Personal Investments • Why I prefer multiple asset classes to the BH 3 fund portfolio

OP, once you set to market weight one time, when do you ever need to rebalance? Or are you forever rebalancing to whatever the market weight was at that initial time?

You said you have 20% rebalancing bands, right? So if the current market weight of an asset class strays 20% from of the initial market weight, you rebalance back to that? What month and year did you start this strategy? Why do you think the weighting that month and year is the appropriate weighting to maintain in perpetuity?

That's a lot of questions; I think an answer to your first question should answer them all.

I rebalance whenever an asset class goes outside the 20% band, for example, an AA of 10% for VBK goes beyond 12% or 8%. I would use the same logic with a BH 3 fund portfolio.

Make sense?

But you said you rebalance to market weight, right? That differs from 3-fund rebalancing, where people rebalance to target weights based on their chosen risk tolerance. Once you are at market weight, any changes necessarily will still be market weight and thus need no rebalancing.

So it appears you are rebalancing to the market weights that existed at the time you started this strategy. Why is that your goal?

Statistics: Posted by murrays — Wed May 22, 2024 11:21 pm — Replies 150 — Views 8149