14H
Never say “final” on the stock market. Why would you think you’re the perfect investor right now and stop learning?
“A portfolio for the next few years” and “let it run and check it once a year” are technically contradictory, since the weightings of the positions shift automatically.
What’s your approach to rebalancing?
“A portfolio for the next few years” and “let it run and check it once a year” are technically contradictory, since the weightings of the positions shift automatically.
What’s your approach to rebalancing?
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22
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@Epi You’re right—"final" was the wrong word. What I meant was that the basic structure is in place, and I’m no longer tweaking the building blocks every week. Of course, I’ll still keep learning and making adjustments.
As for rebalancing: I do it primarily through my savings rates. With €2,000 a month, I can absorb shifts pretty well by allocating more to underweighted positions for a while. That costs nothing and doesn’t trigger any taxes.
Once a year, I take a closer look at the weightings. If a component deviates by more than about 5 percentage points from its target and this can no longer be meaningfully balanced through savings rates, I also rebalance by selling. In doing so, I make use of the saver’s allowance whenever possible. With gold, this is even tax-free after holding it for one year, which makes it particularly easy in that case.
So for me, “letting it run” doesn’t mean ignoring it, but rather not making changes based on gut feelings or headlines—instead, following set rules.
As for rebalancing: I do it primarily through my savings rates. With €2,000 a month, I can absorb shifts pretty well by allocating more to underweighted positions for a while. That costs nothing and doesn’t trigger any taxes.
Once a year, I take a closer look at the weightings. If a component deviates by more than about 5 percentage points from its target and this can no longer be meaningfully balanced through savings rates, I also rebalance by selling. In doing so, I make use of the saver’s allowance whenever possible. With gold, this is even tax-free after holding it for one year, which makes it particularly easy in that case.
So for me, “letting it run” doesn’t mean ignoring it, but rather not making changes based on gut feelings or headlines—instead, following set rules.
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22
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