facebookHow do you go about selling your units for the purpose of "rebalancing portfolio"? Are there any rules to take note of? - Seedly

Anonymous

26 Jul 2020

βˆ™

General Investing

How do you go about selling your units for the purpose of "rebalancing portfolio"? Are there any rules to take note of?

Discussion (1)

What are your thoughts?

Learn how to style your text

Instead of selling you could also add new trades to the underweighted securities.

otherwise, yes, you just would calculate your own standard allocation % and sell the overweighted pro rata to reinstall your initial standard balance.

for myself I never intently rebalanced, at least never by actively selling and buying the others.

Why not let the winner ETFs run?

Sure, logic says to rebalance to an initial personal standard allocation in percentages with the goal of risk reduction.

But can we be sure to have really calculable risk numbers for our own portfolios ? Empiric data are historic data. Are they valid for the future?

Isn't it also a risk to miss out on very successful stocks (f.ex. with a decent technology ETF)? I also (at least when looked at in aggregate, f.ex. by passive ETF indexing) that past performance of broader allocations correlates at least to some degree with future performance.

Mostly higher potential performance translates into higher risks.​​​

Write your thoughts