I've been debating myself over the re-balancing question for months now, but I can't seem to come to a proper conclusion.
I have a Roth IRA in Vanguard exclusively made up of Vanguard ETFs. This gives me two clear advantages: 1) All trades are free, 2) Rock bottom maintenance fees.
I have been trying to reconcile JL Collin's advice with what I personally witness in my accounts. He advocates a simple total market investment with a bond buffer. Just the two ETFs in my case. Traditional advice would say that diversity is good, and you can take advantage of arbitrage annually/semiannually through re-balancing. Personally, I've noticed that my high dividend and REIT holdings seem to be weakly/negatively correlated with my S&P 500 holdings.
My question is, given that I pay no taxes or trade fees in my account, can very frequent (weekly, or even daily) re-balancing hurt my performance? The analyses I've read show that there is little difference, but always mention trade fees, which don't apply in this case.
I have a feeling that, with weekly or daily re-balancing, I might be able to eek out a maybe a quarter or half a point over breakfast every morning.
Submitted June 07, 2018 at 10:35AM by sbf2009 https://ift.tt/2xRuiPP
