Beth Pinsker: Rebalancing your stocks and bonds too much could cost you more than it’s worth

by | Dec 18, 2022 | Stock Market

It’s a lot more fun to talk about rebalancing your portfolio when it’s out of whack because the market has gone up. But this year, both stocks
SPX,
-1.11%
and bonds
TMUBMUSD10Y,
3.488%
are down about the same amount, and there’s lots of volatility, so you might not need to heed those frantic last-minute reminders about resetting your allocations in a rush at the end of December. You can instead focus on a full financial reset and plan for next year. 

“This year, for me personally, was a year when I didn’t take it so strictly,” says Beata Dragovics, a certified financial planner and founder of Freedom Trail Financial based in Boston.  Most investors don’t need to think about rebalancing more than once a year, according to recent research from Vanguard.  “You have to be mindful of how much it costs. Even if there’s no brokerage fee, there’s still a cost to each transaction. At the very least, the cost to sell and buy are not exactly the same,” says Nathan Zahm, head of goal-based investing research for Vanguard. 

Vanguard

Article Attribution | Read More at Article Source

Share This