Regular reinvesting

[tjt]

My monthly savings (income minus expenses) is about 1% of my PP portfolio.  When investing that money, should I put the money into the lowest proportioned asset or should I distribute it evenly 4 ways?

Or I suppose I could do nothing, wait until cash hits 35% and rebalance then...

What do you all do?

[foglifter]

You could keep these money in cash or in a short-term Treasury bond. I accumulate the money intended for PP in PRPFX (in a taxable account) and in PTRAX (in 401k) and invest them when the rebalancing is due. I just don't want them to sit in cash, although there could be a time when cash is the only thing that doesn't tank.

[Storm]

You can either purchase the lagging asset, attempting to get it as close to 25% as possible, or you can add it to cash and rebalance when it hits 35%.

Personally I have my paycheck 401k deduction automatically sent to my Brokerage-Link account and I just buy the lagging asset.  When I have extra savings in my non-tax deferred account, I do the same thing.  By doing this I have so far been able to avoid rebalancing, which saves me from taxable events in my non-tax deferred account.

It would be great to see some data modeling on the difference, but I suspect it would be almost the same.

Assume a PP investor starts 1980 and contributes $1,000 per month to his 401k ($12,000 per year).  By 2010, how much difference would it make if he purchased the lagging asset each month or just sent it to cash and rebalanced at 35%?

I'm not sure where I would even begin to get monthly data going back that far, but it sure would be interesting to see the difference in long term performance.

[dualstow]

I would reinvest in all four but I don't. The reason is that I feel I have enough gold ETFs and would like to add more gold coins. If I buy a bunch at once, I can get a break on the dealer's fee. So, I'm going to accumulate a bit of cash.

If you're going to just buy gold ETFs, and you can afford at least one ~$1000 treasury bond (or TLT), you could buy all four.