Is Portfolio Rebalancing Worth It?

De: Dale C. Maley

Narrado por: Virtual Voice

The last few years I have been exploring all aspects of retirement planning. Portfolio rebalancing is one area that I have never really explored in any detail. If an investor desires a portfolio with 50% stocks and 50% bonds, over long time periods it is likely this original asset allocation will drift to a higher percentage of stocks and a lower percentage of bounds. Current popular financial planning guidelines suggest the investor should adjust or rebalance the portfolio back to the original asset allocation on some calendar basis (typically annually). Rebalancing requires effort to determine the optimum methodology for rebalancing. It also involves trading costs and potential tax costs. My goal is to explore the history of rebalancing and then determine if rebalancing is really worth it for the average investor.