rebalancing portfolio - customized investment planning

Rebalance Your PortfolioLearn hidden costs of

rebalancing your portfolio

http://www.advice4less.com

http://www.advice4less.com/

Rebalancing Your Portfolio

Rebalancing is a technique that every financial advisor boasts as an added value of their services; but is it?

Call: 800-990-3460 http://www.advice4less.com



First you have to realize that like anything it costs you money. Every time your portfolio is rebalanced their is a trade, you sell a stock, mutual fund, or exchange traded fund and every time there is a trade there is a cost; whether the cost is borne by you or your advisor it still has a cost ultimately to you. Nothing is free.




Then, there are taxes, a whole other rats nest of issues except in IRA’s (individual retirement accounts) or 401(k)s.




Secondly, rebalancing relies on a rebranded version of market timing. Think about it, when is the best time to sell your stocks, and then buy an asset class (say bonds) that have lagged? Nobody really knows this for sure. Add to this that most advisors, brokers and firms, (especially annuity companies), just do it on an automated basis with no real intelligent data or human interaction.


If you look at the graph on the next page you can see that it is hit and miss, and if you net the true cost of placing a trade and what your advisor charges you it seems a moot point.



For example the best upside to rebalancing seems to be, so far anyway, 1926-1961 for a whopping 1/2 percent. If you had 5 positions in your portfolio you would have rebalanced a minimum of once or as much as 12 times (monthly versus annual). Can you imagine the cost of 60 trades a year?

If you pay for your trades it is negative result; if you pay one percent (1%) or more to your advisor/broker even without trades it is a negative result.




So what isthe answer?




Certainly it is prudent to not have all your eggs in one basket. But does it really make sense in this environment to sell winners to buy losers, especially bonds in 2015? Or International stocks?

No; it makes more sense to be intuitive and rebalance intelligently. To assess each asset class in a portfolio on it’s own merit based on the underlying economics.

To move monies from an asset class when the signs are clear and evident that the party is over.




Contact Us Today for Consultation


Pro Wealth Advisors LLC14327 Tuscany Pointe TrailNaples FL 34120Phone: 1-800-990-3460

General Information: [email protected] Service: [email protected] Keller: [email protected] Keller: [email protected]


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rebalancing portfolio - customized investment planning

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