When did you rebalance YTD?

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Cannibly
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When did you rebalance YTD?

Post by Cannibly »

I'm curious regarding at what point you did any rebalancing since January 1 and what those trigger points were. I'm most interested in those with either a 3 fund or 4 fund portfolio (the latter like the LifeStrategy funds). I'm asking because I/we own the Vanguard LifeStrategy Moderate growth as the bulk of our retirement portfolio and am considering splitting it into its component parts to pick up the lower expense ratios. Also I wonder if I can pick up any rebalancing bonus over the upcoming years, though that may be a tough one to do with successfully. Vanguard actually added some minor bps to performance YTD over the individual component funds if they were left to ride.
sailaway
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Re: When did you rebalance YTD?

Post by sailaway »

I just did a six month check in this morning. Rebalance triggers have not been reached.

Our situation is somewhat unique, in so far as we add most of our new monies to stocks. Ibonds are the exception, but we haven't bought any yet this year.
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Cannibly
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Re: When did you rebalance YTD?

Post by Cannibly »

Thanks. I probably should have specified that we are retired and are not adding any new money to our retirement accounts. We're also about 4 years away from having to take RMD's.
Nver2Late
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Re: When did you rebalance YTD?

Post by Nver2Late »

I nudge rebalanced last Friday at around VTI 195 in addition to adding new 2022 contribution$, which was at about -20% YTD. My calculations recommended rebalance at -17%, but I was hesitant.
"Better is the enemy of good." Good is good.
mega317
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Re: When did you rebalance YTD?

Post by mega317 »

I rebalanced about 6 weeks ago, the trigger being I finally remembered and had some time to do it. First time since covid I believe. I don't get too bent out of shape about being a few percent off one way or another. I feel that shirking work or family to play with my accounts (or internet forums!) too much will be more costly than accidentally being 65/35 when i've decided to be 70/30 for a few more years.
Topic Author
Cannibly
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Re: When did you rebalance YTD?

Post by Cannibly »

Thanks. Looks like your hesitation paid off. Do you typically use a percentage deviation as your trigger point?
livesoft
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Re: When did you rebalance YTD?

Post by livesoft »

My records show I rebalanced on
01/03-04
01/19
02/03
03/30-31
04/18-19
04/25-26
05/09
05/17
05/18
05/23-24
05/27
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RetiredAL
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Re: When did you rebalance YTD?

Post by RetiredAL »

I did my re-balancing in Jan per IPS schedule. Next one is scheduled for July, where I will mainly look at the withdrawal IRA. I check that every 6mo as the withdrawals/transfers are taken monthly are from a short term treasury fund.
Chip
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Re: When did you rebalance YTD?

Post by Chip »

With 5/25 bands on a 60/40 portfolio I haven't rebalanced at all.
Nver2Late
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Re: When did you rebalance YTD?

Post by Nver2Late »

Cannibly wrote: Sat May 28, 2022 1:00 pm Thanks. Looks like your hesitation paid off. Do you typically use a percentage deviation as your trigger point?
I wouldn't say typically since I really try hard not to rebalance by adjusting savings rate, but in this case it was a combination of stocks on sale and the asset allocation percentage supporting a rebalance.

My equities are almost all VTI/VTSAX. That simplifies things quite a bit allowing me to calculate the VTI target value I need to hit my 5% band when the market starts dropping significantly. My FI is down 2.19% YTD, so that -17% Eq target plus the -2.19% Fixed income is about the 20% variance I needed to hit the band.

My hesitation was primary concern over the market downward momentum. Right now it looks good, but next week may be an entirely different story. It took me a week to decide to trust the numbers.
"Better is the enemy of good." Good is good.
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Re: When did you rebalance YTD?

Post by jebmke »

My last rebalance was in late March when dividends were distributed as cash. Other than these mini-rebalances, which are involuntary, I have not re-balanced in a long time. Even in March 2020 I did not hit my trigger to buy equity.
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delamer
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Re: When did you rebalance YTD?

Post by delamer »

I did a check earlier today to see if rebalancing was warranted.

It wasn’t.
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tibbitts
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Re: When did you rebalance YTD?

Post by tibbitts »

I'm not happy with Portfolio Watch (is anybody???) but don't track allocation any other way, and it hasn't moved by more than 2% (in terms of stock percentage at least) one way or the other at any time this year. I just got another Portfolio Watch pop-up satisfaction survey today; it was at least the second I've replied to this year.
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Re: When did you rebalance YTD?

Post by AerialWombat »

deleted
Last edited by AerialWombat on Thu Aug 25, 2022 5:30 pm, edited 1 time in total.
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Re: When did you rebalance YTD?

Post by livesoft »

tibbitts wrote: Sat May 28, 2022 1:34 pm I'm not happy with Portfolio Watch (is anybody???) but don't track allocation any other way, and it hasn't moved by more than 2% (in terms of stock percentage at least) one way or the other at any time this year. I just got another Portfolio Watch pop-up satisfaction survey today; it was at least the second I've replied to this year.
With US stocks, international stocks, and bond funds all performing about the same so far in 2022, I would not expect the stock:bond percentages to move very much at all. That's why I have more than one "trigger" for rebalancing than just the stock:bond percentages.
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dcabler
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Re: When did you rebalance YTD?

Post by dcabler »

None. Not even close to any of my triggers.

Cheers
Chris K Jones
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Re: When did you rebalance YTD?

Post by Chris K Jones »

None this year. LAst time I rebalanced was during the Spring 2020 Covid drop. I have a 60/40 portfolio with 5% bands. I have been doing an awful lot of tax loss harvesting but no rebalancing.
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Re: When did you rebalance YTD?

Post by Jack FFR1846 »

I rebalance when the portfolio is off by 5%. Haven't done it once this year.

Looking farther back, I did the rebalance (one transaction of sell this and use proceeds to buy that) on Dec 28, 2021.
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Ricola
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Re: When did you rebalance YTD?

Post by Ricola »

Don't know, I rely on Balanced Fund to do so.
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Re: When did you rebalance YTD?

Post by helloeveryone »

Cannibly wrote: Sat May 28, 2022 12:33 pm I'm curious regarding at what point you did any rebalancing since January 1 and what those trigger points were. I'm most interested in those with either a 3 fund or 4 fund portfolio (the latter like the LifeStrategy funds). I'm asking because I/we own the Vanguard LifeStrategy Moderate growth as the bulk of our retirement portfolio and am considering splitting it into its component parts to pick up the lower expense ratios. Also I wonder if I can pick up any rebalancing bonus over the upcoming years, though that may be a tough one to do with successfully. Vanguard actually added some minor bps to performance YTD over the individual component funds if they were left to ride.
Not yet. Portfolio is still 80:20. Every paycheck my contributions plus match go into 100% S&P 500.
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Cannibly
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Re: When did you rebalance YTD?

Post by Cannibly »

I don't think I fully understand balance bands and/or the percentage method of deciding when to rebalance. Using 5% as the trigger number, does it work like this for a 60/40 portfolio:

1. Do you rebalance when the equity side of your target percentage gains or falls by a factor of 5%, which would mean rebalancing at 63% (5% of 60 on the upside), and at 57% (5% of 60 on the downside)?

2. Do you rebalance when the bond side changes by 5%, which in this portfolio (and by the methodology used in #1) you would rebalance when the bond grow to 42% or fall to 38%)?

3. Or do you rebalance when the asset shift goes from 60/40, to 55/45, or to 65/35?

I've read Vanguard's piece on when to rebalance which says it doesn't make a whole lot of difference whether the rebalance is time specific - monthly, quarterly, yearly - or a designated percentage difference, or a combination of the two. What's important is that one should be consistent with whatever the approach one chooses.

Again, I ask because I'm trying to determine if it's worth the trouble to go from LifeStrategy Moderate Growth to its components.
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Re: When did you rebalance YTD?

Post by DSBH »

Cannibly wrote: Sat May 28, 2022 2:57 pm
3. Or do you rebalance when the asset shift goes from 60/40, to 55/45, or to 65/35?
My “normal” AA is 50/50 as in 2021, and my plan is to “rebalance” if it comes close to either 55/45 or 45/55.

I also adjust my AA and deviate from my “normal” AA if market drops significantly. Using the 2021 ending value of the SP500 index as benchmark, I increase my stock AA by 5% for each 10% drop in the SP500 index from the benchmark (e.g. AA adjusted to 55/45 for a 10% drop). So my most recent AA “adjustment” was to 60/40 about 10 days ago.
Last edited by DSBH on Sun May 29, 2022 1:17 am, edited 1 time in total.
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Re: When did you rebalance YTD?

Post by Nver2Late »

Cannibly wrote: Sat May 28, 2022 2:57 pm I don't think I fully understand balance bands and/or the percentage method of deciding when to rebalance. Using 5% as the trigger number, does it work like this for a 60/40 portfolio:

1. Do you rebalance when the equity side of your target percentage gains or falls by a factor of 5%, which would mean rebalancing at 63% (5% of 60 on the upside), and at 57% (5% of 60 on the downside)?

2. Do you rebalance when the bond side changes by 5%, which in this portfolio (and by the methodology used in #1) you would rebalance when the bond grow to 42% or fall to 38%)?

3. Or do you rebalance when the asset shift goes from 60/40, to 55/45, or to 65/35?

I've read Vanguard's piece on when to rebalance which says it doesn't make a whole lot of difference whether the rebalance is time specific - monthly, quarterly, yearly - or a designated percentage difference, or a combination of the two. What's important is that one should be consistent with whatever the approach one chooses.

Again, I ask because I'm trying to determine if it's worth the trouble to go from LifeStrategy Moderate Growth to its components.
I do #3. When my overall asset allocation changes 5% off target. (I was 75/25 at the market high, so it was rebalance time once it was below 70/30).
"Better is the enemy of good." Good is good.
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Re: When did you rebalance YTD?

Post by pedalman701 »

I use 5% bands as a trigger for our 65/35 allocation. I have yet to rebalance YTD. Stocks only crept up to 67% for a high, but that is not what my IPS specifies.
A Recovering Jonesoholic | 55% US/10% Intl/35% Bonds
delamer
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Re: When did you rebalance YTD?

Post by delamer »

Cannibly wrote: Sat May 28, 2022 2:57 pm I don't think I fully understand balance bands and/or the percentage method of deciding when to rebalance. Using 5% as the trigger number, does it work like this for a 60/40 portfolio:

1. Do you rebalance when the equity side of your target percentage gains or falls by a factor of 5%, which would mean rebalancing at 63% (5% of 60 on the upside), and at 57% (5% of 60 on the downside)?

2. Do you rebalance when the bond side changes by 5%, which in this portfolio (and by the methodology used in #1) you would rebalance when the bond grow to 42% or fall to 38%)?

3. Or do you rebalance when the asset shift goes from 60/40, to 55/45, or to 65/35?

I've read Vanguard's piece on when to rebalance which says it doesn't make a whole lot of difference whether the rebalance is time specific - monthly, quarterly, yearly - or a designated percentage difference, or a combination of the two. What's important is that one should be consistent with whatever the approach one chooses.

Again, I ask because I'm trying to determine if it's worth the trouble to go from LifeStrategy Moderate Growth to its components.
Despite being, generally, a number-literate group, Bogleheads can get sloppy about the difference between “percentage change” and “percentage-point change” when they post.

That may be why you are confused.
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. - Alexandre Dumas, fils
nalor511
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Re: When did you rebalance YTD?

Post by nalor511 »

Feels like I've been rebalancing every other day lately. In both directions. I've been doing it when one of my positions goes up or down more then 2.5% than the others, as my threshold during this recent volatility. It's been happening a lot. We'll see
placeholder
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Re: When did you rebalance YTD?

Post by placeholder »

I haven't hit my overall stock bond rebalance point although I should do some rebalancing between domestic and international.
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WoodSpinner
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Re: When did you rebalance YTD?

Post by WoodSpinner »

Cannibly wrote: Sat May 28, 2022 2:57 pm I don't think I fully understand balance bands and/or the percentage method of deciding when to rebalance. Using 5% as the trigger number, does it work like this for a 60/40 portfolio:

1. Do you rebalance when the equity side of your target percentage gains or falls by a factor of 5%, which would mean rebalancing at 63% (5% of 60 on the upside), and at 57% (5% of 60 on the downside)?

2. Do you rebalance when the bond side changes by 5%, which in this portfolio (and by the methodology used in #1) you would rebalance when the bond grow to 42% or fall to 38%)?

3. Or do you rebalance when the asset shift goes from 60/40, to 55/45, or to 65/35?

I've read Vanguard's piece on when to rebalance which says it doesn't make a whole lot of difference whether the rebalance is time specific - monthly, quarterly, yearly - or a designated percentage difference, or a combination of the two. What's important is that one should be consistent with whatever the approach one chooses.

Again, I ask because I'm trying to determine if it's worth the trouble to go from LifeStrategy Moderate Growth to its components.
Here is the section on Rebalancing from my Retirement Policy Statement. Hope this helps….

Rules for Re-Balancing:
1. Leverage opportunities to rebalance through Expense Funding, RMDs, QCDs by targeting specific Assets that are over-weighted.
2. Re-balance periodically as needed if a 5% Actual or 20% Relative threshold is exceeded. The goal is to keep the Asset Allocation you are comfortable with while still allowing the market to move and change. Short-term and/or small deviations are simply not worth the effort and can be counter-productive.
Example 1 (20% Relative Re-balancing):
If fund XYZ has an allocation of 10% (20% of 10 is 2%) than you would re-balance, if:
a. If it went down to 8% (10% - 2%), you would buy more by selling other Assets
b. If it went up to 12% (10% + 2%), you would sell and by other assets.
Example 2 (5% Actual Re-balancing)
if fund XYZ has an allocation of 30% than you would re-balance, if:
a. If it went down to 25% (30% - 5%), you would buy more by selling other Assets
b. If it went up to 35% (30% + 5%), you would sell and by other assets.
3. Realize that it can be terrifying to re-balance as the market is dropping but it is necessary and over time will be proven to be the best decision.
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Re: When did you rebalance YTD?

Post by Vanguard User »

What about for 1 fund portfolio? How do I rebalance?
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Re: When did you rebalance YTD?

Post by afan »

I check for rebalancing twice a year, late June and late December. I use wide bands. With both stocks and bonds down, I would not be surprised if I have not hit my bands. I will find out when I check in about a month.
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Re: When did you rebalance YTD?

Post by Jack FFR1846 »

Everyone can do a method they've decided fits them best. My portfolio is inspired by the 3 fund portfolio. I have my own idiosyncrasies that I'll explain.

Line 2) My stock/bond target is 50/50. When I reach 55/45 or 45/55, I rebalance.

I do hold international stock (developed) but do not consider it in my portfolio percentage. I'm letting it float and not ever adding to it. It's my way to let it move down, following what Jack Bogle explained and I agree with. Every single US company has international portions. Most chip makers sell more overseas than they do in the US. Coca Cola is all over the world along with KFC and Tesla and Buick and Ford and everyone.

I don't count my cash and checking accounts anywhere in my portfolio.

A big part of my Bond portion is US Savings bonds even though I can't really rebalance into them.

So with all that gobbldygook, the simple thing is what I said in Line 2.
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Cannibly
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Re: When did you rebalance YTD?

Post by Cannibly »

Thanks everyone for the replies. Looks like people take a variety of approaches (not a big surprise), and that's helpful to know. I'll give it some more thought but am now leaning to leave things as is in the LS fund. Having Vanguard do the rebalancing in the fund adds one more more layer of simplicity and provides one less thing to think about.
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Re: When did you rebalance YTD?

Post by UpperNwGuy »

I did some very minor rebalancing in March 2022 when I was tax loss harvesting both stock and bond ETFs.
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Re: When did you rebalance YTD?

Post by GMCZ71 »

Cannibly wrote: Sun May 29, 2022 12:42 am Also I wonder if I can pick up any rebalancing bonus over the upcoming years, though that may be a tough one to do with successfully

I'll give it some more thought but am now leaning to leave things as is in the LS fund. Having Vanguard do the rebalancing in the fund adds one more more layer of simplicity and provides one less thing to think about.
To be tax efficient your taxable account should not hold LS funds, thats where you should do the individual index. In another thread you were $200k in cash. Look at all your accounts as a whole and not do 60/40 in each account. Your rebalancing bonus will be lower taxes and lower cost basis.

Example
In Jan you moved $200k to SP500 in taxable at a the high point but moved $200k in 403/Ira to bond or money market. Your 60/40 is still the same but in different accounts. This month SP500 down 20% you exchange it for Total Stock index at the same time. You AA is still 60/40 now you have $40k in losses that carry forward and cost basis is lower. The last 5 days market is up (my lots are all green in taxable account) :D

Next week maybe things drop again, since its been less than 30 days I would use Vanguard large cap as tax loss partner and do it again. Maybe at some point you get back to SP500/Total Stock index at a 5-10 year low.
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Re: When did you rebalance YTD?

Post by Iorek »

Cannibly wrote: Sun May 29, 2022 12:42 am Thanks everyone for the replies. Looks like people take a variety of approaches (not a big surprise), and that's helpful to know. I'll give it some more thought but am now leaning to leave things as is in the LS fund. Having Vanguard do the rebalancing in the fund adds one more more layer of simplicity and provides one less thing to think about.
This has been my approach. I am happy to pay a few basis points to not be responsible for rebalancing, especially since I know it would be very easy to put it off.
Capricorn51
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Re: When did you rebalance YTD?

Post by Capricorn51 »

Not really a rebalance so for this year. My target is 40/60, with allowing five percentage point deviations, and I examine monthly. Equity position about 38% right now, so rebalancing not triggered.
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Cannibly
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Re: When did you rebalance YTD?

Post by Cannibly »

John, that's an interesting idea to use the $200K in the way you suggested. But at this time those funds are reserved for emergencies/big expenses when they come up, and for paying the tax bill on Traditional IRA to Roth conversions over the next few years. $200K may seem like a lot to keep in cash, but it does provide peace of mind. BTW, the Roth accounts we have are nearly all equity so we are paying attention to asset location.
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Re: When did you rebalance YTD?

Post by JDave »

I rebalanced on my birthday, May 1st. I don't have rebalancing triggers, although I did do some Roth conversions over the recent downturn. I did them in small increments each day the S&P500 went down 1% or more.
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Re: When did you rebalance YTD?

Post by MathWizard »

I hit my rebalancing band about the day the news reported the Dow was down 12+ % YTD. I traded some bonds for stocks .
That was maybe 2 weeks ago.

My bonds had dropped as well, but not nearly as far as stocks.

I rebalanced once in 2020 and once in 2021.
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Re: When did you rebalance YTD?

Post by Broken Man 1999 »

My desired AA is 55%equities/45%bonds.

My rebalance band is 5%.

So far the highest my portfolio has been is 58% equities/42% bonds, so no rebalance YTD.

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IRouteIP
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Re: When did you rebalance YTD?

Post by IRouteIP »

Beginning of the year when I moved from 80/20 to 75/25. I keep contributing to the 401k at 75/25 and as of Friday I am still only a few decimal points off from 75/25.

I guess stocks and bonds falling together kept it simple. LOL
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Re: When did you rebalance YTD?

Post by Wannaretireearly »

March and April, when I had time to tinker.
Only rebalanced by buying more aggressive TRD funds. I guess I’m now comfortable with a 90/10 AA.

Also TLHed, and bought stock fund instead of bond.
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Re: When did you rebalance YTD?

Post by manatee2005 »

Two days before the Ukraine war.
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Re: When did you rebalance YTD?

Post by FlamePoint »

I rebalanced end of January when I hit one of my rebalance bands (5%). However, with a 55/45 AA, haven't needed to do anymore since then.
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Re: When did you rebalance YTD?

Post by GMCZ71 »

Cannibly wrote: Sun May 29, 2022 11:03 am John, that's an interesting idea to use the $200K in the way you suggested. But at this time those funds are reserved for emergencies/big expenses when they come up, and for paying the tax bill on Traditional IRA to Roth conversions over the next few years. $200K may seem like a lot to keep in cash, but it does provide peace of mind. BTW, the Roth accounts we have are nearly all equity so we are paying attention to asset location.
Peace of mind or as some say "helps me sleep at night" is very important so you do you. I used the full $200k for the example but you can do a smaller amount.
John | * Friends and family and money | * What you recommend will have periods of underperformance. You will be blamed. | * You avoid the suspicion of "self-serving." by Taylor Larimore
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Re: When did you rebalance YTD?

Post by eddot98 »

Helpful thread as it spurred me to see where we are at. I have been a little too lazy lately. Retirement and the virus has done that. Target is 50/50 with a 5% trigger. Today we are at 48/52 stocks/fixed. January 1st we were at 53/47 stocks/fixed. I had been thinking that maybe we should be doing something, but my laziness has been justified.
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Raspberry-503
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Re: When did you rebalance YTD?

Post by Raspberry-503 »

No rebalancing this year with my AA of 65/35
Things have moved around some but have not hit my 5/25 rules, at least not when I check in the middle of each month. That's when I transfer some money into my brokerage and invest it into lagging equities assets (no bonds in my brokerage), my 401(k) also invests automatically and is mostly bonds.

I'm guessing that even without the contributions I would not have had to rebalance but I could be wrong.
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Re: When did you rebalance YTD?

Post by ThisJustIn »

afan wrote: Sat May 28, 2022 6:13 pm I check for rebalancing twice a year, late June and late December. I use wide bands. With both stocks and bonds down, I would not be surprised if I have not hit my bands. I will find out when I check in about a month.
Question here: I used to do June + December as well, but because of volatility around December (year end, stock sells due to TLH), I moved to a more stable rebalancing cycle: March + September. Is June + December still a good time to rebalance?
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Location: Sunnyvale, CA

Re: When did you rebalance YTD?

Post by ThisJustIn »

livesoft wrote: Sat May 28, 2022 1:01 pm My records show I rebalanced on
01/03-04
01/19
02/03
03/30-31
04/18-19
04/25-26
05/09
05/17
05/18
05/23-24
05/27
Why so many? What does your IPS say? I'm trying to learn.
Triple digit golfer
Posts: 10430
Joined: Mon May 18, 2009 5:57 pm

Re: When did you rebalance YTD?

Post by Triple digit golfer »

I haven't had the need to rebalance this year.
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