Is anybody rebalancing yet?

[disneysteve]

Year to date, our stock allocation has dropped by 8. It was probably a bit more but I've done some buying the past couple of weeks, but not enough to really move the needle.

Is everyone holding steady or are you planning to rebalance? More than likely, your allocation has gotten just as out of whack if not more than ours. Are you hoping the eventual recovery fixes it for you? Are you just continuing to put in new money as always, like 401k and Roth contributions, and hope that brings it back in line? Or are you looking at actively fixing it by shifting things around?

[Like2Plan]

We should re-balance (we are 50-50 stocks -bonds, we should be 55-45 stocks-bonds), but I am waiting until the dust settles. I don't think we've found the bottom, yet.

DH is so close to retirement (2 months)-- our new contributions don't have much of an impact on our overall asset allocation. But, all of our new contributions are going into equities.

[Petunia 100]

Yes, I have sold some bonds and bought more stocks. Twice now.

[Scallywag]

Just doing the usual -- buying more stock mutual funds & some individual stocks. I have learned the hard way to never try to time the market.

[disneysteve]

Just doing the usual -- buying more stock mutual funds & some individual stocks. I have learned the hard way to never try to time the market.

Rebalancing is not the same as market timing.

[kork13]

I'm currently ~3.5% off of my AA targets (at least in retirement, where all of my bonds live -- taxable is 100% stocks). If/when it gets to around 5%, I'll rebalance to reset the mix. The funny this is that I rebalanced very recently (2 Mar 20), because I had forgotten to do so at the new year (and I was ~7% off at that point).

[Scallywag]

Rebalancing is not the same as market timing.

Got it.

I've bought some risky stocks though - my past portfolio had vanilla blue chips, but I've bought some "contra" shares - in the travel and cruise industry, increasing the aggressive growth portion. Only in small amounts, though (like 5 to 21 shares). I will be buying on a weekly basis from now on, not on a monthly basis.

[rennigade]

So...this is a noob question...how do things get out of whack when the market tanks? Lets say youre 90-10...so if that 90% of stocks tank and your 10% of bonds pretty much remain the same, your new balances could equate to 80 stocks 20 bonds? Is that accurate?

^if thats true...are you guys selling bonds and buying more stock...if your goal is to get back to a 90-10?

[disneysteve]

So...this is a noob question...how do things get out of whack when the market tanks? Lets say youre 90-10...so if that 90% of stocks tank and your 10% of bonds pretty much remain the same, your new balances could equate to 80 stocks 20 bonds? Is that accurate?

Exactly. If the value of part of your portfolio drops, it becomes a smaller percentage of the total, and the portion that didn't drop becomes a larger percentage.

[disneysteve]

Let's say you have $100,000.
$90,000 in stocks - 90%
$10,000 in bonds - 10%

Stocks drop 20% so you then have:
$72,000 in stocks - 88%
$10,000 in bonds - 12%

[rennigade]

Exactly. If the value of part of your portfolio drops, it becomes a smaller percentage of the total, and the portion that didn't drop becomes a larger percentage.

Thanks. I should probably take a look at our AA...never really thought about tweaking it.

[LivingAlmostLarge]

not yet.