We are usually quite proud of ourselves when we manage to save money on our purchases whether buying something on sale or using a coupon. Contrarily, we get a bit outraged when we receive a penalty fee from a company we are using for needed services. Why is it that we don’t apply this mentality to our investment portfolios?
Rebalancing a portfolio requires effort to determine the optimum methodology for rebalancing. It also involves trading costs and potential tax costs. This short story explores the history of rebalancing and then determines if rebalancing is really worth it for the average investor.