Rebalancing – How the Pros Make More Money Than You

We were honored that Rob Silverblatt at U.S. News & World Report listened to us and rigorously dug deep with us into the powerful secret of event based rebalancing over traditional quarterly or annual rebalancing. He questioned our numbers and assumptions and did a great job describing the issue. Finally someone is helping us make the distinction between “time based” and “event based” rebalancing in the press. To read Rob Silverblatt’s article, click here.

Most retirement investors rebalance via calender alerts on a quarterly basis. This method, however, is trumped by the deeply researched practices of large endowments that rigorously perform event based rebalancing. These large institutions have hundreds of millions if not billions at work in and understand that by setting pre-defined bans by asset class or index, they are able to have thier technology keep a watchful eye on market dynamics and harvest gains at the exact moment the portfolio moves outside of rules for the portfolio. This contrarian discipline allows these endowments and large institutions to add as much as 2% a year to their returns, not including taxes and trading fees.

At MarketRiders, we have created an retirement platform that empowers everyday retirement investor with rebalancing technology enjoyed by wealthy endowments. In our MarketRiders engine, you too can set the rebalancing bands for your retirement portfolio. If it is in a tax free account and you have low brokerage fees, you may go under your dashboard and choose Set Alert Levels to increase your rebalancing sensitivity to a setting of 4 or 5. If you are in a taxable account, we recommend a setting of 3. Whether you are a MarketRiders member or not, what matter most is that you follow the examples of the pros through disciplined event based rebalancing. For more information about this strategy, download our free report by clicking here.