How can we rebalance our own portfolios? I know it is common for robo-advisors to rebalance on their own, but as individual investors, what are the steps to take to rebalance?
New to investing, hoping to learn from the community here! Thank you!
Eg. initially u put $1k equity/ $1k bond. 2nd yr: ur portfolio profit/loss; $800E / $1100B U need to sell $150B and put into E make it $950E/$950B
Within the Equity/bond u got number of individual stocks/bonds. Base on ur initial % weightage, redistribute the $950 within the equity/bond
50-50 is just a guideline, need not strictly follow. is ok to be 53-47. But when rebalance you need to consider is it worth it? All this buying / selling will incur transaction fee
Eg. initially u put $1k equity/ $1k bond.
2nd yr: ur portfolio profit/loss; $800E / $1100B
U need to sell $150B and put into E make it $950E/$950B
Within the Equity/bond u got number of individual stocks/bonds. Base on ur initial % weightage, redistribute the $950 within the equity/bond
50-50 is just a guideline, need not strictly follow. is ok to be 53-47. But when rebalance you need to consider is it worth it? All this buying / selling will incur transaction fee