Subcomponents: When Specific Holdings Peform Differently

[dualstow]

You may spread your gold holdings over a variety of ETFs like GTU, PHYS and IAU.
MediumTex has written about holding both EDV and VUSTX (and perhaps the actual treasuries as well?) for the bond component.

Let's say that when it's time to rebalance gold, your IAU shares are responsible for breaking through the rebalancing bands while PHYS has been lagging and has just broken even.

One way or another, you need to sell gold and buy more stocks and/or bonds or short term treasuries. You could unload your PHYS if you really don't like it, and that sale would be tax neutral since you have no profit. Of course, if you did something like this every time, the value of your portfolio as a whole would never rise very much. So, you mainly sell some of your high-flying IAU shares and pay your taxes.

One question is, when the time comes to buy gold again will you try to make sure that you specifically regain IAU shares, and why?
Hitting rebalancing bands is not something that occurs often, so perhaps it's time to reevaluate all the ETFs and to keep an eye out for new ones.
A related question: general rebalancing bands aside, would you ever rebalance within one of the four components? That is, would you sell IAU to buy lagging PHYS even when it's not time to add stocks, money market or bonds?

[MediumTex]

You might do such a thing if the PHYS premium to NAV was surging, as it has done in the past.  You might sell PHYS and buy IAU when the PHYS premium hit a certain point, and vice versa when the premium was low.

Of course this looks more like speculating than PP investing.

[MediumTex]

I moved the off topic stuff to a new topic here:

http://gyroscopicinvesting.com/forum/in ... opic=828.0