Asset Allocation & Re-balancing

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jbsmith05
Posts: 121
Joined: Fri Apr 01, 2016 2:01 pm

Asset Allocation & Re-balancing

Post by jbsmith05 » Thu Dec 06, 2018 11:39 am

I have a couple questions on AA and re-balancing that I'm hoping to get some guideance on.

Presumably like many of us I have a handful of different investment accounts at different firms:
-- Fidelity Brokerage
-- Fidelity 401k
-- 2 Fidelity Roth IRAs
-- Fidelity Trad IRA
-- 2 Vanguard Brokerage accounts
-- T. Rowe Price Brokerage

Question 1) When looking at your asset allocation, do you do this across all of these? Or would you look say your AA for retirement, then your AA for taxable brokerages, etc?

Q2) Doing it across all of the accounts, I presume the easiest way to do this is through some type of too like Personal Capital or Fidelity's Full View that can aggregate them? Any recommendation's as to which to use?

Q3) How do you re-balance across all of them? Do any of the aforementioned tools tell you how much to sell/buy of which fund or must this be done manually. Of course this gets even more complex if you have a different AA for retirement vs other reasons (question 1).

Thanks!

Jordan4FI
Posts: 133
Joined: Mon May 28, 2018 11:00 am
Location: Honduras

Re: Asset Allocation & Re-balancing

Post by Jordan4FI » Thu Dec 06, 2018 12:00 pm

It would also be easier if you would have all your funds in the same family. Crossing over 3 companies seems to add additional pressure and stress.. Would feel comfortable moving all into your preferred one?

If not, then your AA covers the whole portfolio (taxable and non) it would be up to you in what fund/company you want your %'s to be. But that will not always be easy if you need to rebalance from one company to another.

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

Re: Asset Allocation & Re-balancing

Post by livesoft » Thu Dec 06, 2018 12:13 pm

1. Yes, across all accounts. I have one single portfolio spread across accounts. Some of my accounts have a single fund in them and are included of course in asset allocation analysis, but need no transactions during a rebalancing operation.

2. I listed a few tools that are easy to use in this thread:
viewtopic.php?t=150267

Of those tools, I typically use the Fidelity Analysis tab in a special way or the X-ray from Morningstar available at my broker. M* X-ray was free at TRowePrice for instance and probably still is.

3. See the above link. Don't make it complicated as neither asset allocation nor rebalancing is an exact science nor need for a portfolio. Close enough is better than good enough.
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jbsmith05
Posts: 121
Joined: Fri Apr 01, 2016 2:01 pm

Re: Asset Allocation & Re-balancing

Post by jbsmith05 » Thu Dec 06, 2018 12:14 pm

I like to keep the 3 families because of well - diversification - for the same reasons we diversify within our own investing. Also some of these are from inheritances, the fund is performing well, and if I consolidate and do an in-kind transfer then there's fees to purchase more, if Liquidate then there's tax implications.

Sounds like I'd need to AA across everything...and manually rebalance.

megabad
Posts: 828
Joined: Fri Jun 01, 2018 4:00 pm

Re: Asset Allocation & Re-balancing

Post by megabad » Thu Dec 06, 2018 12:47 pm

jbsmith05 wrote:
Thu Dec 06, 2018 12:14 pm
I like to keep the 3 families because of well - diversification - for the same reasons we diversify within our own investing. Also some of these are from inheritances, the fund is performing well, and if I consolidate and do an in-kind transfer then there's fees to purchase more, if Liquidate then there's tax implications.

Sounds like I'd need to AA across everything...and manually rebalance.
I wouldn't say that you "need" to but I do (and apparently the above posters do as well). For my purposes, I have to look at everything when I transact anyway to avoid wash sales so I might as well consider the whole portfolio allocation. But if I wanted to I could move into the Target Retirement fund at 3 different brokerage houses and never manually rebalance. I wouldn't because of my tax situation and desire to avoid expenses, but nothing inherently wrong with that if say, all my assets were in IRAs/401ks.

btenny
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Joined: Sun Oct 07, 2007 6:47 pm

Re: Asset Allocation & Re-balancing

Post by btenny » Thu Dec 06, 2018 1:08 pm

You do realize that you can buy and own Vanguard and TRP mutual funds and ETFs in a most standard brokerage accounts. I would move all your taxable Fidelity and TRP stuff and Vanguard stuff into one account to simplify your life. In my case I consolidated most of my stuff to a single Wells Fargo Brokerage account. I hold TRP and Vanguard stuff in that account. I pay no trade fees and can buy Admiral shares.

My TRP and Vanguard stuff in my IRA is on dividend reinvest and I pay no fees for these purchases. In my taxable account I only own Vanguard stuff and do not do auto reinvest.

As far as rebalancing and tracking my accounts I have two custom Excel spreadsheets that I built. I did this back in 2003 and have used them since. They track my asset allocation by type in one sheet and all of my accounts in another. Both sum up to my total net worth and cross check to show they balanced. They are pretty straight forward and easy to update once every month or two and at year end.

I do not rebalance often. Maybe once a year in the fall at most. I try to stick to this date. I rebalance across all my accounts and do not worry if one is 45/55 and the other is 35/65 and long as they total up to 40/60. I have to manually choose what funds to buy and sell to do the rebalance. No software does anything beyond tell me the new totals.

Good Luck.

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