Anyone Rebalancing Today, 3/16/20?

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Average Investor
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Anyone Rebalancing Today, 3/16/20?

Post by Average Investor »

Anyone rebalancing bonds to stocks today 3/16/20?

My IPS calls for it as I am outside of my 5% band, but I have never had to do it in a down market.

I am thinking of going in easy and rebalancing 2% or 3% only.

Thoughts?
Tomorrow never knows.
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simplesimon
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Re: Anyone Rebalancing Today, 3/16/20?

Post by simplesimon »

Average Investor wrote: Mon Mar 16, 2020 1:01 pm Anyone rebalancing bonds to stocks today 3/16/20?

My IPS calls for it as I am outside of my 5% band, but I have never had to do it in a down market.

I am thinking of going in easy and rebalancing 2% or 3% only.

Thoughts?
Do you need to update your IPS?
bloom2708
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Re: Anyone Rebalancing Today, 3/16/20?

Post by bloom2708 »

I was off 5.5% before today's melt down.

I'm not re-balancing yet. I know. I know.

I don't know how far it will fall. I guess you could see close to the close what amount would right the ship or do a chunk of it.

Tough decisions.
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sometimesinvestor
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Re: Anyone Rebalancing Today, 3/16/20?

Post by sometimesinvestor »

I would wait till there is good news on the health front (Not the market front) Until it appears things will begin to get better its hard to imagine stocks will go up much
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TierArtz
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Re: Anyone Rebalancing Today, 3/16/20?

Post by TierArtz »

I’m in the BH fraction that will likely never sell bonds to buy stocks. It will likely harm my long-term portfolio return, but I’m not going to risk losing the FI game. I’ll pour about $150K/year new income into stock indexes for the next few years and then call it quits.
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Average Investor
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Re: Anyone Rebalancing Today, 3/16/20?

Post by Average Investor »

Thanks everyone.

I proceeded cautiously and rebalanced about 1% today. It was harder than anticipated.
Tomorrow never knows.
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watchnerd
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Re: Anyone Rebalancing Today, 3/16/20?

Post by watchnerd »

I hit the band, but not the 1 year mark.
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Irisheyes
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Re: Anyone Rebalancing Today, 3/16/20?

Post by Irisheyes »

Average Investor wrote: Mon Mar 16, 2020 3:03 pm Thanks everyone.

I proceeded cautiously and rebalanced about 1% today. It was harder than anticipated.
Yes. I rebalanced about 1% today also. I closed my eyes while doing it. :wink:

I've learned that I am much better at being fearful when others are greedy than vice versa.
Retiredat57
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Re: Anyone Rebalancing Today, 3/16/20?

Post by Retiredat57 »

I exchanged another 2.5% from bonds to Index 500 today just before the close. This is money I likely won't need access to for at least a decade or more.
3funder
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Re: Anyone Rebalancing Today, 3/16/20?

Post by 3funder »

I increased my equity allocation 5% today alone. I have 30 years until retirement, and I plan to take advantage of the selloff. Was 90% stocks in 2008 and wasn't bothered one bit. Given my acceptance of equity risk and long time horizon, I'm more than comfortable doing this. It also helps that my job is secure (as is my wife's). I didn't think I'd do this, but international and domestic markets are down nearly 40%. They could go down another 40%. Oh well; that's why it's called risk. I was great about staying the course until the selloff, but I get giddy about buying when stocks get crushed.
Global stocks, US bonds, and time.
3funder
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Re: Anyone Rebalancing Today, 3/16/20?

Post by 3funder »

Irisheyes wrote: Mon Mar 16, 2020 3:15 pm
Average Investor wrote: Mon Mar 16, 2020 3:03 pm Thanks everyone.

I proceeded cautiously and rebalanced about 1% today. It was harder than anticipated.
Yes. I rebalanced about 1% today also. I closed my eyes while doing it. :wink:

I've learned that I am much better at being fearful when others are greedy than vice versa.
I was greedy today when others were fearful. Over the long haul, I suppose it's an example of behavioral economics in the right direction, but I still feel like a bad boy.
Last edited by 3funder on Mon Mar 16, 2020 3:32 pm, edited 1 time in total.
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The Man with the Axe
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Re: Anyone Rebalancing Today, 3/16/20?

Post by The Man with the Axe »

Yes. Per our IPS, we used this as an opportunity to add some equities in our taxable account.
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Re: Anyone Rebalancing Today, 3/16/20?

Post by Adam11 »

Average Investor wrote: Mon Mar 16, 2020 1:01 pm Anyone rebalancing bonds to stocks today 3/16/20?

My IPS calls for it as I am outside of my 5% band, but I have never had to do it in a down market.

I am thinking of going in easy and rebalancing 2% or 3% only.

Thoughts?
Yes, both rebalanced and TLH’d today. I was on a plane Thursday afternoon so didn’t get the chance on a top-10 RBD, and then happened to luck into a better price today.
We’ll sleep fine tonite.
LiterallyIronic
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Re: Anyone Rebalancing Today, 3/16/20?

Post by LiterallyIronic »

Average Investor wrote: Mon Mar 16, 2020 1:01 pm Anyone rebalancing bonds to stocks today 3/16/20?

My IPS calls for it as I am outside of my 5% band, but I have never had to do it in a down market.

I am thinking of going in easy and rebalancing 2% or 3% only.

Thoughts?
This is why I don't do any rebalancing. Seems emotionally difficult. My 100/0 401k just stays in stocks all the time and my 90/10 Target Retirement Fund Roth IRA balances itself. Takes all the emotion out of it and makes me a robo-investor.
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Re: Anyone Rebalancing Today, 3/16/20?

Post by bluquark »

I rebalance in December and early March (when I donate to DAF and get back my tax refund, which both cause decently sized swings in AA I need to correct for anyway). Vanguard's rebalancing paper says rebalancing more than once a year doesn't improve returns on average, and I don't think there's an exception to the general rule for bear markets.

So I'm done for the year already, my AA will swing as it wants in the meantime and it saves me a bit of stress and hassle. Enjoy your "cheap" (?) stocks, eager rebalancers.
70/30 portfolio | Equity: global market weight | Bonds: 20% long-term munis - 10% LEMB
retiredjg
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Re: Anyone Rebalancing Today, 3/16/20?

Post by retiredjg »

Yeah, I just did an after hours rebalance. I suppose it won't happen until after hours tomorrow....
Silence Dogood
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Re: Anyone Rebalancing Today, 3/16/20?

Post by Silence Dogood »

Vanguard rebalanced for me (VFFVX).
livesoft
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Re: Anyone Rebalancing Today, 3/16/20?

Post by livesoft »

I did some rebalancing today, but how does that help you? 2020 Roth IRA contributions are about to made, too.
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Re: Anyone Rebalancing Today, 3/16/20?

Post by ThatGuy »

Yep, waited until the afternoon press conference and saw the market dropping.

So I Tax Loss Harvested for the first time duing the current panic.

I nibbled a bit from bonds to stocks last week, but I ran out of time to nibble today. I'll nibble tomorrow if we don't "bounce", and take a large bite after another 15% drop.

I've always hated my bonds, but I had them because the Bogleheads said I had to. Even during the great recession I hated them.
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Re: Anyone Rebalancing Today, 3/16/20?

Post by watchnerd »

3funder wrote: Mon Mar 16, 2020 3:30 pm I was greedy today when others were fearful. Over the long haul, I suppose it's an example of behavioral economics in the right direction, but I still feel like a bad boy.
I feel nothing during any of my buys.

Because they're on auto pilot.

Solves lots of behavioral economics problems.
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kenyan
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Re: Anyone Rebalancing Today, 3/16/20?

Post by kenyan »

I rebalanced on 3/12, so I should be a bit (you know, maybe two more down days) away from another trigger. Following the IPS.
Retirement investing is a marathon.
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Re: Anyone Rebalancing Today, 3/16/20?

Post by KarenC »

I went past my rebalance band so I rebalanced. It’s hard to do, but I’m satisfied that my current AA is right for me.
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ram
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Re: Anyone Rebalancing Today, 3/16/20?

Post by ram »

I transferred 1% to stocks today.
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Re: Anyone Rebalancing Today, 3/16/20?

Post by Elysium »

Bought some today for the first time after the recession started. About 1% to 1.5%.

Having re-balanced too early and too often in 2008, learned the lesson to only do so after significant drops, in 20% increments on the downside. As of today overall down more than -20% for S&P 500, so time to buy first batch. Next purchase will be only if -40% is breached. This is outside of regular contributions that are in auto pilot.
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Re: Anyone Rebalancing Today, 3/16/20?

Post by ososnilknarf »

retiredjg wrote: Mon Mar 16, 2020 3:45 pm Yeah, I just did an after hours rebalance. I suppose it won't happen until after hours tomorrow....
This is the hard part for me. If I rebalance in my 401k, and the order goes in after 3pm ET, it gets executed after the close of the following day.
I just did rebalance on Friday (I hit my IPS rebalancing bands) and got the order in before 3pm. By the end of the day, the market had shot up to close up ~10%, so my purchase of equities was at a much higher price than anticipated and now I was overweight in equities.

With the market moving ~10% in either direction every day, it really feels risky to pull the trigger and rebalance. Seems like it might prudent to just wait until it seems like things have stabilized a bit and then take a look at the AA to rebalance.
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Re: Anyone Rebalancing Today, 3/16/20?

Post by retiredjg »

I've done two rebalances so far. Both were nudges in the right direction, not trying to get all the way back to target.

The first one ended up not doing much since the market rallied the next day. But the day after that, it tanked so the rebalance worked out.

The second one could go either way - no matter what the market does, I think I'll end up in "my bands" but I'll have to wait and see.

I don't try to be precise. It is impossible with a market going up and down as much as this one. I just try to head in the right direction.
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Re: Anyone Rebalancing Today, 3/16/20?

Post by Lalamimi »

lost $38000 today. Market did it for us.
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Re: Anyone Rebalancing Today, 3/16/20?

Post by KlangFool »

ososnilknarf wrote: Mon Mar 16, 2020 7:11 pm
retiredjg wrote: Mon Mar 16, 2020 3:45 pm Yeah, I just did an after hours rebalance. I suppose it won't happen until after hours tomorrow....
This is the hard part for me. If I rebalance in my 401k, and the order goes in after 3pm ET, it gets executed after the close of the following day.
I just did rebalance on Friday (I hit my IPS rebalancing bands) and got the order in before 3pm. By the end of the day, the market had shot up to close up ~10%, so my purchase of equities was at a much higher price than anticipated and now I was overweight in equities.

With the market moving ~10% in either direction every day, it really feels risky to pull the trigger and rebalance. Seems like it might prudent to just wait until it seems like things have stabilized a bit and then take a look at the AA to rebalance.
ososnilknarf,

Your statement does not make any sense to me.

A) The stock market moving 10% in either direction does not imply that the bond move 10% in either direction.

B) With 5/25 band based rebalancing, the difference needs to exceed 25% before rebalancing.

My bond had exceeded the 25% threshold. It is at 125% of the targeted amount. I am selling my bond to buy the stock tomorrow. It is nearly impossible that the bond would drop more than 25% tomorrow.

KlangFool
Last edited by KlangFool on Mon Mar 16, 2020 7:29 pm, edited 1 time in total.
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Re: Anyone Rebalancing Today, 3/16/20?

Post by baconavocado »

I'm planning to rebalance in about a week when I need to get cash for tax payments. My target AA is 60/40 and after the market close today I'm almost at 50/50.
metalworking
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Re: Anyone Rebalancing Today, 3/16/20?

Post by metalworking »

ososnilknarf wrote: Mon Mar 16, 2020 7:11 pm
retiredjg wrote: Mon Mar 16, 2020 3:45 pm Yeah, I just did an after hours rebalance. I suppose it won't happen until after hours tomorrow....
This is the hard part for me. If I rebalance in my 401k, and the order goes in after 3pm ET, it gets executed after the close of the following day.
I just did rebalance on Friday (I hit my IPS rebalancing bands) and got the order in before 3pm. By the end of the day, the market had shot up to close up ~10%, so my purchase of equities was at a much higher price than anticipated and now I was overweight in equities.

With the market moving ~10% in either direction every day, it really feels risky to pull the trigger and rebalance. Seems like it might prudent to just wait until it seems like things have stabilized a bit and then take a look at the AA to rebalance.
I thought market price was set at 4pm ET for mutual funds when the market closes
ososnilknarf
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Re: Anyone Rebalancing Today, 3/16/20?

Post by ososnilknarf »

KlangFool wrote: Mon Mar 16, 2020 7:27 pm
ososnilknarf wrote: Mon Mar 16, 2020 7:11 pm
retiredjg wrote: Mon Mar 16, 2020 3:45 pm Yeah, I just did an after hours rebalance. I suppose it won't happen until after hours tomorrow....
This is the hard part for me. If I rebalance in my 401k, and the order goes in after 3pm ET, it gets executed after the close of the following day.
I just did rebalance on Friday (I hit my IPS rebalancing bands) and got the order in before 3pm. By the end of the day, the market had shot up to close up ~10%, so my purchase of equities was at a much higher price than anticipated and now I was overweight in equities.

With the market moving ~10% in either direction every day, it really feels risky to pull the trigger and rebalance. Seems like it might prudent to just wait until it seems like things have stabilized a bit and then take a look at the AA to rebalance.
ososnilknarf,

Your statement does not make any sense to me.

A) The stock market moving 10% in either direction does not imply that the bond move 10% in either direction.

B) With 5/25 band based rebalancing, the difference needs to exceed 25% before rebalancing.

My bond had exceeded the 25% threshold. It is at 125% of the targeted amount. I am selling my bond to buy the stock tomorrow. It is nearly impossible that the bond would drop more than 25% tomorrow.

KlangFool
Maybe the confusion was me saying I was overweight in equities after the transfer. I didn't mean truly "overweight" as in over my rebalancing band limit. I just meant over my AA % that I was targeting with the transfer.

So, in the case of what happened to me, the price of the equities index fund was about 10% higher than when I checked my AA and calculated the amount of money to transfer. Therefore I was paying more for the equities than I had calculated.

The way it works in my Merril Lynch 401k is that you specify the amount you want to sell of one fund, then allocate the proceeds of that to the fund(s) you want to buy. So, I was selling a larger amount of bonds than it really took to get me back to my target AA, resulting in being "overweight" in equities by ~1%+.

Not really a huge deal, but I guess all I'm saying is that it makes me nervous because the market can move a lot between the time you place your order and the time the order is executed. I was excited to buy the stock fund at the low price after the market dropped 10% the previous day, but actually bought them after it rose another 10%.
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Re: Anyone Rebalancing Today, 3/16/20?

Post by ososnilknarf »

metalworking wrote: Mon Mar 16, 2020 7:29 pm
ososnilknarf wrote: Mon Mar 16, 2020 7:11 pm
retiredjg wrote: Mon Mar 16, 2020 3:45 pm Yeah, I just did an after hours rebalance. I suppose it won't happen until after hours tomorrow....
This is the hard part for me. If I rebalance in my 401k, and the order goes in after 3pm ET, it gets executed after the close of the following day.
I just did rebalance on Friday (I hit my IPS rebalancing bands) and got the order in before 3pm. By the end of the day, the market had shot up to close up ~10%, so my purchase of equities was at a much higher price than anticipated and now I was overweight in equities.

With the market moving ~10% in either direction every day, it really feels risky to pull the trigger and rebalance. Seems like it might prudent to just wait until it seems like things have stabilized a bit and then take a look at the AA to rebalance.
I thought market price was set at 4pm ET for mutual funds when the market closes
Yes, that is my understanding. But my Merril Lynch 401k won't execute the transfer until the end of the next day if the order is placed after 3pm ET.
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Re: Anyone Rebalancing Today, 3/16/20?

Post by jjface »

TierArtz wrote: Mon Mar 16, 2020 1:18 pm I’m in the BH fraction that will likely never sell bonds to buy stocks. It will likely harm my long-term portfolio return, but I’m not going to risk losing the FI game. I’ll pour about $150K/year new income into stock indexes for the next few years and then call it quits.

Easy to feel that way when you have $150k a year to throw in lol
peddler12
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Re: Anyone Rebalancing Today, 3/16/20?

Post by peddler12 »

S&P Futures are up nearly 4%. Not again.
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Re: Anyone Rebalancing Today, 3/16/20?

Post by peddler12 »

I canceled my move. I have until 12:00 Noon tomorrow to change my mind. I'll take advantage of the window.
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Rowan Oak
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Re: Anyone Rebalancing Today, 3/16/20?

Post by Rowan Oak »

I did last week (and maybe the week before -can't remember) and a little this morning. Another significant down day tomorrow and I may again.

Once I get around 5-6% out of balance I put in some limit orders for ETFs and/or do an exchange between traditional index funds.

At this point I am slowly trying to get back in balance and not doing everything in one day.
“If you can get good at destroying your own wrong ideas, that is a great gift.” – Charlie Munger
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Rowan Oak
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Re: Anyone Rebalancing Today, 3/16/20?

Post by Rowan Oak »

retiredjg wrote: Mon Mar 16, 2020 7:21 pm I've done two rebalances so far. Both were nudges in the right direction, not trying to get all the way back to target.

The first one ended up not doing much since the market rallied the next day. But the day after that, it tanked so the rebalance worked out.

The second one could go either way - no matter what the market does, I think I'll end up in "my bands" but I'll have to wait and see.

I don't try to be precise. It is impossible with a market going up and down as much as this one. I just try to head in the right direction.
I like the way you described the way you are rebalancing: "nudging in the right direction". This is exactly what I try to do when rebalancing in a bear market.
“If you can get good at destroying your own wrong ideas, that is a great gift.” – Charlie Munger
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