How To Rebalance Your Portfolio
Channel: Paul Merriman
Date: 19/10/2022

Paul Merriman, Chris Pedersen and Daryl Bahls each share his studies and comments about rebalancing a portfolio—how often, how much change before rebalancing, and when does it make sense not to rebalance? They also answer listener/viewer questions and Paul makes a special offer for a free chapter from Larry Swedroe’s book, Your Complete Guide to a Successful & Secure Retirement. (See details in ‘Links’ below).

Q&A

Which asset classes should be in taxable accounts and which in tax-advantaged accounts? 
To answer this oft-asked question, Paul recommends Larry Swedroe’s book, Your Complete Guide to a Successful & Secure Retirement and encourages investors to read Chapter 10 from the book, “The Asset Location Decision." See “More Links” below for details to buy the book and access the free chapter.

“Is there a rebalancing bonus?”
Chris answers this question and illustrates his answer with the chart, “Is There a Rebalancing Bonus? … Not Much.”  See this chart and others mentioned below. https://paulmerriman.com/wp-content/uploads/2022/10/20221005-Podcast-Charts.pdf

“I want to help my 36-year-old daughter establish a retirement portfolio. What do you think of using Vanguard Life Strategy Moderate Growth Fund (VSMGX)?” 
Chris answers by suggesting a better answer may be a Target Date Fund and shows the Vanguard Target Date Fund Glidepath. See this and other charts and tables mentioned here- https://paulmerriman.com/wp-content/uploads/2022/10/20221005-Podcast-Charts.pdf


“Can I expect to invest in the funds you recommend today and hold them for the rest of my life?”  Daryl’s answer is yes, using our 4-Fund portfolio. He shows why by comparing the Total Market Index funds to our “No-Nonsense Portfolios” in Table 1a: “No-Nonsense Portfolios for Sound Investing: Equity Asset Allocation” and Table 2a.1, which shows “Comparison Data,” drawing special attention to our U.S. Only 4-Fund Portfolio over the Total Market Index and S&P 500.

Daryl also offers a third Table, “No-Nonsense Portfolio Performance Rankings by Decade (1970-2021). See these and all charts and tables mentioned here- https://paulmerriman.com/wp-content/uploads/2022/10/20221005-Podcast-Charts.pdf

"I feel stuck,” writes Karen. I have found lots of great advice but have been unable to do anything for 2-1/2 years. What do suggest?”
All three weigh in on what they recommend Karen do to overcome her fear of investing.

“I hold a Vanguard small-cap international fund. Should I expect better rates of return from the Avantis International Small-Cap Value Fund (AVDV)?”
Chris offers his thoughts based on historical data.

MORE LINKS.

Rebalancing: The implications of adding a small amount of small-cap value to a Total Market Index portfolio. See this Table. https://paulmerriman.com/wp-content/uploads/2021/09/SCV-vs-SP500-Fine-Tuning-Table-2020.pdf

You can get your copy of Larry Swedroe’s book, Your Complete Guide to a Successful & Secure Retirement at: https://amzn.to/3gb3noz. If you purchase via our link, it may result in our Foundation receiving a small commission that supports our financial education outreach at no additional cost to you.

Read this FREE chapter from Larry’s book, “The Asset Location Decision,”  courtesy of Mr. Swedroe and publisher Harriman House. https://paulmerriman.com/wp-content/uploads/2022/10/Your-Complete-Guide-to-a-Successful-and-Secure-Retirement-2021-Chapter-10.pdf

Disclaimer-
This information is intended to be used and must be used for information purposes only.

We are not investment or tax advisors, and this should not be considered advice. It is very important to do your own analysis before making any investment or employing any tax strategy. You should consider your own personal circumstances and speak with professional advisors before making any investment.

The information we present is based on our own research and opinions. We believe the information presented herein to be true and accurate at the time of publication but do not guarantee the accuracy of every statement, nor guarantee that the information will not change in the future.

It is important that you independently research any information that you wish to rely upon, whether for the purpose of making an investment or tax decision, or otherwise. No content on the website (paulmerriman.com) or related sites, nor any content in our newsletters, email, or related content, constitutes, nor should be understood as constituting, a recommendation to engage in any of the investment strategies we present. 

Sign up for our bi-weekly newsletter and get our free pdf books- https://paulmerriman.com/signup

We’re Talking Millions — 12 Simple Ways To Supercharge Your Retirement
2-Funds for Life: a quest for simple and effective investing strategies