Do you regret rebalancing over the last few years?

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Caduceus
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Do you regret rebalancing over the last few years?

Post by Caduceus » Sun Nov 17, 2019 1:55 am

If you practice re-balancing, you have probably re-balanced many times from stocks to bonds, and from US to international, over the last several years. Meanwhile, of course, stocks and US stocks in particular have kept on out-performing. Given the size of many Bogleheads' portfolio, I am guessing the opportunity cost of those rebalancing decisions must be at least in the low-mid six figures.

Do you regret it? Have you calculated the size of what was lost compared to if you had let it run, or rebalanced only less frequently (e.g. once every few years?)

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LilyFleur
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Re: Do you regret rebalancing over the last few years?

Post by LilyFleur » Sun Nov 17, 2019 2:11 am

This was a headline on 12/31/18: "US stocks post worst year in a decade as the S&P 500 falls more than 6% in 2018."

So, no regrets.

I am comfortable with my asset allocation.

fujiters
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Re: Do you regret rebalancing over the last few years?

Post by fujiters » Sun Nov 17, 2019 3:42 am

One shouldn't confuse a good outcome with a good plan. Yes, it would have made me more money to be 100% VOO this past decade, but how could I have possibly known that in advance?
“The purpose of the margin of safety is to render the forecast unnecessary.” -Benjamin Graham

rossington
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Re: Do you regret rebalancing over the last few years?

Post by rossington » Sun Nov 17, 2019 3:46 am

Caduceus wrote:
Sun Nov 17, 2019 1:55 am
If you practice re-balancing, you have probably re-balanced many times from stocks to bonds, and from US to international, over the last several years. Meanwhile, of course, stocks and US stocks in particular have kept on out-performing. Given the size of many Bogleheads' portfolio, I am guessing the opportunity cost of those rebalancing decisions must be at least in the low-mid six figures.

Do you regret it? Have you calculated the size of what was lost compared to if you had let it run, or rebalanced only less frequently (e.g. once every few years?)
The real question might be how much regret do you have?
(Regret is an aspect of investing to be dealt with in a rational manner, certainly not something to dwell on.)
"Success is going from failure to failure without loss of enthusiasm." Winston Churchill.

jsprag
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Re: Do you regret rebalancing over the last few years?

Post by jsprag » Sun Nov 17, 2019 4:37 am

Do I regret that some portions of my portfolio did so well that they exceeded my rebalancing thresholds and were sold off? Not at all.

This helps remind me that past losers are often future winners. Over the past few years I've been able to harness the growth of the recent winners to buy shares of potential future winners at sale prices. What's not to like?

MathWizard
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Re: Do you regret rebalancing over the last few years?

Post by MathWizard » Sun Nov 17, 2019 5:14 am

No.

Logically, I would agree with you, but you may be incorrect in assuming that the rebalanced portfolio did not have as high as return.

My wife has had a more aggressive portfolio over the last 3 years and was looking to rebalance. She wanted to see how I was invested as a starting point. When she saw a recent statement of mine, she was surprised at the high YTD rate of return. I told her that hers would be even better, since her portfolio was more stock heavy, and stocks have been doing well.

Surprisingly, her rate of return was slightly worse than mine. I would never have predicted that. I expected that I was trading performance for stability. Of course, YTD, or even 3 years is a short time in investing.

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nedsaid
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Re: Do you regret rebalancing over the last few years?

Post by nedsaid » Sun Nov 17, 2019 9:34 am

No, I do not regret my program of rebalancing from stocks to bonds and de-risking my portfolio over the last few years. Had I done nothing, I would probably be at about 75%-76% stocks at age 60 and now I am at 62%-63% stocks. Not something I really wanted to do but very glad that I did it. I had allowed my asset allocation to drift to 72% stocks just before the 2008-2009 financial crisis and after the crash, regretted that I had not rebalanced my portfolio. I resolved not to let that happen again. In July 2013, I started my program of mild rebalancing/de-risking.
A fool and his money are good for business.

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Re: Do you regret rebalancing over the last few years?

Post by HEDGEFUNDIE » Sun Nov 17, 2019 9:41 am

MathWizard wrote:
Sun Nov 17, 2019 5:14 am
No.

Logically, I would agree with you, but you may be incorrect in assuming that the rebalanced portfolio did not have as high as return.

My wife has had a more aggressive portfolio over the last 3 years and was looking to rebalance. She wanted to see how I was invested as a starting point. When she saw a recent statement of mine, she was surprised at the high YTD rate of return. I told her that hers would be even better, since her portfolio was more stock heavy, and stocks have been doing well.

Surprisingly, her rate of return was slightly worse than mine. I would never have predicted that. I expected that I was trading performance for stability. Of course, YTD, or even 3 years is a short time in investing.
This is the rebalancing bonus in action and is common when you invest in or around downturns.

Bir48die
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Re: Do you regret rebalancing over the last few years?

Post by Bir48die » Sun Nov 17, 2019 9:52 am

My rebalance a year ago matched the S&P 500 for returns in the first six months

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Re: Do you regret rebalancing over the last few years?

Post by goblue100 » Sun Nov 17, 2019 10:00 am

fujiters wrote:
Sun Nov 17, 2019 3:42 am
One shouldn't confuse a good outcome with a good plan. Yes, it would have made me more money to be 100% VOO this past decade, but how could I have possibly known that in advance?
+1. Regrets, I have a few, but then again, too few to mention.
Financial planners are savers. They want us to be 95 percent confident we can finance a 30-year retirement even though there is an 82 percent probability of being dead by then. - Scott Burns

Mr.BB
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Re: Do you regret rebalancing over the last few years?

Post by Mr.BB » Sun Nov 17, 2019 10:04 am

If you can sleep well at nights because you don't worry about the stock market, then you have the right asset allocation.
"We are what we repeatedly do. Excellence, then, is not an act, but a habit."

zlandar
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Re: Do you regret rebalancing over the last few years?

Post by zlandar » Sun Nov 17, 2019 10:22 am

It has not been easy buying international stocks vs US total this decade as VTI has run circles around VXUS. I have seen recommended international percentages from 0-20% (Bogle) to 20% (3 fund) to 35-40% (ratio in Vanguard target funds).

I started at the high end (50%) and have slowly let the ratio fall to 35% over the years. I'll go down to 30% at the end of the year by buying more VTI. I bought into the idea that less developed countries have more potential for growth than mature economies like the US. :oops:

Note to the rest of the world: pull your weight!

TN_Boy
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Re: Do you regret rebalancing over the last few years?

Post by TN_Boy » Sun Nov 17, 2019 10:26 am

Caduceus wrote:
Sun Nov 17, 2019 1:55 am
If you practice re-balancing, you have probably re-balanced many times from stocks to bonds, and from US to international, over the last several years. Meanwhile, of course, stocks and US stocks in particular have kept on out-performing. Given the size of many Bogleheads' portfolio, I am guessing the opportunity cost of those rebalancing decisions must be at least in the low-mid six figures.

Do you regret it? Have you calculated the size of what was lost compared to if you had let it run, or rebalanced only less frequently (e.g. once every few years?)
I have mild sadness over staying at my current asset allocation (relatively conservative) and my allocation to international stocks.

But overall, no regrets. My asset allocation is based upon my needs, and my allocation to international is based upon what I still believe is a sound strategy. And in spite of the sadness, have made decent money.

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Re: Do you regret rebalancing over the last few years?

Post by minesweep » Sun Nov 17, 2019 10:32 am

A slight modification of Paul Anka's lyrics.

“Regrets, I've had a few but then again too few to mention
I did what I had to do and saw it through without exemption
I planned each chartered course each careful step along the byway
And more, much more than this, I did it John Bogle’s way.”

Outer Marker
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Re: Do you regret rebalancing over the last few years?

Post by Outer Marker » Sun Nov 17, 2019 10:49 am

I completely neglected my portfolio for 5 years and failed to do any rebalancing. My 50/50 allocation wound up at 76/24. Dailing it back to 70/30 and will leave it there until 2-3 years prior to retirement.

HomeStretch
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Re: Do you regret rebalancing over the last few years?

Post by HomeStretch » Sun Nov 17, 2019 11:05 am

I have not done any calculations on past “what if” returns. I wouldn’t find it useful as I am comfortable with my asset allocation and the need to rebalance. So nothing to regret.

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Just sayin...
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Re: Do you regret rebalancing over the last few years?

Post by Just sayin... » Sun Nov 17, 2019 11:10 am

No regrets. Since retiring, I’ve rebalanced twice (once this past Friday) over the past two years - both when my stock allocation got above my limit. We’re now down to a 53% stock allocation. If the market goes up again significantly (i.e. if China trade deal is put in place), we’ll have to rebalance again. I don’t look at it as missed returns, I look at it as risk reduction (early retirement SoRR mitigation).

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sperry8
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Re: Do you regret rebalancing over the last few years?

Post by sperry8 » Sun Nov 17, 2019 11:16 am

Caduceus wrote:
Sun Nov 17, 2019 1:55 am
If you practice re-balancing, you have probably re-balanced many times from stocks to bonds, and from US to international, over the last several years. Meanwhile, of course, stocks and US stocks in particular have kept on out-performing. Given the size of many Bogleheads' portfolio, I am guessing the opportunity cost of those rebalancing decisions must be at least in the low-mid six figures.

Do you regret it? Have you calculated the size of what was lost compared to if you had let it run, or rebalanced only less frequently (e.g. once every few years?)
The game isn't over yet. It is a fools errand to judge a regret half way through a 9 inning game. That is, you are only looking at rebalancing during a bull market. Let's wait and see how this rebalancing plan is after a full market cycle (bull AND bear). Then we can (perhaps) judge how the plan worked. To regret something before the game is over makes absolutely no sense.
BH contest results: 2018: #150 of 493 | 2017: #516 of 647 | 2016: #121 of 610 | 2015: #18 of 552 | 2014: #225 of 503 | 2013: #383 of 433 | 2012: #366 of 410 | 2011: #113 of 369 | 2010: #53 of 282

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ruralavalon
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Re: Do you regret rebalancing over the last few years?

Post by ruralavalon » Sun Nov 17, 2019 11:21 am

Caduceus wrote:
Sun Nov 17, 2019 1:55 am
If you practice re-balancing, you have probably re-balanced many times from stocks to bonds, and from US to international, over the last several years. Meanwhile, of course, stocks and US stocks in particular have kept on out-performing. Given the size of many Bogleheads' portfolio, I am guessing the opportunity cost of those rebalancing decisions must be at least in the low-mid six figures.

Do you regret it? Have you calculated the size of what was lost compared to if you had let it run, or rebalanced only less frequently (e.g. once every few years?)
No regrets here.

Your basic assumption is incorrect. We have not hit rebalancing bands very often, only every few years, and bonds have done quite well.

Also, we do not have a large allocation to international stocks, we have about 25% of stocks in international stocks, so underperformance there is not as significant as you suppose.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

Beehave
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Re: Do you regret rebalancing over the last few years?

Post by Beehave » Sun Nov 17, 2019 11:27 am

Rebalancing is like insurance. Glad have it. Glad when it's not a winner.

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Toons
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Re: Do you regret rebalancing over the last few years?

Post by Toons » Sun Nov 17, 2019 11:35 am

70/30 for ten years
Comfortable with that
:happy
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee

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Cyclesafe
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Re: Do you regret rebalancing over the last few years?

Post by Cyclesafe » Sun Nov 17, 2019 11:43 am

My crystal balls of years' past were no better than the one I'm gazing into right now. As markets gyrate and the talking heads spout nonsense I've felt no impulse to "stray the course". What is changing, however, is an increasing sense that being conservative too early will more quickly erode my future purchasing power. This risk, akin to inflation risk but more about after-tax real returns, has caused me to allow a drift towards the top of my rebalancing bands - from 50% to 60%. IOW's to tolerate more risk than otherwise. And my stomach - so far - seems OK with this.

To emphasize. I am not "letting it ride" in a "perpetual" bull market; I am recognizing that too much "safe" fixed, after-tax, will hurt my future self. I don't think many of us thought of fixed in this way when setting our plan a decade ago.
"Plans are useless; planning is indispensable.” - Dwight Eisenhower

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Phineas J. Whoopee
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Re: Do you regret rebalancing over the last few years?

Post by Phineas J. Whoopee » Sun Nov 17, 2019 11:47 am

No, I do not regret maintaining my rough level of risk, in line with the plan I carefully wrote for myself; no more than I regret not buying a lottery ticket that turned out to have the winning number.
PJW

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Re: Do you regret rebalancing over the last few years?

Post by tennisplyr » Sun Nov 17, 2019 12:17 pm

I haven't rebalanced, so I'm good. I tend to withdraw from growing assets, so I'm not far afield.
Those who move forward with a happy spirit will find that things always work out.

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JoeRetire
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Re: Do you regret rebalancing over the last few years?

Post by JoeRetire » Sun Nov 17, 2019 1:15 pm

fujiters wrote:
Sun Nov 17, 2019 3:42 am
One shouldn't confuse a good outcome with a good plan.
Bingo!

There's a term for this logical fallacy, but I can seem to remember it.
Don't be a lemming.

Stoic9
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Re: Do you regret rebalancing over the last few years?

Post by Stoic9 » Sun Nov 17, 2019 1:33 pm

As a pre (got bored) end of year AA assessment I discovered that I had slipped all the way to 82/18 AA. I plan to wait till my usual end of calendar year AA assessment to put it back to 75/25. no regret, of course ask me at the end of next year!

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scubadiver
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Re: Do you regret rebalancing over the last few years?

Post by scubadiver » Sun Nov 17, 2019 5:50 pm

No. I have long since made peace with the notion that in hindsight there will have been a better investment strategy that I could have followed. That's life.

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firebirdparts
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Re: Do you regret rebalancing over the last few years?

Post by firebirdparts » Sun Nov 17, 2019 6:16 pm

JoeRetire wrote:
Sun Nov 17, 2019 1:15 pm

Bingo!

There's a term for this logical fallacy, but I can seem to remember it.
Is it post hoc ergo propter hoc?
A fool and your money are soon partners

Trader Joe
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Re: Do you regret rebalancing over the last few years?

Post by Trader Joe » Sun Nov 17, 2019 6:19 pm

Caduceus wrote:
Sun Nov 17, 2019 1:55 am
If you practice re-balancing, you have probably re-balanced many times from stocks to bonds, and from US to international, over the last several years. Meanwhile, of course, stocks and US stocks in particular have kept on out-performing. Given the size of many Bogleheads' portfolio, I am guessing the opportunity cost of those rebalancing decisions must be at least in the low-mid six figures.

Do you regret it? Have you calculated the size of what was lost compared to if you had let it run, or rebalanced only less frequently (e.g. once every few years?)
I never "rebalance" and I have no regrets. At all.

I am very happy with my investment returns.

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Re: Do you regret rebalancing over the last few years?

Post by jebmke » Sun Nov 17, 2019 6:21 pm

I don't look back. If I did, there are an infinite number of outcomes that could have happened. Waste of time.
When you discover that you are riding a dead horse, the best strategy is to dismount.

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JoeRetire
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Re: Do you regret rebalancing over the last few years?

Post by JoeRetire » Sun Nov 17, 2019 6:36 pm

firebirdparts wrote:
Sun Nov 17, 2019 6:16 pm
JoeRetire wrote:
Sun Nov 17, 2019 1:15 pm

Bingo!

There's a term for this logical fallacy, but I can seem to remember it.
Is it post hoc ergo propter hoc?
That wasn't the term I was trying to remember.

Something like "resultifying"... but it's just not coming to me today.

I'll probably wake up at 3am with the term in my head, then fall asleep and forget it again. :shock: Oh well.
Don't be a lemming.

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Re: Do you regret rebalancing over the last few years?

Post by Socrates » Sun Nov 17, 2019 6:53 pm

I moved from about 5 % bonds to about 40%, to be more conservative as I approach 55. Bonds have done well the last year as did 60-40.

I am glad I dumped international many years ago.
“Don't waste your time looking back. You're not going that way.” ― Ragnar Lothbrok.

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unclescrooge
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Re: Do you regret rebalancing over the last few years?

Post by unclescrooge » Sun Nov 17, 2019 7:26 pm

Socrates wrote:
Sun Nov 17, 2019 6:53 pm
I am glad I dumped international many years ago.
But will you be just as glad in 10 years?

heyyou
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Re: Do you regret rebalancing over the last few years?

Post by heyyou » Sun Nov 17, 2019 8:08 pm

"It will fluctuate" is still a valid answer about future stock market performance. Owning stock shares would not be as lucrative without the noticeable randomness of their returns, it is just part of the angst of stock ownership. Whether we like it or not, is immaterial to the returns.

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Re: Do you regret rebalancing over the last few years?

Post by Ferdinand2014 » Sun Nov 17, 2019 10:05 pm

Caduceus wrote:
Sun Nov 17, 2019 1:55 am
If you practice re-balancing, you have probably re-balanced many times from stocks to bonds, and from US to international, over the last several years. Meanwhile, of course, stocks and US stocks in particular have kept on out-performing. Given the size of many Bogleheads' portfolio, I am guessing the opportunity cost of those rebalancing decisions must be at least in the low-mid six figures.

Do you regret it? Have you calculated the size of what was lost compared to if you had let it run, or rebalanced only less frequently (e.g. once every few years?)

I do not have an asset allocation, therefore have never rebalanced. I only own 1 mutual fund - FXAIX (Fidelity S&P 500 index). The rest is in cash (T-bills). I have no regrets.
“You only find out who is swimming naked when the tide goes out.“ — Warren Buffett

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Re: Do you regret rebalancing over the last few years?

Post by sf_tech_saver » Sun Nov 17, 2019 10:12 pm

Mr.BB wrote:
Sun Nov 17, 2019 10:04 am
If you can sleep well at nights because you don't worry about the stock market, then you have the right asset allocation.
:sharebeer :sharebeer
VTI is a modern marvel

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Re: Do you regret rebalancing over the last few years?

Post by tranquility » Sun Nov 17, 2019 10:28 pm

No regrets at all. No one knows where the market will be x years from now (i.e. when I retire)....

flaccidsteele
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Re: Do you regret rebalancing over the last few years?

Post by flaccidsteele » Sun Nov 17, 2019 10:43 pm

Caduceus wrote:
Sun Nov 17, 2019 1:55 am
Do you regret it? Have you calculated the size of what was lost compared to if you had let it run, or rebalanced only less frequently (e.g. once every few years?)
I've been investing since the 90s. I've never actively re-balanced. Not once. No issue. No regrets. The opposite actually, I feel I would have regretted rebalancing

Lots of people told me about the benefits of sleeping well at night if I rebalance, but I never had any problems sleeping well at night without rebalancing so there was no benefit there

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Re: Do you regret rebalancing over the last few years?

Post by willthrill81 » Sun Nov 17, 2019 10:48 pm

Caduceus wrote:
Sun Nov 17, 2019 1:55 am
If you practice re-balancing, you have probably re-balanced many times from stocks to bonds, and from US to international, over the last several years. Meanwhile, of course, stocks and US stocks in particular have kept on out-performing. Given the size of many Bogleheads' portfolio, I am guessing the opportunity cost of those rebalancing decisions must be at least in the low-mid six figures.

Do you regret it? Have you calculated the size of what was lost compared to if you had let it run, or rebalanced only less frequently (e.g. once every few years?)
Investors may regret it, but that's what it means to be diversified (e.g. something will always be underperforming something else). It's par for the course.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Re: Do you regret rebalancing over the last few years?

Post by jsprag » Mon Nov 18, 2019 1:55 am

scubadiver wrote:
Sun Nov 17, 2019 5:50 pm
No. I have long since made peace with the notion that in hindsight there will have been a better investment strategy that I could have followed. That's life.
Well said.

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Re: Do you regret rebalancing over the last few years?

Post by RogerR » Mon Nov 18, 2019 2:38 am

Ferdinand2014 wrote:
Sun Nov 17, 2019 10:05 pm
Caduceus wrote:
Sun Nov 17, 2019 1:55 am
If you practice re-balancing, you have probably re-balanced many times from stocks to bonds, and from US to international, over the last several years. Meanwhile, of course, stocks and US stocks in particular have kept on out-performing. Given the size of many Bogleheads' portfolio, I am guessing the opportunity cost of those rebalancing decisions must be at least in the low-mid six figures.

Do you regret it? Have you calculated the size of what was lost compared to if you had let it run, or rebalanced only less frequently (e.g. once every few years?)

I do not have an asset allocation, therefore have never rebalanced. I only own 1 mutual fund - FXAIX (Fidelity S&P 500 index). The rest is in cash (T-bills). I have no regrets.
What is your allocation between S&P 500 and T-bills? How close are you to retirement?

fourwheelcycle
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Re: Do you regret rebalancing over the last few years?

Post by fourwheelcycle » Mon Nov 18, 2019 8:00 am

ruralavalon wrote:
Sun Nov 17, 2019 11:21 am
No regrets here.
I agree. I have not been on this forum too long, but I have picked up the advice to develop an IPS and stick with it. If your IPS says you intend to rebalance that is what you should do - with no regrets.

My father always told me "hindsight is better than foresight by a damned sight". Whenever I am tempted to second guess myself, in finances or in other endeavors, I always ask whether I took the time to think through a plan and then if I followed it. I only kick myself if I took an action without taking the time to think through a plan.

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Re: Do you regret rebalancing over the last few years?

Post by remomnyc » Mon Nov 18, 2019 8:12 am

I was 80/20 in 2016 when I first reached my early retirement target. Per my IPS, I started reducing my stock exposure. I went to 70/30 in 2017 and 55/45 in 2018. Did I leave money on the table? Perhaps. Do I regret it? Absolutely not. I sleep well at night.

flyingaway
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Re: Do you regret rebalancing over the last few years?

Post by flyingaway » Mon Nov 18, 2019 9:36 am

This is equivalent to asking:

Do you regret not 100% in stocks for the past 10 years?

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Re: Do you regret rebalancing over the last few years?

Post by Clever_Username » Mon Nov 18, 2019 11:41 am

I re-balance to keep my portfolio at my desired level of risk, not because I expect better returns for it. If anything, I anticipate potentially worse returns, as stocks will gain more often than they lose, so I'm more often selling stocks that are going to gain in order to purchase bonds.

Zero regret. The purpose of my asset allocation isn't to optimize my expected gains.
"What was true then is true now. Have a plan. Stick to it." -- XXXX, _Layer Cake_ | | I survived my first downturn and all I got was this signature line.

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Re: Do you regret rebalancing over the last few years?

Post by willthrill81 » Mon Nov 18, 2019 11:43 am

flyingaway wrote:
Mon Nov 18, 2019 9:36 am
This is equivalent to asking:

Do you regret not 100% in stocks for the past 10 years?
Correct. And if we were having this discussion in March of 2009, the question would have basically been "Do you regret not being 100% gold for the past 10 years?"
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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David Jay
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Re: Do you regret rebalancing over the last few years?

Post by David Jay » Mon Nov 18, 2019 11:44 am

Caduceus wrote:
Sun Nov 17, 2019 1:55 am
Have you calculated the size of what was lost compared to if you had let it run...?
This is one of the least productive things one can do in life - Monday morning quarterbacking ones plan after the fact is a great way to live a life of continual dissatisfaction.
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius

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midareff
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Re: Do you regret rebalancing over the last few years?

Post by midareff » Mon Nov 18, 2019 11:49 am

Caduceus wrote:
Sun Nov 17, 2019 1:55 am
If you practice re-balancing, you have probably re-balanced many times from stocks to bonds, and from US to international, over the last several years. Meanwhile, of course, stocks and US stocks in particular have kept on out-performing. Given the size of many Bogleheads' portfolio, I am guessing the opportunity cost of those rebalancing decisions must be at least in the low-mid six figures.

Do you regret it? Have you calculated the size of what was lost compared to if you had let it run, or rebalanced only less frequently (e.g. once every few years?)
I probably should but it was for risk control, which is what it did.

MichCPA
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Joined: Fri Jul 06, 2018 9:06 pm

Re: Do you regret rebalancing over the last few years?

Post by MichCPA » Mon Nov 18, 2019 1:42 pm

fujiters wrote:
Sun Nov 17, 2019 3:42 am
One shouldn't confuse a good outcome with a good plan. Yes, it would have made me more money to be 100% VOO this past decade, but how could I have possibly known that in advance?
+1, This is the definitive answer.

Ferdinand2014
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Re: Do you regret rebalancing over the last few years?

Post by Ferdinand2014 » Mon Nov 18, 2019 2:24 pm

RogerR wrote:
Mon Nov 18, 2019 2:38 am
Ferdinand2014 wrote:
Sun Nov 17, 2019 10:05 pm
Caduceus wrote:
Sun Nov 17, 2019 1:55 am
If you practice re-balancing, you have probably re-balanced many times from stocks to bonds, and from US to international, over the last several years. Meanwhile, of course, stocks and US stocks in particular have kept on out-performing. Given the size of many Bogleheads' portfolio, I am guessing the opportunity cost of those rebalancing decisions must be at least in the low-mid six figures.

Do you regret it? Have you calculated the size of what was lost compared to if you had let it run, or rebalanced only less frequently (e.g. once every few years?)

I do not have an asset allocation, therefore have never rebalanced. I only own 1 mutual fund - FXAIX (Fidelity S&P 500 index). The rest is in cash (T-bills). I have no regrets.
What is your allocation between S&P 500 and T-bills? How close are you to retirement?
I have 2 years of expenses and a moderate amount extra for anticipated large out of budget expenses (car in 6 months for example) in the next 2 years with t-bills. My allocation is approximately 6% (which is arbitrary as I consider my liability and risk in X dollar needs, not percent allocation - volatility concerns) in T-bills at the moment. I have in the past had considered and have owned some small amount of international, but prefer the simplicity of only 1 fund which I have access to in all of my accounts (403b,SEP, Rollover, taxable). I am about 11-12 years for drawdown phase. My DW is 15 years away. I much prefer the simplicity as it keeps me from making behavioral mistakes. This I think outweighs any risk adjusted benefit I may receive with an arbitrary international or bond allocation.
“You only find out who is swimming naked when the tide goes out.“ — Warren Buffett

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