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How often should you re-balance your portfolio?

#11
I also never re-balance. I guess the concept is different whether you are a stock or a mutual fund investor. If you only have mutual funds, it kind of make sense, one sector went much farther than the others and since you do not know or get involved in the exact composition of the fund, you do not have a firm grip of why. If you do not have a firm grip of why, chances of still going up are 50/50 and I better cash in a bit.
 
If you are an investor in stocks and a few of them grew much faster and you believe in your analysis that it still has ground to advance more, why sell it?
 
Of course, one still has to avoid "putting all the eggs in one basket" but I do not see this as equivalent of "re-balancing".
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#12
I try to do it daily. Not only do I re-balance my financial holdings, I also try to re-balance my mental and physical bearings. Practicing Taichi helps
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#13
Periodically I review my portfolio and sell my dogs (under performing stocks and funds) and try to buy something better. I try not to look back and instead focus on my new portfolio. If I have a stock that has performed really well, then I will sell some shares and invest in something else to give myself some more diversity.
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#14
I do re-balance, some religiously/mechanically and some more loosely, as and when needed. The re balancing happens at different levels too. I analyze my overall portfolio at least once a month, sometimes more often. More often than not, I do not need to move fund around. This year has been an exception in that, I did move fund across investments a few times in my 401K. Having said that, my specific actions/cadence may not be very interesting to you because they are appropriate for my investment policy. So let me take a different stab at your query.
 
The notion of re-balancing (or keeping portfolio balanced) arise only when one is diversifying, implicitly or explicitly, within a broad range (e.g. different asset classes) or within a narrow range (e.g., different stocks in a sector). If one puts everything in a single "thing" (whether a stock, or a "target-retirement-date-fund", there is no question of re-balancing. There is no question of diversification either beyond what is achieved  within that single "thing" (e.g., a company's business may be diversified across different products and markets, a broad fund maybe diversified across its individual holdings). However, the moment a second (or a 3rd/4th/etc.) investment is added, it is added for a specific purpose. It only makes sense to add a second investment if the latter is not tightly correlated to the first one. If the second component is tightly correlated with the first (i.e., the second one *always* goes up/down when the first one does, and vice versa), then it makes no sense at all to add a second investment. In fact it is more useful to put everything into one of these 2, whichever has a higher return. In reality, the second component is added only for the purpose of diversification, to avoid "putting all eggs in the same basket". Diversification through the second component is the only free-lunch available that can to reduce the "unique risk" associated with the first component. This guaranteed free-lunch comes at the cost of a possible-but-not-guaranteed sumptuous-dinner . I.e., if the first investment is the more rewarding one but it's "unique-risk" never materializes in the investment lifetime, then the diversification did not actually do more than an insurance without filing a claim ever. Regardless, the point is that, (a) one adds a second component to "diversify" the overall portfolio, and, (b) the % allocation of the second component wrt the first component is important for the purpose of this diversification goal. Combining these two points, one can conclude that, all things being equal (especially the degree of correlation of the second component with the first), if the relative % allocation of the second component deviates, then the original goal of diversification is defeated. If the goal has shifted, or the correlation changes, then the out-of-balance portfolio might be okay. But if neither is true, then the avoidance of re balancing is the same as not meeting the diversification goal.
 
As for addressing the "out-of-balance" problem of the portfolio, there are 2 different approaches. When one has a lot of potential "new money" in the coming years and the sum of that money is quite sizable compared to existing investment assets (i.e., someone in their "asset accumulation" phase, mostly in the first half of their earning career), then the new money can be used to fill in the "under-funded" assets, as and when they come. Conversely, if one has a much sizable investment compared to the potential future money, then reallocating fund across diverse components is necessary to avoid the unmitigable "unique-risks" of their larger investments.
 
Sounds like you are in the earlier/mid part of your career and have a lot of time to accumulate wealth. In that case, high savings rate and  dollar-cost-averaging would be your best friends at this point. You are already putting new money in underfunded/depressed assets (by changing contribution %) and that specific technique should go a long way in terms of getting to a "balanced and meaningfully diversified portfolio".
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#15
I run my buy/sell programs on a weekly basis and although I do not actually re-balance as is traditionally defined, I do buy and sell as conditions dictate.
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