{"id":131675,"date":"2025-03-13T23:00:32","date_gmt":"2025-03-13T23:00:32","guid":{"rendered":"https:\/\/peraltafinancing.com\/business\/investing\/rebalancing-asset-allocation-portfolios-12-march-2025\/"},"modified":"2025-03-13T23:00:32","modified_gmt":"2025-03-13T23:00:32","slug":"rebalancing-asset-allocation-portfolios-12-march-2025","status":"publish","type":"post","link":"https:\/\/fivemor.com\/?p=131675","title":{"rendered":"Rebalancing Asset Allocation Portfolios: 12 March 2025"},"content":{"rendered":"


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\"Rebalancing<\/p>\n

Service in China<\/em><\/p>\n<\/div>\n

If you are managing an Asset Allocation (AA) portfolio this blog is for you as I am going through the rebalancing process when managing an AA portfolio.\u00a0 If you are not completely sure what an AA portfolio looks like follow portfolios such as the Gauss, Millikan, Einstein, Bethe, Bohr, etc.\u00a0 In this blog post I am using the Millikan portfolio as the example for several reasons.\u00a0 I recently expanded the number of asset classes so several contain no holdings.\u00a0 How to handle these in the future is part of the analysis I\u2019ll go through in this rebalancing update.<\/p>\n

Millikan Asset Allocation Example<\/strong><\/p>\n

Below is the latest asset allocation for the Millikan portfolio.\u00a0 I added mid-and small-cap equities (VO & VB) plus emerging markets (VWO).\u00a0 This gives the owner nine asset classes with a stock\/bond ratio of 70%\/30%.\u00a0 For some investors this might be a tad aggressive, but this owner is willing to take on the added potential risk.\u00a0 70\/30 is not far off the basic 60\/40 ratio.<\/p>\n

\"Rebalancing<\/p>\n

Millikan Strategic Settings<\/strong><\/p>\n

It has been many weeks since I posted this particular worksheet from the Kipling spreadsheet.\u00a0 Note that I am using the BHS investing model.\u00a0 With the market down, this model is quicker to respond to a potential rebound.\u00a0 It may take weeks, months, or even a few years to get back to normal, but the hope is this will eventually happen.<\/p>\n

Also pay attention to the LRS1 and LRS2 periods.\u00a0 I think these are the percentages that came out of a research projects a few years ago.\u00a0 The current beta is very low and the suggested one is extremely conservative.<\/p>\n

With these settings the Kipling spreadsheet identifies VEA, VNQ, BND, TLT, and SHV as a Buy.<\/p>\n

\"Rebalancing<\/p>\n

Millikan Rebalancing Strategy<\/strong><\/p>\n

Now we get to the crux of the rebalancing process.\u00a0 Here are the general rules for rebalancing Asset Allocation portfolios.<\/p>\n