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|Subject: Rebalancing||Date: 7/30/2012 6:42 PM|
|Author: mrgoo||Number: 39193 of 39231|
I practice a different version of rebalancing. Instead of taking a chunk of cash and investing it evenly over five different funds lets say you put 10 grand into each of the following funds: Vanguard Inflation-Protected Securities Fund (VIPSX), Vanguard REIT Index Fund Admiral Shares (VGSLX), Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX), Vanguard Total International Stock Index Fund Admiral Shares (VTIAX), Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX).
After a year you want to invest another 25 grand and want to get all funds back to 20% each. So you will be putting in more money into the “dogs” and less money in ones that have done well in the last year. You repeat this approach each year during your investing year in hopes of building an after tax portfolio.
My question are you really realizing the benefit of “gaining from the winners” over time since you are not selling or is this just a version of dollar cost averaging?
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