Portfolio rebalancing refers to resetting your asset allocation (equity: fixed income ratio) from time to time - typically once a year - to lower risk in your portfolio. In this post, I show backtesting results and discuss exactly how much is the risk reduction and in spite of tax and exit loads, it is totally … Continue reading Forget tax and exit loads, this is why your portfolio should be rebalanced each year
A few days ago, I gave a talk at a CFA Society meeting. One of the modules is covered in this post: How much equity should I hold in my portfolio? We know that equity has the potential offer better returns than fixed income (emphasis on potential) but how much equity - either as direct equity … Continue reading How much equity should I hold in my portfolio?
We all invest with the hope of having enough money for our future needs. This is true for even those who claim they do not have a goal - they just don't know it yet. A good amount of equity exposure is important to beat inflation for long-term (10Y+) goals. However, many people make the … Continue reading Why we need to gradually pull out of equity investments well before we need the money!
For a while now, I have been wanting to do a full back-test of multiple market timing or tactical asset allocation strategies. I used a speaking invitation as an excuse to create a spreadsheet where multiple models can be quickly tested with 1000s of time periods. While at it, I asked myself, do we need to … Continue reading Do we need to time the market?
Resolve is a series of steps on investing and portfolio management. In the first step, we considered how to quickly select equity mutual funds and build a diversified (equity) portfolio. As a second step, we will consider how to quickly decide if I should stay invested in a mutual fund or exit it. To be frank, the … Continue reading How to Quickly Decide: Should I stay invested or exit my mutual fund?