The main use case for the Planner assumes dynamic asset allocation over time, responding to the market ERP and calculated with the Merton share.I may be missing something…
In retirement, you could withdraw from the overweight asset.
To me "strategic" vs "tactical" doesn't describe this. It's just costs vs benefits at different frequencies. As the frequency of rebalancing increases, the costs start to outweigh the benefits. So you would use a wide enough rebalancing band—my guess is wide enough that you don't have to rebalance more than a few times a year. As noted in the posts above, the penalty of being a bit off from the target is likely small. So roughly right is fine. Precisely wrong is worse.
In my mind, rebalancing is very different than changing my target AA.
I rebalance on 5% bands, but so far haven’t changed my AA since Retirement. May do so at 70 once SS kicks in since my Cashflow needs shift dramatically.
Guess I am focused on the discussion of using the Merton share to tactical shift allocations based on expected returns. It’s not clear if TPAW supports or advocates this.
**This thread started as a discussion on the Merton Share and has morphed to TPAW …
WoodSpinner
Statistics: Posted by ConstantChrysalis — Thu Jan 30, 2025 9:45 pm — Replies 1361 — Views 347722