rebalancing hour

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  • #79657
    Andrix88
    Participant

    What time do you rebalance portfolio on 1st trading day of the month? Is it better to do it at the beginning or at the end of the trading day? I’m also asking it because I saw many companies pay dividends in the first days and so the price will be affected.
    I don’t know if it’s a silly question, but the dividend matter is not very clear to me yet.

    #79667
    Robert Janson
    Participant

    I also would like to know the answer to this? Is it best to sell all positions at the close on last day off the month and put limit orders to buy. This is an important issue and also for me personally no problem wuth leveraged ETFs but it is ironic to be in a conservative portfolio when firms such as Vanguard prohibit sales of levered products. Also, there seems to be a huge difference of the new conservative portfolio performance historically vs. previous model. I think some commentary explaining the new models and benefits of the new models would be in order.

    #79676
    Vangelis
    Keymaster

    Some subscribers trade on the last day of the month, some on the first, I myself sometimes trade on the second.

    There is no rule as to when to trade. If there was one, it would defeat the purpose as everyone, at least from LI, would crowd the trade. In our experience it is best to at least wait 30 minutes after NYSE opens so that the market stabilises if there was news or similar events that creates volatility. Our advice is to pick a date and time that suits your own work and family schedule and then stick to that.

    As for dividends I am not aware of that. I am sure there are strategies out there detailing how to capture dividends or avoid them and trade the price instead.

    #79677
    Vangelis
    Keymaster

    Thank you for the feedback Robert. I think many subscribers agree with you in that we do need to further discuss these Core portfolios changes.

    #79678
    Robert Janson
    Participant

    Thanks look forward to your replies. Perhaps there can be levered and un-levered versions of the core and can see that might work for everyone. I like the levered positions as they can enhance returns if managed properly and are kept to relatively small positions.

    #79681
    Robert Janson
    Participant

    One more comment and thought on the subject. Since the core portfolios no longer hold individual stocks, why not simply do (for all the core) what already exists for the moderate core, provide an option of individual ETFs non levered?

    #79700
    Alexander Horn
    Keymaster

    Hi Robert,

    thanks for the feedback, we are just analysing the pro’s and con’s of the different approaches. I want to highlight again that the default portfolios are thought as a starting point for building your own personalized portfolio. You can do so by clicking on the “pencil” icon on any portfolio detail view (example Aggressive Portfolio), or by using our Portfolio Builder or Portfolio Optimizer.

    In theory we could publish many additional versions of each of the “pre-canned” portfolios, but feel this might rather make it harder to select. So we think the better approach is to let user pick a “close-to-perfect” portfolio, and then fine-tune it with the tools we offer.

    #79707
    Robert Janson
    Participant

    The issue is with those that are only accessing the core portfolios and do not have access to the other portfolio and tools. On top if they are a Vanguard customer they can not use levered products. I am speaking for others as none of this applies to me. I have a friend that just subscribed to the basic core and is a Vanguard customer. What can he do?

    #79721
    Andrix88
    Participant

    I was asking about dividends because I was wondering if it’s better to wait until all etfs in the portfolio have paid dividends and then rebalance the portfolio or it doesn’t matter. What do you suggest?

    #79724

    It makes no difference as dividends are always anticipated in the stock or ETF price. If this would not be the case, then you could buy a stock one day before dividend payment and sell it one day later with a big profit.

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