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Asset Re-locating

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  • Asset Re-locating

    I have been planning out what my 2017 contributions will look like across all the various accounts (Roth IRA and various tax-deferred). Given my relatively small portfolio, inflows for 2017 will comprise about 45% of my entire portfolio. In order to maintain my desired asset allocation, I will need to adjust current asset locations to account for uneven inflows to the various accounts.

    For example, I will need to sell all TBM & TSM in my Roth to purchase TISM & SCV. Over the course of the year (due to needing to contribute each pay period to get employer match), TBM and TSM will be replenished to my overall target allocation for each.

    My question: is there a good way to do this type of asset relocating? When I was initially figuring out what needed to be sold & bought, I thought I would do all the Roth adjusting now and wait for the employer accounts to catch up over the course of the year. However, doing so would put my asset allocation horrendously out of balance at the start of the year. For example, my TBM & TSM holdings would drop by 2/3 and TISM would be twice my target and SCV would be 1.5x my target.

    In the forum's collective wisdom, would you do this in a step-wise fashion--eg, quarterly? The only downside would be shifting out of Admiral shares into Investor shares and a little more work, but does this approach sound reasonable? Other thoughts?

  • #2
    if it were me i would set it up so that by at the end of the year i had the allocation i wanted based on what i guessed i would be buying.

    if not, then maybe rebalance 1/2 way through the year.

    however, there is no correct answer.

    realize that if your contributions are almost 1/2 of the value, it doesnt even matter what you are invested in as no return you will have will come close to your contribution.