Forget tax and exit loads, this is why your portfolio should be rebalanced each year

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

How much equity should I hold in my portfolio?

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?

Why we need to gradually pull out of equity investments well before we need the money!

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!

Do we need to time the market?

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?

How to Quickly Decide: Should I stay invested or exit my mutual fund?

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?