Rebalancing in this correction
rosslake
Posts: 4 Newbie
My investments are in tracker funds, 75% equities, 25% bonds. Equities cover US, Europe, UK, Japan, and Emerging Markets, with a further allocation to High Yield and Small Cap.
In this correction all my allocations are down. Some - particularly EM - are worse than others, but because all are down, none have moved (relatively) far enough to trigger rebalancing. I don't have fresh money to buy in at this time.
Dealing costs are negligible so should I rebalance anyway just to take the opportunity to buy a bit more EM and the other weaker performers, or just accept that this correction doesn't offer any 'sell high/buy low' rebalancing opportunities?
In this correction all my allocations are down. Some - particularly EM - are worse than others, but because all are down, none have moved (relatively) far enough to trigger rebalancing. I don't have fresh money to buy in at this time.
Dealing costs are negligible so should I rebalance anyway just to take the opportunity to buy a bit more EM and the other weaker performers, or just accept that this correction doesn't offer any 'sell high/buy low' rebalancing opportunities?
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Comments
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Problem is if you rebalance it out now you're leaving a market at it's lowest point and buying into a market which may not have reached it's bottom yet. It's a gamble either way.:footie:
Regular savers earn 6% interest (HSBC, First Direct, M&S) Loans cost 2.9% per year (Nationwide) = FREE money. 0 -
Problem is if you rebalance it out now you're leaving a market at it's lowest point and buying into a market which may not have reached it's bottom yet. It's a gamble either way.
How do you know the market is as it's lowest point?Remember the saying: if it looks too good to be true it almost certainly is.0 -
Don`t try and catch a falling knife.0
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I see RBS is trading at 326p today.
The gov sold off a 5.4% stake a few weeks ago at 330p, which at the time were deemed to be too cheap a price and a bargain for their friends in the city.
The public couldn`t buy them at the time.
Probably just as well.
The government has begun its sell-off of shares in part-nationalised lender Royal Bank of Scotland, raising £2.1bn, a third below the price it paid.
It sold a 5.4% stake at 330p a share, a 7.6p discount on Monday's closing price.
Chancellor George Osborne is facing criticism for selling the shares at well below the price of about 500p the then Labour government paid for them.
The 170p difference represents a loss of about £1.07bn on the shares sold.
The government's sale cuts the government's stake in RBS to 73%.
RBS shares closed on Tuesday at 339p, up 1.4p, or 0.4%, valuing the bank at £39.2bn.0 -
How can the market be 'at its lowest point' if it hasn't 'reached it's bottom yet'. ?leaving a market at it's lowest point and buying into a market which may not have reached it's bottom yet.“It is difficult to get a man to understand something, when his salary depends on his not understanding it.” --Upton Sinclair0 -
Don`t try and catch a falling knife.
I think you mis-understand. The OP is not considering putting fresh cash into the market. He states 'I don't have fresh money to buy in at this time.'“It is difficult to get a man to understand something, when his salary depends on his not understanding it.” --Upton Sinclair0 -
The OP already said that the allocations had not gone, relatively, so far out of whack that they met his trigger to rebalance. In other words, the allocations of the total investment amount is fine; there is no point micromanaging a set of broad based funds to highly specific percentages. The allocations are still perfectly reasonable.
As such, if the allocations between funds are already fine, any attempt to sell a bit of one to buy a bit extra if another in the hope that it rebounds further or faster, is a straight gamble.
Markets are volatile at the moment and so it seems fruitless to take that gamble and risk being out of the market for a few hours when all the major markets can move up to a percent or maybe more in the space of a few business hours.0 -
Glen_Clark wrote: »I think you mis-understand. The OP is not considering putting fresh cash into the market. He states 'I don't have fresh money to buy in at this time.'
Thanks. Yes my OP question is about rebalancing.0 -
bowlhead99 wrote: »The OP already said that the allocations had not gone, relatively, so far out of whack that they met his trigger to rebalance. In other words, the allocations of the total investment amount is fine; there is no point micromanaging a set of broad based funds to highly specific percentages. The allocations are still perfectly reasonable.
As such, if the allocations between funds are already fine, any attempt to sell a bit of one to buy a bit extra if another in the hope that it rebounds further or faster, is a straight gamble.
Markets are volatile at the moment and so it seems fruitless to take that gamble and risk being out of the market for a few hours when all the major markets can move up to a percent or maybe more in the space of a few business hours.
Food for thought. Thanks.0
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