Questions tagged [rebalancing]

Rebalancing is the process of realigning the weightings of a portfolio of assets by periodically buying or selling assets in a portfolio to maintain the desired level of asset allocation.

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54 views

Single period immunization, rebalancing

While reading about Bond portfolio management I came across maturity matching and single period immunization. Which If I understand correctly is if the holding period of a bond is its maturity then ...
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Are physical ETFs allowed to trade more often then what they report?

Looking at any ETF, they often show a rebalance interval in a fact sheet. For example, DE0006289390 shows "quarterly" there. May the managers/administrators (or however you call the people) of the ...
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What is the result of rebalancing if one class zeroes out?

Let's say we have a set of investments, a target allocation to those investments, and commit to rebalancing at some particular frequency. In the worst-case scenario, if one of the classes ...
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338 views

What is the minimum time an S&P 500 index fund should be given before selling?

I invested $44,449 in an S&P500 index fund over a period of 15 months. Its current market value is $43,596. As someone who has adopted the buy and hold strategy, how long should I wait before ...
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Tax loss harvesting with ETFs

With the big market drops, I'm thinking of doing some tax loss harvesting. I've never done this before, so want to make sure I do it right... I'm on Fidelity if it matters. I have a self managed ...
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Where can one download monthly index fund prices from the deep past (40+ years) until today? [closed]

In the Four Pillars of Investing (2002), p. 119, William Bernstein suggests that a portfolio divided 50/50 into the SP500 and EAFE indexes (respectively US domestic and foreign stocks) and rebalanced ...
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Stocks vs Bonds

There is a lot of knowledge (mostly outdated?) that we (individual investors) should rebalance portion of money they allocate in stocks vs bonds. In the past decade, investing in bonds would have ...
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Given a tax-advantaged account with commission-free funds, is there any disadvantage to frequent rebalancing?

In my retirement accounts, I have lazy portfolios consisting of a few index fund ETFs that my broker offers commission-free trades on. I would like to rebalance these funds not only to keep my ...
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One of my stock positions has grown substantially. Should I rebalance my portfolio?

I'm a small beginner investor with less than 50k portfolio. One stock I hold has grown substantially than everything else and makes up 46% of my portfolio, but it is expected to keep growing and has ...
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86 views

Is it time to rearrange portfolio and put more money in bonds? [closed]

57% of my portfolio is invested in stocks. I am considering rebalancing the portfolio and adding more debt funds to it. How to track the market and decide if its time to sell the stocks or buy more? ...
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Rebalance or just change allocation of next purchase?

My portfolio only has 3 ETF funds (emerging markets, S&P and STOXX 600). I do not pay any commissions on purchases over 500€ and I usually buy 2000€/month. Since I don't have any costs to buy ...
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Auto balancing portfolio through new purchases

I'd like to have an investment portfolio with a few items, each having a target proportion (e.g. I want to have stocks of Apple and the total value of those should be 25% of my portfolio's total worth)...
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232 views

Why is tax loss harvesting helpful for passive investing?

I am considering opening an account with a robo-advisor (e.g. Wealthfront), and in my research I have seen that robo-advisors often advertise tax loss harvesting as a feature of their accounts. ...
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How to rebalance a portfolio without moving money into losing investments

I've read a number of conflicting opinions on whether portfolio rebalancing is a good idea. The question of whether rebalancing is a good idea has been addressed in some questions here, too, such as ...
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How to deal with activist targeting of individual stocks?

My portfolio contains stocks in specific American companies which I bought when I figured their stock was underpriced. Now there are public attacks against some of these individual companies that ...
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How aggressive should my personal portfolio be?

I am 27 and have a retirement portfolio with three funds that are all rather long-term investments: MSCI World (ETF) Magna New Frontiers Ökoworld Ökovision Classic C This portfolio is managed by an ...
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518 views

Does dollar cost averaging apply when moving investments between fund families?

We'll likely be moving ~$100,000 (two Roth IRAs, about 80k/20k split) from a mix of Nationwide funds to a combination of Vanguard whole-market stock and bond index funds (details below). All else ...
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456 views

Why do passive ETFs require so much trading (and incur costs)?

As far as I've understood, the idea of passive ETFs is to track an index. Typically, the index is a value-weighted stock market index, such as the S&P500. Now, if I'm not mistaken, tracking a ...
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Problems with this strategy to “increase” IRA contribution maximum?

Strategy is outlined here: Using Leveraged ETFs To Game The Roth IRA Maximum Essentially, you keep 1/3 of your portfolio in a 3x leveraged ETF and 2/3 in cash. The author claims this combination (...
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888 views

When the market crashes, should I sell bonds and buy equities for the inevitable recovery? [closed]

I'm told that for my age, I should have about 1/3 of my portfolio in bonds and 2/3 in equities. Suppose I implement that with this portfolio: 100k of SPY 100k of IWM 100k of TLT Now suppose that ...
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How to rebalance a passive portfolio if I speculate a war is coming? [closed]

Is there a theory about what typically happens to some markets when a country goes to war? If yes, should a passive portfolio be rebalanced accordingly? For example industrial metals.
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Return calculation on a security that you are rebalancing

Suppose you have some security A, and the suppose the following: Initial amount of security bought: 100 Initial price: $10 Suppose after some time: Sold qty: 10 Sold at: 11 Then you buy some ...
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Why are daily rebalanced inverse/leveraged ETFs bad for long term investing?

I was reading this article about S&P 500 short ETFs: https://www.zacks.com/stock/news/176217/4-ways-to-short-the-sampp-500-with-etfs and I was confused when it said: "investors should note that ...
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Why weight a portfolio by market cap when equal weighting has higher ROI?

I've been researching how to structure my different funds, and almost everywhere I look I see people buying funds based on market cap. e.g. investing 70% in a large-cap ETF like Vanguard's $VV, 20% in ...
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Consider dividends in timing of rebalancing ETFs?

Most of my investments are in ETFs that I rebalance occasionally or purchase additional shares when I have cash. Currently, when I do a rebalance or an additional purchase, I don't look at the ...
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How often should one's retirement portfolio be adjusted (rebalanced), and how?

I'm opening my Roth IRA Account. My question is: How often should I adjust my portfolio? I know this depends on a variety of factors: I'm 23, plan to retire when I'm in my 60s (or at least withdraw ...
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228 views

Is a robo-adviser worth the risk?

I've seen a lot of talk lately about robo-advisers that manage stock portfolios for minimal expenses. The expenses are usually paid by ETF's. I am not very well versed in all this stock and ...
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Rebalancing a portfolio

Quick question on rebalancing a portfolio. Let's say that 10% of my portfolio is in something really speculative such as bitcoin (speculative for me at least)...now I've said to myself that I'm only ...
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176 views

What happens to an index if one of its components fails?

This may seem like a contrived question, but from my perspective as a programmer, edge cases are everything. Ignoring the sheer improbabilities involved, what would happen to an index (say, the S&...
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443 views

How do leveraged ETFs (index tracking) set intraday pricing?

I'm curious specifically about the pricing mechanism of leveraged ETFs, and specifically 3x - let's take SPXL as an example (3x S&P500 bull etf). I know that this fund is designed to track the S&...
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125 views

Why compare asset performance using returns, instead of using change factors?

Why do investors compare the returns of assets as opposed to the change factors of assets? E.g. comparing 6% / 4% instead of 106% / 104% to get the comparative performance of two assets. AFAIK ...
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Can I sell section 54EC infra bonds before maturity?

This question pertains to section 54EC infrastructure bonds that are offered in India — the ones with tax-free dividends (though the principal is taxed). I have invested some money in NHAI and IRFC ...
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465 views

How do I calculate what percentage of my portfolio is large-, mid- or small- cap?

I live in India, I've invested in some equity mutual funds (that invest in the domestic market). Each of them has some money in mid-cap stocks and some in large-cap. In fact, one of my funds was ...
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232 views

Is it a good idea to rebalance without withdrawing money?

Rebalancing is generally done by withdrawing money from investments that have a greater percentage of your money than you want, and putting it in investments where you're underweight. An alternative ...
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743 views

Calculating Simple Portfolio Returns with Rebalancing or Adding/Removing Securities

Given a set of portfolio weights, w, and historical security prices, I am looking to calculate a simple portfolio return via: where R is the simple return for a given security from time t to t+1: ...
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Personal Investment Account for US citizen residing in Canada

I'm a US citizen residing in Canada. Can anyone recommend a service I can use to manage a personal investment account (USD) under these circumstances? I only need to deposit money once, and maybe ...
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How can I simplify my interactions with my online brokerage for buy, selling, and rebalancing mutual funds?

Whenever I want to buy or sell mutual funds, it ends up being a multiple day process for me. For example buying mutual funds: Visit my brokerage account and have them transfer the funds in from my ...
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With all the different asset allocations out there, why is rebalancing important?

I understand the notion that I need to determine an asset allocation based on my risk preference and then rebalance annually or biannually to keep my asset allocation in line. However, consider that ...
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Is my mutual fund strategy to rebalance to fixed portions of cash, equity, & bonds a good one?

Is this a good mutual fund strategy: Once a year I adjust the asset allocation of all my mutual funds, equity and bond. I maintain a fixed percent of cash, equity, and bonds. If any fund gets ...
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Does Technical Analysis work or is it just a pointless attempt to “time the market”?

I just ran into the concept of Technical Analysis and decided to go ahead and read a book about it. Before I start reading, I'm curious. Do most people use it successfully? Or is it just a waste of ...
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A calculator that takes into account portfolio rebalancing? [closed]

I'm looking for a calculator that takes into account rebalancing when estimating total returns using historical data. For example, I'd input the following into the calculator: I have an initial $10,...
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380 views

Can I use Quicken asset class information to rebalance my portfolio?

Common wisdom is that a good low-effort investment strategy is to choose an asset allocation, then rebalance your portfolio to stick to it. I've been using Quicken Deluxe for this. Obviously it's ...
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What do mutual funds gain by being different from ETFs

This is what I understand on how ETS work vis-a-vis mutual funds: If I buy an ETF (SPY), then the ETF trust fund does not take my money and go out and buy the underlying stocks. I buy one share of SPY ...
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492 views

Why an ETF mirrors the underlying index on a day to day basis but not on a long term basis

Some ETFS like NUGT,DUST say that they replicate the performance of the underlying index on a daily basis. My first question is, do all ETFS do this, or only some? Also, why does it say that "not ...
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Asset Allocation and Timing with a Cash Windfall in Q1 2015

Alright so I'm 30 years old. I'm sitting on cash to invest for the long haul. It's decision time. Here is what I have learned from my research over the last few months: Proper asset allocation ...
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Why does financial investor bother to buy derivatives and then hedge the position?

I am recently studying mathematical finance, and I am not really familiar with how the financial system works. This might be a naive question: when reading some books on mathematical finance, "hedging"...
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How (or is it necessary) to rebalance a 401k with only one index fund?

I put 100% of my 401k into an S&P index fund. Do I need to rebalance that, or is rebalancing only necessary when you have multiple asset allocations such as 80% in stock, and 20% in bonds and ...
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How should I allocate short-term assets in a rising-interest rate environment?

I'm looking to rebalance my portfolio and move some of my stock investments into lower-risk investments, largely because I want to use some of it in the not-too-distant future (say 2-3 years). How ...
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On average, is it a good idea to check off the “automatic rebalancing” checkbox on a managed retirement plan?

In my area, my employer offers a managed retirement savings plan with generous matching contributions. The plan offers very limited control over investment choices (a narrow range of abstract mutual ...
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Should I care about the expense ratio of the money market fund that holds excess cash in my brokerage account?

In my vanguard roth IRAs brokerage account, uninvested/excess cash is kept in a money market fund, VMMXX. I dont care about earning return on this money; I just keep it in cash to help with ...