Re-balancing: make it regular and timely

Its July, and as folks know, I tend to re-balance on a time schedule (ex. Every six months) versus on a percentage “out of balance” where you check your investments and when they are a certain % out of whack, then you re-balance.

African elephant female and her baby elephant balancing on a blue balls.

If you remember, I wrote about re-balancing back in January, and there, I ended up selling off my bonds (and some REITs) who had been more successful (or less sucky) than stocks. The result was that I sold high, and bought stocks at basement prices. Since then, stocks have shot up dramatically, and the result has been some accounts out of balance again.

By rebalancing now, I can sell off some stock winners when high, and buy some bond/REIT losers.

My standard allocation is:

  • 30% Index Bond funds
  • 17.5% S&P 500 Index
  • 17.5% Small cap Index
  • 17.5% International stocks index
  • 17.5% REITs index

When I reviewed my numbers, I found that my S&P500, International and Small Cap stocks have shot up, and the bonds/REITs have not done as well. So I’ll be selling off about $11K in stocks and re-investing in bonds, mostly in my TRowePrice accounts. Plan is to do that work this week, so its done by early July.

Remember to consider rebalancing, so you can “buy low and sell high” yourselves.

Have a great 2019!

Past Posts on Re-balancing

Other links on rebalancing

Mr. 30 Months

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