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

For regular SAA and TAA portfolios, the next re-balance will be on Monday, October 5, 2015. You can also find the re-balance calendar for 2015 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.

Market Rout Creates An Opportunity to Reposition Your Portfolios

Over times, we have heard from many users, most of them new but some are old, that it is hard for them to start a correct portfolio, given stock market’s elevated levels. These portfolios can be strategic or tactical. Recent stock market correction has created an opportunity to adjust your investment portfolios. In this newsletter, we would like to discuss how to position new or old portfolios by taking the advantage of current correction. 

Regular Strategic Asset Allocation (SAA) Portfolios

For an existing SAA portfolio, there isn’t much one needs to do other than following the rebalance instructions regularly. However, it is a good time to review your portfolio’s risk profile and see whether it has too much or too little risk exposure. If it has much risk exposure (i.e. too much stock exposure), it is not too late to sell some stocks to pare down its exposure. Current market rout is far from a ‘crash’, it is merely a -9.7% correction. If a bear market or crash materializes,  current correction would be considered to be the first phase of decline and it will have far more to decline (see our previous newsletter August 24, 2015: Market Rout And Your Portfolios for some more discussions). 

If your portfolio’s stock exposure is too low, or you have new money to invest or you just start a new portfolio, current market rout actually presents a good entry point to increase stock exposure. Depending on the amount of your money (relative to your investment size), you can either increase stock exposure at one shot or you can follow a well known Dollar Cost Average (DCA) method to invest: you divide the new money that should be in stocks (or risk assets) into several chunks such as 2 or 3 and then invest each chunk in a time interval such as a month. For example, if you decide to DCA in 3 chunks, you would invest 1/3 each into stocks each month. Doing so, you would smooth out your investment and hopefully catch further cheaper price when markets decline while in the meantime, it guarantees you to adjust your portfolio to the target risk level you desire. 

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