Preference for when to Asset Allocate?

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Coolstavi
Posts: 100
Joined: Mon Oct 10, 2016 8:52 pm

Preference for when to Asset Allocate?

Post by Coolstavi » Fri Nov 04, 2016 4:33 pm

I have the option to reallocate monthly, quarterly or yearly. I currently set it to monthly. Is there any advantage/disadvantages when picking when to set the reallocation?

2retire
Posts: 370
Joined: Wed Jun 13, 2012 9:00 am

Re: Preference for when to Asset Allocate?

Post by 2retire » Fri Nov 04, 2016 5:25 pm

Several studies have shown that one to two years has performed best. This allows stuff that has been outperforming to outperform for longer and when stuff is falling, you aren't constantly throwing good money at bad.

livesoft
Posts: 62307
Joined: Thu Mar 01, 2007 8:00 pm

Re: Preference for when to Asset Allocate?

Post by livesoft » Fri Nov 04, 2016 5:40 pm

2retire wrote:Several studies have shown that one to two years has performed best.
Got any links to those studies please? I'd be interested in reading them.

Here is the bogleheads wiki article on Rebalancing with links to studies:
https://www.bogleheads.org/wiki/Rebalancing

I would like to note that vanguard target retirement and lifestrategy funds appear to have continual rebalancing, but that probably goes along with the deposits and withdrawals made by clients in these funds.

Presumably the OP is asking about a tax-advantaged account that would not be killed on taxes if rebalanced often.
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Coolstavi
Posts: 100
Joined: Mon Oct 10, 2016 8:52 pm

Re: Preference for when to Asset Allocate?

Post by Coolstavi » Fri Nov 04, 2016 6:05 pm

livesoft wrote:
2retire wrote:
Presumably the OP is asking about a tax-advantaged account that would not be killed on taxes if rebalanced often.
Correct.

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