I'm new to investing and would like to know when we should be checking in to re-balance our portfolios
Hi Wailan, good question.
I designed and operate the regular portfolios so that only an annual rebalance is necessary. I anticipate that I will update the portfolios significantly maybe once every year to adjust for changes in the investment landscape. For example, I may decide to add a Canadian stock ETF to the portfolios once I feel that Canadian stocks are cheap enough. I will email members about the changes once they happen.
That said, many people effectively end up rebalancing their portfolios just by adding new savings every month. For example, if the international stock ETF goes down, rebalancing the portfolio may call for buying more of the ETF. In that case, adding new savings and buying international stocks with them will be like rebalancing.
I've designed the Premium portfolios on the other hand, with more frequent rebalancing in mind. The fortunes and prices of individual stocks change much more quickly, which leads to more frequent updates of the portfolios.
I hope that answers your question, Jin
(This is not an answer, but I was unable to type more than 300 words in the Comments text box.)
I want to make sure that I understand your comment on continuous rebalancing e.g., investing savings on a monthly "contribution" plan. Suppose that I budget $500/month for investing, to be spread across TFSA and RRSP accounts under my name and my wife's name. In the month of November, ETF A is considered a better buy than ETF B, and in December, the converse is true. Should I purchase $500 of ETF A in November and $500 of ETF B in December? Or, should I try not to be savvy and just stick with the pre-defined ratio for my portfolio on a monthly basis?
I will regularly encounter this problem, and I would like to know how much thought to put into the distribution of investments on a monthly basis.
Asked: Dec 05, 2014 10:26 PM
Seen: 176 times
Last updated: Dec 08 '14