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
and bonds
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. 


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