Personal Finance & Money Stack Exchange
Personal Finance & Money Stack Exchange

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.

79 questions
51
votes
10 answers

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 only recently really been getting into the media.…
Andrew Welch
  • 907
  • 3
  • 8
  • 14
27
votes
1 answer

Will the popularity of index funds cause a pricing bubble in the stocks that make up an index?

I can't help but notice the popularity of index mutual funds over actively managed funds. I think all the arguments are sound, but I have one worry: Index funds are run by buying the stocks listed in a particular index, with the goal being to get…
Scott Whitlock
  • 3,802
  • 1
  • 21
  • 26
26
votes
5 answers

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 such products are suitable only for short-term traders…
glen4096
  • 363
  • 3
  • 5
21
votes
10 answers

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 market always goes up in the long term. Is,…
Stefan Woehrer
  • 311
  • 2
  • 3
16
votes
6 answers

To rebalance or not to rebalance

I have not been able to understand the concept of rebalancing in investing. To me it's a form of the gambler's fallacy. Let: s_n = stock price at time n s_{n+1} = stock price at time n+1 E[x] is expected value of x and E[x|y] = expected value…
morpheus
  • 953
  • 1
  • 9
  • 22
13
votes
1 answer

For higher returns, put money in fewer or more ETFs? w/rebalancing in the equation

I'm evaluating my long-term investing strategy. I am somewhat aggressive and want to stick with ETFs. Scenario A 60% Vanguard S&P 500 Index ETF (VOO) 40% Vanguard FTSE All-World Ex-U.S. ETF (VEU) Scenario B 10% Vanguard S&P 500 Index ETF (VOO) 10%…
Lokesh Dhakar
  • 233
  • 1
  • 6
12
votes
5 answers

Asset allocation software: Application or tool to help me rebalance my investment portfolio?

I'm looking for an application that can help me rebalance my investment portfolio. I'm not looking for something that will suggest percentages for each asset class. I'm looking for something that, given my desired portfolio (% in each class) and…
KeithB
  • 5,005
  • 24
  • 29
11
votes
2 answers

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 time? Specifically among those who only care about…
user19035
9
votes
6 answers

How do I find an ideal single fund to invest all my money in?

Suppose I wanted to follow the advice on this blog post: An ideal bal­anced port­fo­lio would be a sin­gle fund. This forces you to look at your invest­ments as one big bucket, elim­i­nat­ing men­tal account­ing. It ensures you rebal­ance …
ripper234
  • 2,410
  • 2
  • 20
  • 37
9
votes
2 answers

Tax implications of 401k regular rebalancing vs a retirement target fund

This question is in the context of securities held within a 401k. As I understand it, one of the advantages of a retirement target date fund (like Fidelity's FFFHX, which I am in 100%) is that the fund automatically adjusts its holdings to become…
Jeremy
  • 1,033
  • 1
  • 12
  • 23
8
votes
2 answers

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 then you rebalance to keep that same allocation.
Jack
  • 1,456
  • 1
  • 13
  • 20
8
votes
2 answers

Explain the details and benefits of rebalancing a retirement portfolio?

What exactly does rebalancing entail? Does it mean that if I originally had 50% in stocks and 50% in bonds and my stocks do amazingly well that I end up with 75% in stocks and 25% in bonds that I need to move money around to put it back at…
Bryan Denny
  • 1,357
  • 1
  • 9
  • 21
7
votes
1 answer

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 funds, each fund targetting a very specific…
blueberryfields
  • 1,659
  • 2
  • 14
  • 27
6
votes
4 answers

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 this one. From the accepted answer to that…
EJoshuaS - Stand with Ukraine
  • 3,056
  • 1
  • 12
  • 32
6
votes
1 answer

re balancing portfolio by only buying more or by both selling and buying under and over allocated assets?

For doing a re-balance of a portfolio, is it a better idea to just buy more of the under allocated assets or sell some over allocated assets to buy the under allocated assets. For my background, 28 yrs old, 15+ years of investment horizon, ~$200k…
EndlessSpace
  • 1,663
  • 2
  • 15
  • 27
1
2 3 4 5 6