds right now?

Post by Misenplace » Sat Sep 01, 2018 8:51 pm

My asset allocation is 60% equity: 40% bonds and equivalents. 30% of equity is International index.
I've rebalanced at least twice over the past year by moving my tax advantaged accounts heavier into bonds. In my taxable accounts, I've also tax loss harvested my short term International Index losses. Fun times!

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Re: So who's rebalancing stocks to bonds right now?

Post by honduranhurricane » Sat Sep 01, 2018 8:55 pm

I have rebalanced recently. Small cap rally has been impressive, enjoyable and profitable for my OW position. Dialed it back a few days ago as it got beyond my tolerance bands. Funds into my fixed allocation.

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Re: So who's rebalancing stocks to bonds right now?

Post by Mursili » Sat Sep 01, 2018 9:02 pm

livesoft wrote:
Sat Sep 01, 2018 11:47 am
If one was disciplined, wouldn't one really be rebalancing from US stocks to International stocks right now?
Wow, I feel like I must be doing something right since I just rebalanced from total stock market (FSTVX) to my chosen "total international" (FSGDX). I must be saving quite a bit in FI in the taxable account (I know it is not the most efficient, but I will deal with that at a later time) since my equities/FI split was still good. I have international as 30% or equities.
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Re: So who's rebalancing stocks to bonds right now?

Post by marcopolo » Sat Sep 01, 2018 9:17 pm

HomerJ wrote:
Sat Sep 01, 2018 11:47 am
I already have. A couple of times over the past few years. I'm 50/50, and when I get around 55/45, I rebalance back to 50/50

Rebalancing stocks to bonds is easy. That's taking won money off the table.

My problem is rebalancing bonds to stocks during a crash. THAT takes discipline, and in retirement, I may not even do it.

But selling stocks to lock in some gains, that's FUN.
I had been doing this for the last couple of years as well.

I am now up against a situation where I have run out tax-deferred space to do rebalancing out of US Equities.
All my US equities are in taxable accounts.

So, locking in those gains in NOT going to be FUN for me. I have not hit my 5% trigger quite yet, so I am actually debating letting things run to early next year when i will be in a much lower tax bracket. I know tax tail, investing dog, and all that, but paying 23.8% tax now versus maybe 0% in 4 months is tempting.
Last edited by marcopolo on Sat Sep 01, 2018 9:19 pm, edited 1 time in total.
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Re: So who's rebalancing stocks to bonds right now?

Post by Sandtrap » Sat Sep 01, 2018 9:41 pm

Did a huge rebalance in January with substantial new funds.
Doing nothing for now.
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Re: So who's rebalancing stocks to bonds right now?

Post by rkhusky » Sun Sep 02, 2018 6:41 am

Haven't hit my 1% rebalancing band yet after my last rebalance.

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Re: So who's rebalancing stocks to bonds right now?

Post by watchnerd » Sun Sep 02, 2018 11:26 am

mojorisin wrote:
Sat Sep 01, 2018 11:44 am
My stock allocation was set to 60% about 10 years ago when I took this over myself. I adjusted a few years ago to 65%, with the recent rise plus new money I'm up to 70% right now. Being in my 40's and having a longer term horizon, I bumped equities up a bit.

Good problem to have!

So, here comes the discipline part of investing. To do the rebalance. I've researched when to rebalance to death... there really isnt a silver bullet.

So just curious, any investors keeping to their discipline and selling right now?
Yes, just in the last couple of weeks my US stock allocation crossed its rebalancing threshold (off target by 5% of total port), so sold to get it back in line.
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Re: So who's rebalancing stocks to bonds right now?

Post by nedsaid » Sun Sep 02, 2018 11:31 am

HomerJ wrote:
Sat Sep 01, 2018 11:47 am
I already have. A couple of times over the past few years. I'm 50/50, and when I get around 55/45, I rebalance back to 50/50

Rebalancing stocks to bonds is easy. That's taking won money off the table.

My problem is rebalancing bonds to stocks during a crash. THAT takes discipline, and in retirement, I may not even do it.

But selling stocks to lock in some gains, that's FUN.
Homer, pretty much I am just one way rebalancing. That is from stocks to bonds. My last round of rebalancing was in December 2017 and I am close to doing another round. If the market advances from here, I will pull the trigger on another mild wave of rebalancing. If the market corrects in here, I will stay put. Probably will look what the markets are doing on Tuesday morning and make a go/no go decision then. Pretty much looking at this day by day. This is a continuation of my program of mild rebalancing from stocks to bonds that has been in place since July of 2013. My rebalancing bands are pretty narrow about 1% or so.
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Re: So who's rebalancing stocks to bonds right now?

Post by dknightd » Sun Sep 02, 2018 11:33 am

mojorisin wrote:
Sat Sep 01, 2018 11:44 am

So just curious, any investors keeping to their discipline and selling right now?
I'm selling stocks.

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Re: So who's rebalancing stocks to bonds right now?

Post by vested1 » Sun Sep 02, 2018 12:10 pm

Rebalanced back to 60/40 in January when stocks hit 66%, then again in August when I needed to take out a largish sum to make an extra principal payment on the mortgage, bringing it back down to 60/40. Being retired, no new money, just the same old stale stuff. Somehow it spends the same as the new stuff.

When I first learned of the concept of rebalancing it seemed antithetical, kind of like turning into a skid. It's tempting to sell the loser. Luckily, wiser men than I convinced me of the advantages of staying focused on the plan.

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Re: So who's rebalancing stocks to bonds right now?

Post by 2015 » Sun Sep 02, 2018 12:59 pm

rkhusky wrote:
Sun Sep 02, 2018 6:41 am
Haven't hit my 1% rebalancing band yet after my last rebalance.
+1
In my case I use 5% rebalancing bands only above and beyond annual rebalancing.

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Re: So who's rebalancing stocks to bonds right now?

Post by StevieG72 » Sun Sep 02, 2018 1:14 pm

My rebalancing band is 5% deviation from target.

Monthly contributions have been going to bonds vs. stocks this year.

Currently stocks are only overweighted by .3% so this has worked out well so far.
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Re: So who's rebalancing stocks to bonds right now?

Post by ruralavalon » Sun Sep 02, 2018 1:15 pm

mojorisin wrote:
Sat Sep 01, 2018 11:44 am
My stock allocation was set to 60% about 10 years ago when I took this over myself. I adjusted a few years ago to 65%, with the recent rise plus new money I'm up to 70% right now. Being in my 40's and having a longer term horizon, I bumped equities up a bit.

Good problem to have!

So, here comes the discipline part of investing. To do the rebalance. I've researched when to rebalance to death... there really isnt a silver bullet.

So just curious, any investors keeping to their discipline and selling right now?
Age 73, our target asset allocation is 50/50. Current mix is about 53/47. We have not hit the 5% rebalancing band, which would be 55/45.
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Re: So who's rebalancing stocks to bonds right now?

Post by HomerJ » Sun Sep 02, 2018 7:19 pm

marcopolo wrote:
Sat Sep 01, 2018 9:17 pm
HomerJ wrote:
Sat Sep 01, 2018 11:47 am
I already have. A couple of times over the past few years. I'm 50/50, and when I get around 55/45, I rebalance back to 50/50

Rebalancing stocks to bonds is easy. That's taking won money off the table.

My problem is rebalancing bonds to stocks during a crash. THAT takes discipline, and in retirement, I may not even do it.

But selling stocks to lock in some gains, that's FUN.
I had been doing this for the last couple of years as well.

I am now up against a situation where I have run out tax-deferred space to do rebalancing out of US Equities.
All my US equities are in taxable accounts.

So, locking in those gains in NOT going to be FUN for me. I have not hit my 5% trigger quite yet, so I am actually debating letting things run to early next year when i will be in a much lower tax bracket. I know tax tail, investing dog, and all that, but paying 23.8% tax now versus maybe 0% in 4 months is tempting.
Sure that makes sense... I'm still doing all my rebalancing inside tax-deferred accounts.
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Re: So who's rebalancing stocks to bonds right now?

Post by John151 » Mon Sep 03, 2018 3:06 pm

My stock investments are all in taxable accounts, so I can’t rebalance within accounts that are tax-advantaged. Currently my stocks are about five percentage points above my target, but rebalancing by selling shares would cost me a hefty amount in capital gains taxes. So I’ve decided not to sell. I’ve only done some passive rebalancing by investing new money, including dividends from my stocks, in a tax-exempt bond fund.

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Re: So who's rebalancing stocks to bonds right now?

Post by goblue100 » Tue Sep 04, 2018 10:24 am

Took a look at my records.
12/31/14 Stocks 80%, Bonds 20%
08/01/2016 Stocks 78.12%, Bonds 21.88% (for some reason didn't do year end spread sheet for 2016.)
12/31/2017 Stocks 67.8%, Bonds 24.39%, Cash & CD's 7.14%
6/30/2018 Stocks 66.5%, Bonds 26%, Cash & CD's 7.5%

The nice thing is I still have more in equities in total dollar amount in 2018 than I did in 2014 despite having 13.5% less of my portfolio in equities.

Of course, I would have been better off staying 80/20 until now, but at the time it seemed that starting to take less risk was a good idea,
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