Starting off the new year with a few updates to clean up some loose ends. First off, new rebalancing rules - 20% relative threshold rebalancing now for all portfolios. Then, a look at my two asset changes last year: VPU supplementing VNQ and USMV taking some from PFF.
Common problem: I want to sell Asset A but it’s in a retirement account; I don’t want to sell Asset B, but it is what’s accessible in my brokerage account. How do I handle the conundrum? Answer: An Asset Swap, but be careful of the Wash Sale rule! Two embedded videos here to help you out.
I changed the composition of portfolios recently to reflect new learning about better choices for some asset classes. In the same spirit, after reviewing the Kitces paper recently, I’m adding rebalancing rules to two test portfolios to see what kind of difference they make.
Comprehensive look at the issue of rebalancing by a leading Financial Planning. Covers what rebalancing is, its benefits, different methods (including time-based and threshold-based), and other aspects for consideration. Key finding for RP investors: 20% (relative) threshold rebalancing looks best.
