Rebalance now or stick to the plan

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Topic Author
mgk2010
Posts: 37
Joined: Wed Dec 26, 2018 11:16 am

Rebalance now or stick to the plan

Post by mgk2010 »

Hi,

I have been diligently rebalancing two times a year to come close to my AA (either rebalance or move new money to assess class that is falling behind). For me this is mostly in Apr and Oct. However i am now seeing a close to 5% deviation from my AA. Could i request some opinions on:

- if it is a good time to move $ from bonds to stocks in my tax preferred accounts now OR
- just wait for my pre-determined re-balancing schedule

Do these immediate rebalances, after drops such as what we are seeing now, matter in the long term (+15 yrs to retirement)?

Thanks in advance
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sometimesinvestor
Posts: 1271
Joined: Wed May 13, 2009 6:54 am

Re: Rebalance now or stick to the plan

Post by sometimesinvestor »

FOr me STaying the course is not selling but I don't think you should buy because stocks are "cheap". WAit for some news on the health front. THat will be the light at the end of the tunnel. If you buy merely because stocks are down 20+ % the light at the end of the tunnel could be a locomotive.
lakpr
Posts: 6726
Joined: Fri Mar 18, 2011 9:59 am

Re: Rebalance now or stick to the plan

Post by lakpr »

No one has a crystal ball about the future, but if I were you, I would re-balance at the 5% trigger.
DesertInvestor
Posts: 194
Joined: Tue Dec 20, 2016 1:04 pm

Re: Rebalance now or stick to the plan

Post by DesertInvestor »

I am wrestling with the same. But if we are long term investors and thinking far ahead, should we no just rebalance and let it be? The lump sum argument still holds does it not? Even if the knife continues to fall, long term when this crisis is far gone we should be fine if you read the bogleheads posts pre-crisis. I tell myself I'll never panic like 2008 again, but so much easier in retrospect. I'm planning on doubling my monthly investment back to asset allocation.
sailaway
Posts: 2550
Joined: Fri May 12, 2017 1:11 pm

Re: Rebalance now or stick to the plan

Post by sailaway »

I have faith in my plan. We shall see how things play out in June, when it is time to rebalance.
Topic Author
mgk2010
Posts: 37
Joined: Wed Dec 26, 2018 11:16 am

Re: Rebalance now or stick to the plan

Post by mgk2010 »

Thank for the response. I really like this analogy and i will stay the course.
sometimesinvestor wrote: Thu Mar 12, 2020 11:42 am the light at the end of the tunnel could be a locomotive.
Topic Author
mgk2010
Posts: 37
Joined: Wed Dec 26, 2018 11:16 am

Re: Rebalance now or stick to the plan

Post by mgk2010 »

Thanks for all the responses. I guess i will stay the course to my pre-determine re-balance interval, and not try to time the market.
chevca
Posts: 3473
Joined: Wed Jul 26, 2017 11:22 am

Re: Rebalance now or stick to the plan

Post by chevca »

A plan is there for a reason, right? Stick to it.
tesuzuki2002
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Joined: Fri Dec 11, 2015 12:40 pm

Re: Rebalance now or stick to the plan

Post by tesuzuki2002 »

mgk2010 wrote: Thu Mar 12, 2020 11:40 am - if it is a good time to move $ from bonds to stocks in my tax preferred accounts now OR
- just wait for my pre-determined re-balancing schedule

Do these immediate rebalances, after drops such as what we are seeing now, matter in the long term (+15 yrs to retirement)?
How much we talking about?? Think you can just adjust your current contributions to fill in the gaps??

If you have a $1.5M portfolio with income of $80K then that doesn't work very well and a reblance may be in order...

If you are working with $500K portfolio.... and $100K income... directing new contributions to bring you back in line could work over the next few months... to keep filling in the holes as I always say.
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