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I currently have 20 stocks* in my portfolio (market value $300,000) which are equal weighted (5%). I am a long term investor and retired. *As part of the stock portfolio, I actually have 19 stocks and 5% designated as cash.

If all stocks remain relative, i.e no reason to remove it from the portfolio, how frequent should I re-balance: quarterly, semi-annually or once a year? Plus, when should I re-balance? When a stock increases to 7% sell back to 5%) or only when a stock hits 10% (sell back to 5%)? If a stock falls below 5% I would buy more to remain at 5%.

I can always set triggers on my stocks when they hit any % increases/decreases. If all stocks increase/decrease buy/I would sell to maintain 5% and all increases/decreases go to cash. The cash position always increases as I make monthly contributions.

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  • The usual recommendation is to rebalance once a year. You can pick any time of the year, but then stay with it in the following years. (personally, I would not pick last day of the year or other such edge cases, because many people and institutions may use that date and that could impact you negatively - or positively but who knows). - I have no sources to cite, so just a comment.
    – Aganju
    Feb 7, 2022 at 1:05
  • To properly answer your question, we need to have a better understanding of your goals. Are you trying to match the performance of the market? Are you trying to out perform the market? I am also wondering about taxes. Is this done in a tax sheltered account such as an IRA or Roth IRA?
    – Bob
    Feb 8, 2022 at 3:18
  • I'm retired and need growth and income. Taxes are not an issue. This is in my TFSA and RRIF; Canadian registered accounts.
    – Ron
    Feb 9, 2022 at 21:22

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