Re-balance Cycle Reminder All MyPlanIQ’s newsletters are archived here.

We just had a rebalance today. For regular SAA and TAA portfolios, the next re-balance will be on Monday, July 7, 2014. You can also find the re-balance calendar for 2013 on ‘Dashboard‘ page once you log in.

As a reminder to expert users: advanced portfolios are still re-balanced based on their original re-balance schedules and they are not the same as those used in Strategic and Tactical Asset Allocation (SAA and TAA) portfolios of a plan.

Please note that we now list the next re-balance date on every portfolio page.

Tips on portfolio rebalance

As usual, we had several questions from users on today’s portfolio rebalance. We would like to address Frequently Asked Questions (FAQs) related to rebalancing in this newsletter. 

Asset allocation first, fund selection second

We emphasize that when it comes to rebalancing, one should obey the principle that the very first goal is to have a proper asset allocation: i.e. allocation percentages to major asset classes. Only after making sure you have a proper allocation, you then work on fund selection. Regarding the importance of asset allocation and fund selection, an often cited research result is a  a study by Gary Brinson, Randolph Hood and Gilbert Beebower that states asset allocation is responsible for over 90% of variations in portfolio return. Even though it is still debatable for the accuracy and applicability of this study, the result has strong intuition backing:  whether a portfolio is heavily exposed to stocks or not certainly has more effects 0n the portfolio’s return than what stock or bond funds used in this portfolio. For example, in an extreme case, a 100% stock portfolio will behave drastically different from a 100% bond portfolio. For more on this topic, refer to  asset allocation page

For portfolio rebalancing, asset allocation checkup sequence is

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