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Index investors - how often do you review & rebalance

Discussion in 'Investing Strategies' started by jeremykl, 9th Apr, 2015.

  1. jeremykl

    jeremykl New Member

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    8th Apr, 2015
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    Location:
    Darlinghurst NSW
    Are there people who are 100% index (like ETF) investors? How frequently do you rebalance? What is the best way to stay on top of when to rebalance?
     
  2. Jess91

    Jess91 New Member

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    15th Jun, 2015
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    Location:
    Melbourne
    When you say 100% index, do you mean investing in different index funds such as a bond index, asx200 index, ppty index? Then re-balancing really depends on your individual risk appetite. If you are after high growth, then you would over-weight riskier indexes such as international shares or emerging market's. Conversely, you would do the opposite if you were risk adverse.

    Re-balancing; this is really a subjective tactic that involves 'timing' the market. Its all about timing and not many investors can perfectly time a market. Knowing when a bubble is going to burst or if we are truly in a bull or bear market. If you have a long term horizon for your investment strategy, studies have shown that selling and buying to re-balance your portfolio all the time under-performs the market (such as the ASX200).

    One of the best strategies is a contrarian investment strategy. This involves buying as the market is declining and selling as it increases. Buffet actually has a similar strategy. However, you can not do this with index funds.
     
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  3. twisted strategies

    twisted strategies Well-Known Member

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    QLD
    ** One of the best strategies is a contrarian investment strategy. This involves buying as the market is declining and selling as it increases. Buffet actually has a similar strategy. However, you can not do this with index funds. **

    with ETFs buying as the market falls is embarrassing easy , a good ETF has sweepers ( automatically buying or selling at say 3% variance to the NTA ) , the retail investors add to the opportunities. however selling can be a test of patience