How Often Should You Rebalance Your Portfolio?
No one has a crystal ball, but there is a sensible answer
In his book Investing Made Simple, Mike Piper writes:
“How often should an investor rebalance? That’s a tricky question...Unfortunately, the best-performing rebalancing strategy varies from period to period, and it’s no easy task to predict which strategy will do best over your investing career.”
Piper makes a good point. People debate whether rebalancing should be done daily, monthly, quarterly, annually or on some other schedule. My own personal view is that an investor should rebalance only when his or her portfolio deviates by a specific percentage—for example, five or ten percentage points—and not on a specific calendar schedule. But I also agree with Piper’s overall conclusion on this topic: “...my suggestion is simply to pick one method and resolve to stick with it.”
As often as you can let anyone else know how they’re supposed to know, who is, or is not, any of King James’ fake man-made religion usury labels.