1Année·

Dear GQ community,

Thoughts on the subject of PF rebalancing:

I am running my two ETFs ($SPPW (-0,26 %) / $XMME (-0,41 %)) with the classic 70/30 weighting. Small caps should be added soon. Of course, rebalancing is not rocket science here.

If you look into the subject of rebalancing, you will come across all sorts of different ideas. There are even online calculators etc.

I don't think rebalancing by selling and reallocating is a good solution. When you sell securities or assets that have performed better, you also trigger a tax payment (in🇦🇹 unfortunately there are no tax-free allowances). This money is then gone, which is a shame.

That's why I'm in favor of rebalancing exclusively via purchases and savings plan adjustments.

How do you see this, do you think about it, is it relevant here?

10 Commentaires

Malte@Malte123

1Année

Would also only solve the rebalancing via individual purchases/savings plans. Theoretically, however, this is already active investing again, as if you buy into the weakness you would assume that it will improve again in the foreseeable future.

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Ironman@Ironman2022

1Année

@Malte123 If the original investment case remains the same, you should balance everything out from time to time.
I think purely passive investing is a fairy tale anyway 😅

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Malte@Malte123

1Année

@Ironman2022 Yes, I agree with you.

Theoretically, there is also the momentum approach, i.e. continuing to invest where things are going well/have gone well.

Not so good in terms of diversification, of course.

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Ironman@Ironman2022

1Année

@Malte123 I take an anticyclical approach. I hold a cash reserve and add in tranches in the event of a correction or crash.

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Malte@Malte123

1Année

@Ironman2022 Yes, I agree. I started shifting more into real estate / healthcare / utilities / consumer staples in the middle/end of last year. Let's see if it works, a lot depends on the interest rate situation.

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Gerit@Gerit

1Année

If this is important to you, it is better to adjust the balance with additional purchases, which also has something of an "anti-cyclical" effect.

If it can't be balanced because the sum is already so high, then that's just the way it is, the long-term prospects don't change and ultimately it's the invested capital that matters in the distribution and not what comes out at the end, as long as it's a lot more 😃

But maybe it's also dangerous half-knowledge, I haven't dealt with ETFs for years.

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Ironman@Ironman2022

1Année

@Gerit I think this approach does not only apply to ETFs. "Anti-cyclical" is the magic word. You're quite right, I don't find anything dangerous about it 😅

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Gerit@Gerit

1Année

@Ironman2022

Otherwise, I can recommend the concept of the All Weather Portfolio by Ray Dalio, i.e. to take a look at it, as it deals precisely with this topic of how best to rebalance in order to survive in any market situation.

I think the maximum drawdown was only -4% in 2008 😅

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1Année

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Ironman@Ironman2022

1Année

@PowerWordChill Sure, that's how I proceed. 70/30 is just a guideline.

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