Inspired by a debate on another thread, I decided to sacrifice my afternoon and run the numbers from Peak2Trough's site to see if there is such a thing as a rebalance bonus in the PP with 35/15 rebalance bands.  Starting on January 1 of each year since 1972, I calculated the CAGRs for PPs (with divi...

...when gold hits 35% and you sell down to 25%...you are selling 40% of your gold. If this happens back to back ...then the 100 ounces you have is down to less than 40oz. I don't post much, but I'd like to run the numbers.  If gold is 35% of the PP, then the other three asset classes are 65%.  Let'...

Here's the plot of real CAGRs.  Gratifyingly, it displays no downward trend, and reveals that the PP has provided a real return of between 4 and 6% for every portfolio begun on January 1 since 1972—except for the 2011, 2012, and 2013 portfolios, which are suffering from this year's negative return. ...

stuper1 wrote:

Pointedstick wrote: That downward-sloping CAGR graph is not encouraging.

We need a graph of real CAGRs after subtracting inflation.  I think (hope) that would not have the downward-sloping trend.

I'll upload one tomorrow.

I prefer that dividends and coupon payments be reinvested in stocks and bonds, respectively.  I don't think that rebalancing should occur just because I receive one of these payments.  But what do the numbers say? Below I have drawn the CAGRs for PPs starting on January 1 of each year since 1972 and...

One more doubt that I would like to know how you do it: - if you have a 100k PP - and you have new 10k to add - it is time to rebalance, but 2,5k to each asset is not so much ... How do you proceed? 1) Rebalance and then add? 2) Or just add to to make it all 25% :-\ There's no difference between th...

For a Roth contribution of $5000, I would put 29% ($1450) in stocks, 24% ($1200) in gold, and 23.5% ($1175) each in bonds and cash.  That way the relative amounts of each asset would remain unchanged before and after your contribution, and you would not be making an emotional decision about (partial...

It sounds very logical indeed.  I believe Harry Browne never claimed there was anything scientific about 35/15.  The fact is that rebalancing more often is sometimes better, and rebalancing less often is sometimes better.  It's going to be hard to scientifically prove what bands are best, since tha...

Hi, I'm a new member and this is my first post.  I have lurked for a few months and have learned a lot.  Thank you all. I have a question about rebalancing bands.  I'm curious whether 40/15 bands might be attractive for rebalancing events (rather than 35/15) and whether anyone has modeled them?  I'm...