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I don't follow the Coffeehouse Portfolio but I do have an Asset Allocation plan with annual rebalancing.

I do aim back to balance by directing new contributions. In taxable accounts, that minimizes the tax impacts. Or if there are any trading fees or sales commissions, this would help keep them down.

If it is way out of balance on the annual rebalancing date (for me, around March) in my tax-favored account I will move money around to bring it closer to balance. However, if it is reasonably close (say within a couple months contributions to bring it back to balance), I won't rebalance but just direct new contributions.

I have been using just the percentages of the values of my investments to determine where to put new money or how much to move where to rebalance--I haven't looked at "expensive" vs. "cheap" when it comes to rebalancing; what may seem "expensive" might in the future prove to be inexpensive.
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