If you read the above Kitces article, You can see that rebalancing can be used for risk management AND opportunistic revenue generation.The logic for the rebalancing bands is that you should rebalance when you current portfolio is significantly different from your target. If you have a 50/50 portfolio and the stock market loses 1/5 of its value, your allocation becomes 44/56, which is enough of a difference that you want to rebalance to get back to the right risk level. If you start at 90/10, the same.market movement makes you 88/12, which makes much less difference.
The risk management aspect, is of course, much less complicated- achieved by moving between asset classes. Whereas, revenue generation is more complex and time intensive.
Statistics: Posted by Just Asking — Sat Nov 08, 2025 10:34 pm — Replies 19 — Views 1304