Rebalance during these days of high volatility?

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thisisallen
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Re: Rebalance during these days of high volatility?

Post by thisisallen » Thu Mar 12, 2020 1:47 pm

Not sure about market timing aspect. That’s why I started the conversation to ask for some help with this. HB encouraged investors not to pay a lot of attention to their PP because it is not necessary. However he said that if you happen to find out from the news or a friend, etc that a big event could have significantly altered your portfolio then it is worth checking in on it. So I assume that if you check and find that a rebalance is required then you should perform it. Yes?
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Cortopassi
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Re: Rebalance during these days of high volatility?

Post by Cortopassi » Thu Mar 12, 2020 1:59 pm

Ahh, so the question was if you had looked at the right time, it would have been a rebalancing event. Sorry.

In that case, since I look all the time, still, I would have rebalanced.

Now if I was away from the computer for a day or two and come back to it, I would likely not look at stuff historically (meaning a couple days) to see if an event happened.

So, in my case, if the rebalance was triggered at 10AM, and I was in a meeting and by 11AM it wasn't being triggered, I would not rebalance until I saw it in real time, or after the market closed. Since some of my holdings are mutual funds in a 401k, I should probably hold off on deciding until those are priced later in the day.
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Re: Rebalance during these days of high volatility?

Post by Jack Jones » Thu Mar 12, 2020 2:10 pm

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The stock % is based on last night's close. After today closes, I'm thinking I'll be rebalancing cash -> stocks. A little nervous though. Seems like another -5% day tomorrow could be likely.
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Re: Rebalance during these days of high volatility?

Post by flyingpylon » Thu Mar 12, 2020 2:31 pm

Everyone just has to find the right balance for them.

If you're checking constantly and want to use a hair-trigger to rebalance, that's fine but certainly not required.

Some people may only check their accounts a few times a year and will miss short periods of extreme volatility, and that's fine too.

Personally I just keep an eye on the markets enough to know whether something is going on and if there is, then I'll check my spreadsheet to see how close I'm getting to my bands. If I'm within about 3% or so I'll start to pay closer attention and I'll make a tentative transaction plan. If things progress to within about 1% or less of a band I'll go ahead and pull the trigger if I'm comfortable with that. Or I might wait a few days to see how things pan out. Or I might spread my transactions out a little.

However, I will admit that I have missed a few good opportunities because I waited for that last 1%. So while sometimes it's good to be mechanical and disciplined about things, it doesn't always work in your favor.
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Re: Rebalance during these days of high volatility?

Post by Smith1776 » Thu Mar 12, 2020 3:05 pm

Wow. Even gold and long bonds haven't been spared recently.

The only thing holding steady is good ol' cash.

Gonna go make fondle my T-bills. BRB.
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Re: Rebalance during these days of high volatility?

Post by turbo8214 » Thu Mar 12, 2020 11:17 pm

Smith1776 wrote:
Thu Mar 12, 2020 3:05 pm
Wow. Even gold and long bonds haven't been spared recently.

The only thing holding steady is good ol' cash.
Noticed that! I recall there was a similar stretch in 2008.
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Re: Rebalance during these days of high volatility?

Post by Jack Jones » Fri Mar 13, 2020 7:44 am

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After yesterday, looks even more like I should rebalance Cash -> Stocks. I have limited mobility due to 401k restrictions, so that's all the rebalancing I can really do. The investments are mutual funds, so I think I have until the end of the day to decide.
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Re: Rebalance during these days of high volatility?

Post by Jack Jones » Wed Mar 18, 2020 11:20 am

Still haven’t pulled the trigger on the above. Thinking of doing so before EOD but still a bit apprehensive. Anyone else rebalancing into stocks?
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Re: Rebalance during these days of high volatility?

Post by turbo8214 » Wed Mar 18, 2020 12:07 pm

Jack Jones wrote:
Wed Mar 18, 2020 11:20 am
Still haven’t pulled the trigger on the above. Thinking of doing so before EOD but still a bit apprehensive. Anyone else rebalancing into stocks?
Do you think the stock market is near the bottom? I don't see how it doesn't continue to slide for at least the next couple of months.
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Re: Rebalance during these days of high volatility?

Post by barrett » Wed Mar 18, 2020 12:49 pm

turbo8214 wrote:
Wed Mar 18, 2020 12:07 pm
Jack Jones wrote:
Wed Mar 18, 2020 11:20 am
Still haven’t pulled the trigger on the above. Thinking of doing so before EOD but still a bit apprehensive. Anyone else rebalancing into stocks?
Do you think the stock market is near the bottom? I don't see how it doesn't continue to slide for at least the next couple of months.
Thinking about doing a pmward partial rebalance before closing today. Maybe 1/4 back up to my normal stock allocation. Yeah, stocks could keep going down but it's really hard to call the bottom. All we can say for sure is that money invested today will buy a lot more shares than it would have a couple of weeks ago.
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Re: Rebalance during these days of high volatility?

Post by turbo8214 » Wed Mar 18, 2020 1:19 pm

barrett wrote:
Wed Mar 18, 2020 12:49 pm
Thinking about doing a pmward partial rebalance before closing today. Maybe 1/4 back up to my normal stock allocation. Yeah, stocks could keep going down but it's really hard to call the bottom. All we can say for sure is that money invested today will buy a lot more shares than it would have a couple of weeks ago.
That is true! Although shares might be significantly expensive in two weeks or two months. It may be best to slowly DCA in.
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Re: Rebalance during these days of high volatility?

Post by pmward » Wed Mar 18, 2020 2:20 pm

Yes and remember that bottoms happen when things look the worst. The market tends to sniff out the recovery and start going back up long before any info or data actually shows it. So that's why a DCA rebalance is great if you're too nervous to pull the full trigger. We may be closer to the bottom than any of us think. Hell, today could be the bottom. Then again, we could still be a ways from the bottom. This is a crazy market right now. I'm sure of one thing, that this is a good price to buy stocks at long term, bottom or not.
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