Who's had to rebalance?

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Matthew19
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Who's had to rebalance?

Post by Matthew19 » Mon Mar 23, 2020 1:40 pm

I'm getting close on the stock side. about 17% right now. Anyone hit a band yet?
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Re: Who's had to rebalance?

Post by stuper1 » Mon Mar 23, 2020 1:54 pm

I'm not running a pure PP. My portfolio is closer to a GB, and a few of the 5/25 bands were breached already. I did some rebalancing in the last few days to lock in some TLT/EDV gains and buy some stocks on sale, being careful to watch the bid/ask spread and to sell on up days and buy on down days. At the same time, I did a little rejiggering to get over $50k in cash in one Roth account, so that I could put it in Vanguard Treasury Money Market Fund, per the recommendation of someone on this forum (I forget who). I also moved some short-term treasuries out of one account and into cash at my bank, per someone else's recommendation (again I forget who), just in case things get weird at the brokerages, so I can have some cash closer by. I also upped my stash of physical cash at home a bit in case things get really weird.

I definitely feel better prepared to keep my family financially safe based on a lot of good advice from the smart people on this forum.
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Re: Who's had to rebalance?

Post by Ugly_Bird » Mon Mar 23, 2020 2:11 pm

Matthew19 wrote:
Mon Mar 23, 2020 1:40 pm
I'm getting close on the stock side. about 17% right now. Anyone hit a band yet?
Not yet, but probably close to 17%, will know tonight
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Matthew19
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Re: Who's had to rebalance?

Post by Matthew19 » Mon Mar 23, 2020 2:21 pm

I've been looking to transfer from PP to GB for a while now. It may be time to start that process while rebalancing.
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Dieter
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Re: Who's had to rebalance?

Post by Dieter » Mon Mar 23, 2020 3:39 pm

A little on Friday from cash to stocks in my 403(b).

Debating when to do more, as I think I'm at our house to LTT / Gold bands.
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sophie
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Re: Who's had to rebalance?

Post by sophie » Mon Mar 23, 2020 3:43 pm

I'm very close to crossing bands both on the low side (small caps) and high side (bonds). Still not quite ready to pull the trigger though. Just naturally hesitant about any big financial moves.
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Re: Who's had to rebalance?

Post by Kriegsspiel » Mon Mar 23, 2020 3:50 pm

I'm close to selling gold and buying stocks.
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Re: Who's had to rebalance?

Post by Smith1776 » Mon Mar 23, 2020 5:11 pm

I rebalanced about a week ago I think. However this was because I was using 20%/30% bands.
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Re: Who's had to rebalance?

Post by Kevin K. » Mon Mar 23, 2020 5:20 pm

Matthew19 wrote:
Mon Mar 23, 2020 2:21 pm
I've been looking to transfer from PP to GB for a while now. It may be time to start that process while rebalancing.
I've moved in the opposite direction here - not that I have a crystal ball. But the GB tilts towards prosperity and that sure doesn't seem to be in the cards anytime soon. Not selling any stocks at this point but using the 4 x 25% asset class and 15/35 PP rebalancing bands. I'd probably be braver if I were still working or had any prospects of bringing in income to replenish the portfolio.
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Re: Who's had to rebalance?

Post by flyingpylon » Mon Mar 23, 2020 6:22 pm

I'm doing a gradual rebalance of my GB, trying to take advantage of opportunities as things fluctuate.

I have some LTTs that should be replaced next year, but when they popped up 2 weeks ago I sold 1/3 of that position. That brought LTTs to the target allocation of 20%.

I have some extra cash to deploy, so I'm spreading out my purchases of stocks on big down days. I accept that I am not talented or lucky enough to time the exact bottom so I'm okay with buying on the way down and probably back up the other side too. I'm just trying to keep stocks (SCV in particular) up off the lower rebalancing band at this point.

I'm overweight gold but short of my rebalancing band so I'm letting that ride.

I don't usually do things this way but everything is just batshit crazy right now. Ordinarily I would go ahead and rebalance all at once. I typically just track YTD performance and I'm down about 10% which doesn't seem horrible, all things considered.
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Re: Who's had to rebalance?

Post by thisisallen » Mon Mar 23, 2020 6:27 pm

Rebalanced several days ago and gyroscope is working nicely again. No worries.
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Re: Who's had to rebalance?

Post by pmward » Mon Mar 23, 2020 6:33 pm

I rebalanced some bonds into stocks. Gold is getting up there as well, but I'm not going to rebalance out of gold at this time. I'm way too bullish on gold long term to sell any.
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Re: Who's had to rebalance?

Post by Matthew19 » Mon Mar 23, 2020 8:16 pm

sophie wrote:
Mon Mar 23, 2020 3:43 pm
I'm very close to crossing bands both on the low side (small caps) and high side (bonds). Still not quite ready to pull the trigger though. Just naturally hesitant about any big financial moves.
You're all GB right?
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sophie
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Re: Who's had to rebalance?

Post by sophie » Mon Mar 23, 2020 9:24 pm

Yes.

I'm still hesitating. I figured that the entire stock allocation, total market + small caps, was still above threshold even though small caps had dropped below the band. No other asset has crossed a band. So - a mandatory rebalance yet.
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Re: Who's had to rebalance?

Post by frugal » Sat Mar 28, 2020 7:15 am

sophie wrote:
Mon Mar 23, 2020 9:24 pm
Yes.

I'm still hesitating. I figured that the entire stock allocation, total market + small caps, was still above threshold even though small caps had dropped below the band. No other asset has crossed a band. So - a mandatory rebalance yet.
Hi SOPHIE!!!

I am adding stocks to rebalance.

New fresh money to my EU-PP

Please advice.

^-^
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Re: Who's had to rebalance?

Post by sophie » Sat Mar 28, 2020 11:42 am

Sorry frugal, but I could not possibly advise you....when I barely know what to do myself. I haven't rebalanced yet. Bonds & small caps still within 1% of crossing a band though, so....maybe soon.
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Re: Who's had to rebalance?

Post by Kevin K. » Sat Mar 28, 2020 12:11 pm

It's kind of you to share your thinking about this Sophie! You've long been one of the most insightful posters on the forum so reading that you're not certain either is helpful.

As I mentioned earlier in this thread my thought for the moment anyway is to treat my GB allocation, which I still believe in long-term, as though it were a traditional PP for rebalancing purposes, going with 4 x 25% "targets" and the 15%/35% rebalancing bands.

It's been interesting to me to see a friend's "Larry" Portfolio (with 10% each SCV, EM and TSM and 70% ITT's) experiencing about half the drawdowns of the GB in the market carnage thus far but I still believe the PP and GB are inherently the most robustly defensive options I have available to me. I remind myself that in a world where Ray Dalio's down 20% I'm doing OK.
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Re: Who's had to rebalance?

Post by Dieter » Sat Mar 28, 2020 3:32 pm

Kevin K. wrote:
Sat Mar 28, 2020 12:11 pm
...
It's been interesting to me to see a friend's "Larry" Portfolio (with 10% each SCV, EM and TSM and 70% ITT's) experiencing about half the drawdowns of the GB in the market carnage thus far
...
Got me curious....

Based on VG funds, 2020 YTD (March 27):

TSM : -22%
SCV: -35%
EM: -25%

MM: +.33% (Federal MM)
ITT: +7%
LTT: +22%
TBM: 3% (
for comparison)

IAU: +6.15 (ok, not a VG mutual fund :) )

Soo:
*The 40% GB LTT + Cash better than 40% of Larry ITT :
11% vs 7% return
(Or does Larry have higher duration than VGs ITT?)

* Gold and ITT close, but 20% with a slight edge to Larry

* Stock
10% TSM and 10% SCV each a wash
10% GB TSM slightly less bad than Larry EM
10% GB SCV horrible vs Larry ITT (42% swing to Larry)

Summary: higher allocation to risky stocks (SCV) hurts during a (this) crash. A 5.8% drop vs 3.3%? (Vs 12% drop for traditional 60/40.)
(Assuming I'm doing this correctly).

Assuming everyone was at default allocation to start the year and using the same funds. Your mileage may vary. At

Of course, with markets moving 5-10%/day, different answer likely every day....
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Re: Who's had to rebalance?

Post by Kevin K. » Sat Mar 28, 2020 6:57 pm

Thanks Dieter!

I was going off of Tyler's one month chart:

https://portfoliocharts.com/2020/03/23/ ... ful-month/

But you're right, with such wild swings it's a moving target.

SCV has indeed been getting killed and that being the case along with (to a lesser degree) the 40% to stocks vs. 25% and consequent slight but still impactful reduction in gold, LTT and STT holdings accounts for the classic PP's better performance. As a very savvy finance writer (Bob Clyatt, author of "Live More, Work Less") once put it, the PP is a bunker and is doing what it's supposed to do.

I should also have pointed out that there are an infinite number of iterations of the "Larry" portfolio but the one on the Portfolio Charts site is a version recommended by Swedroe himself that contains 7.5% International Small Cap Value, 7.5% Emerging Markets and 15% U.S. SCV along with the 70% ITT's. My choice of stocks (10% each TSM, EM and U.S. SCV) is a bit more conservative and is inspired by Desert's most recent suggestion of a modified or PP-informed Larry Portfolio with that stock allocation, 10% gold and the rest ITT's.
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