Do most people tend to accumlate money in their cash portion?

[robg]

Seems like the "classic" PP way is to accumulate cash from savings or dividends and then wait till you hit a rebalancing band to "redistribute".  Does anyone employ "dollar cost averaging" and buy PP buckets on a regular basis. For example, suppose you save $1000 from your paycheck each month. You could either add that to your cash portion, or you could buy 25% each of the various PP components. 

From what I can tell, either way has pros/cons:
-By adding PP "buckets" at a regular basis, you: don't distort the rebalancing signals and get the extra dividends from the stocks and LT bonds you're buying but you're adding complexity as far as calculating tax basis and you potentially lose some of the "Firepower" that comes with using accumlated cash to buy when the market in 1 of the PP componetns move signifcantly.
-By accumulating in the cash portion only the pros/cons listed above reverse.

I'm tending toward the "lazy" approach of allowing money to accumlate in the cash portion, but am always second guessing that approach. 

[DragonJoey3]

Because the majority of my accumulation occurs in a company 401(k) with terrible cash equivalents I tend to accumulate in the stock portion.  I then usually fund a couple Roth IRAs at the beginning of the year and fill that with bonds/gold/cash in an attempt to rebalance the portfolio.  What I can't rebalance totally to 25% in tax free accounts I buy outside of them.

[buddtholomew]

As a predominantly taxable investor, I prefer to accumulate cash and when the time comes plan to purchase lagging assets in order to restore the PP to the 4x25 allocation. I'm not certain that I would adhere to this approach if invested in tax-deferred accounts. Some prefer to purchase assets according to their current weightings and others DCA into positions to stay as close to 4x25% as possible.

[flyingpylon]

I'm tending toward the "lazy" approach of allowing money to accumlate in the cash portion, but am always second guessing that approach.

That's what I do because it's easier.  However, rebalancing intervals will vary depending on the amount already in the PP and the size of contributions (i.e. if you have a small account but large contributions you will probably have to rebalance more frequently).

Another thing to consider is how you'll feel at rebalancing time.  It can be a little nerve-wracking to rebalance a large amount of cash all at once (Should I wait a week?  Should I wait until asset X goes up/down?).  Breaking it up into a couple of smaller rebalances can be less stressful, even if it's not technically the most optimized method.  Just talking about distributing cash contributions here, not pre-empting the rebalancing bands on other assets.

[ns2]

Most of my new money goes into 401k's for me and my wife. That all goes into stock because it's the only PP friendly thing available.

I do also accumulate cash and if I get enough I might buy some physical gold.

[Tyler]

Personally, I sorta split the difference.  I let new money accumulate in my bank account, and then buy the lagging asset(s) with a more sizable lump sum once my bank account "band" is hit.  That keeps my PP pretty level while also keeping my effort and transaction fees to a minimum.

AFAIK, no matter how you add money you can't really screw it up unless you attempt to time things.  One method may show a slight statistical improvement in returns over another, but it isn't huge.  So pick what makes you comfortable and don't over-think it.