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.

Filter by
Sorted by
Tagged with
1 vote
2 answers
178 views

index rebalancing question

When the S&P 500 adds or removes companies, my intuition is that the companies added have a higher market cap than the companies removed. To what extent does this difference drive the growth of ...
Mike's user avatar
  • 13
4 votes
2 answers
173 views

ETF rebalancing: do I pay fees?

Consider an ETF on a broad index such as S&P500. I know that the ETF is rebalanced usually quarterly by providers such as BlackRock or MSCI. My question is: if I am long that ETF, do I incur in ...
user9875321__'s user avatar
3 votes
0 answers
73 views

Stock re-balancing in equal weighted portfolio

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 ...
Ron's user avatar
  • 31
1 vote
1 answer
80 views

How can I calculate an efficient way to rebalance?

Having a math related issue, and I feel like the solution is obvious but I just can't get it for some reason. Let's say you have four sector ETFs (or stocks, whatever really). You want to maintain ...
trallgorm's user avatar
  • 111
0 votes
1 answer
82 views

Is using debt into a regular mutual fund different from investing in a leveraged mutual fund?

I was thinking if I should invest in some mutual funds using low-interest rate debt. But then I read this Q&A: Why are daily rebalanced inverse/leveraged ETFs bad for long term investing? If I ...
user2652379's user avatar
4 votes
1 answer
247 views

What is the formula for rebalancing a portfolio?

I have a portfolio of two assets. I've invested X% in asset A and Y% in asset B. Here, X and Y are weights. So, for example X = 50, Y = 50 would be a long equal-weighted portfolio, whereas X = 50, Y = ...
fewegw's user avatar
  • 101
0 votes
3 answers
94 views

Are large and frequent moves via rebalancing within a 401k, without cost or penalty?

Example scenario: 300k vested in companies 401k Company provides 10 funds, from low to high risk Each fund has extensive details, that can be used to relate to current market volatility. Company ...
Greg McNulty's user avatar
21 votes
10 answers
5k views

Can you really always yield profit if you diversify and wait long enough?

It is a common assumption (and, as far as historical stock market data goes, also proven) that the stock market is always growing if you enlarge the time window long enough . In other words: The stock ...
Stefan Woehrer's user avatar
0 votes
2 answers
59 views

Rebalancing for dollar's buying power at the time of the original deposit

I want to create a portfolio that would be rebalanced according to the relative buying power of dollar at the time of the deposit, but I'm not sure how to do it. I'm not familiar with financial ...
jimmy's user avatar
  • 101
0 votes
2 answers
125 views

Selling Stocks and Re-balancing my account: how will this effect my taxes?

This is my first year diving into stocks. Individually, I own around 10 different stocks, and one or two of them seem to be doing much better than others. I believe I would like to sell some of the ...
Rob's user avatar
  • 281
0 votes
2 answers
72 views

Selecting lots when rebalancing

I'm about to rebalance my portfolio of ETFs. For the selling part, I have several lots to choose from, and I'm not sure if it matters much which one I pick. All lots have long term capital gains. ...
minou's user avatar
  • 7,526
1 vote
2 answers
88 views

Do I have to reallocate all my funds every time I optimize my portfolio or is it only for new funds?

I've developed a code to optimize the new money coming into my etoro portfolio. However, I do not reallocate the funds that are already there. Should I? Context: I'm young and starting to earn a ...
Revolucion for Monica's user avatar
3 votes
2 answers
218 views

What are the steps to create a balanced portfolio from scratch?

I'm about to invest in stocks and plan to invest a small amount (say 500) per month at a maximum total amount of 50,000. Say my target percentages are as follows (they will change in a monthly basis). ...
Helix Quar's user avatar
1 vote
1 answer
113 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 ...
Skrrrrrtttt's user avatar
1 vote
2 answers
466 views

Are physical ETFs allowed to trade more often than 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 ...
Martin Thoma's user avatar
4 votes
2 answers
107 views

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 ...
Daniel R. Collins's user avatar
0 votes
2 answers
944 views

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

I invested $44,449 in an S&P 500 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 ...
user65421's user avatar
0 votes
3 answers
134 views

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 ...
minou's user avatar
  • 7,526
1 vote
1 answer
129 views

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 ...
Pertinax's user avatar
  • 1,530
0 votes
2 answers
133 views

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 ...
user462455's user avatar
2 votes
3 answers
115 views

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 ...
Xiong Chiamiov's user avatar
51 votes
10 answers
17k views

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 ...
Andrew Welch's user avatar
3 votes
1 answer
96 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? ...
Josh's user avatar
  • 141
5 votes
3 answers
126 views

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 ...
mariachi's user avatar
  • 151
2 votes
1 answer
134 views

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)...
HerrSubset's user avatar
2 votes
4 answers
316 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. ...
Stephen's user avatar
  • 871
6 votes
4 answers
2k views

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 ...
EJoshuaS - Stand with Ukraine's user avatar
0 votes
1 answer
246 views

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 ...
Peter K.'s user avatar
  • 3,943
2 votes
2 answers
337 views

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 ...
Martin Ueding's user avatar
3 votes
3 answers
719 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 ...
Jeff Levine's user avatar
5 votes
1 answer
586 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 ...
marty24's user avatar
  • 105
5 votes
2 answers
156 views

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 (...
Ramon's user avatar
  • 151
2 votes
3 answers
1k 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 ...
user2023861's user avatar
1 vote
2 answers
185 views

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.
Sparkler's user avatar
  • 518
2 votes
2 answers
112 views

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 ...
Naz's user avatar
  • 163
25 votes
5 answers
7k views

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 ...
glen4096's user avatar
  • 353
3 votes
1 answer
556 views

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 ...
user avatar
2 votes
1 answer
130 views

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 ...
minou's user avatar
  • 7,526
5 votes
1 answer
283 views

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 ...
DukeLuke's user avatar
  • 745
1 vote
2 answers
257 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 ...
Jose Luis's user avatar
  • 221
4 votes
1 answer
963 views

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 ...
ZASC's user avatar
  • 125
1 vote
1 answer
250 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&...
LivingInformation's user avatar
2 votes
1 answer
878 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&...
Nick's user avatar
  • 121
2 votes
2 answers
156 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 ...
Lawrence Wagerfield's user avatar
1 vote
1 answer
358 views

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 ...
Kartick Vaddadi's user avatar
0 votes
2 answers
748 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 ...
Kartick Vaddadi's user avatar
2 votes
3 answers
285 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 ...
Kartick Vaddadi's user avatar
5 votes
1 answer
1k 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: ...
slaw's user avatar
  • 151
4 votes
2 answers
122 views

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 ...
capybaralet's user avatar
-1 votes
1 answer
123 views

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 ...
Stephen Ostermiller's user avatar