Strategies

Rebalancing (without tax considerations)

A recent paper “Rebalancing for Tax-Deferred Accounts: Just Do It, Don’t Worry How” in the FPA Journal discusses 21 different technique of re-balancing and tries to quantify which technique is better. According to the authors, it turns out that,

… given our assumptions, none of the techniques tested here are clearly superior when evaluated solely on the basis of average risk and return. The decision to employ one technique over another should ultimately be driven by how closely you want to adhere to the strategic targets that have been established for your client.

The authors’ conclusion was “Just do it, don’t worry how”.

Investment guide

Taylor posted (49073) a link to yet another great online book. According to Paul K, author of the online book “Investment Guide“, the book was written to help an investor to

  • Implement the five essentials of investing,
  • Understand and manage risk,
  • Evaluate and select mutual funds,
  • Recognize and control the devastating effects of cost,
  • Develop and write an Investment Policy Statement,
  • Evaluate and choose an Investment Advisor, and
  • Locate a large collection of reference material.