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When to rebalance portfolio

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asked Feb 01, 2017 03:41 PM by
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Hello, I am fairly new to this but have been using the money geek model portfolios to help with my TFSA investing. I have a question about timing for buying/selling and making changes to a portfolio. I know the general rule of "buy low-sell high", but is there any other guidance that you can provide on when is the optimal time/frequency to rebalance or add funds to a portfolio (and should you still do it if the value of some of the ETFs is considerably higher than when you originally bought them, e.g. close to a 52 week high). I've encountered situations where I sold some stocks and had a fair amount of cash sitting in my TFSA, but I've hesitated from re-investing as per the model portfolio breakdowns given the significant increase in value of some of the ETFs. Is that just a beginner's hangup? Any insight would be much appreciated. Thanks very much for all the work you put into this blog!

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answered Feb 02, 2017 11:06 AM by
Jin Won Choi gravatar image Administrator

Hi anulka,

Unfortunately, there isn't a hard and fast rule to follow with regards to frequency and timing of rebalancing. That said, in general, it's not a good idea to base your purchasing decision on whether share prices have risen or not. For example, some people probably hesitated from investing in BRK-B ten years ago, because its price had risen so much. Those people would have missed out on more than doubling of BRK-B since.

If you're looking for more personalized advice beyond this, I unfortunately can't give you any answers here. If you'd still like an answer, please post a new question for 'Approved Advisors Only', and one of the advisors will get back to you.

Jin

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