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re: Do you rebalance your retirement portfolio?
Posted on 1/3/13 at 6:01 pm to Y.A. Tittle
Posted on 1/3/13 at 6:01 pm to Y.A. Tittle
quote:I'm sure you know this.
If so, can you explain a real, and not just theoretical benefit to doing so?
Sectors rarely remain as top-performers or bottom-dwellers year-to-year. Consider 2008 vs 2009 below. Holding equal allocations of EMB/Treas/HighYld/MBS through 2008 would result in Treas/MBS overweight and HighYld/EMB underweight. The following year the sectors flipped. A nonrebalanced portfolio would underperform one adjusted to re-equalize positions.
From 2009-2010 not so much. More often than not though, rebalancing will take advantage of various sectors tendency to fluctuate.
This post was edited on 1/3/13 at 6:03 pm
1
Posted on 1/3/13 at 9:42 pm to NC_Tigah
quote:
From 2009-2010 not so much. More often than not though, rebalancing will take advantage of various sectors tendency to fluctuate.
But, if I keep my purchase allocation the same, wouldn't their tendency to fluctuate work itself (balance itself?) out in the end, or at least have an equally beneficial result than if I rebalanced my entire holdings on some sort of regular basis?
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