Indexfundfan\’s blog (new URL is Indextown.com)

March 31, 2006

Rebalancing (without tax considerations)

Filed under: Investing — indexfundfan @ 2:18 pm

A recent paper “Rebalancing for Tax-Deferred Accounts: Just Do It, Don’t Worry How” in the FPA Journal discusses 21 different technique of re-balancing and tries to quantify which technique is better. According to the authors, it turns out that,

… given our assumptions, none of the techniques tested here are clearly superior when evaluated solely on the basis of average risk and return. The decision to employ one technique over another should ultimately be driven by how closely you want to adhere to the strategic targets that have been established for your client.

The authors’ conclusion was “Just do it, don’t worry how”.

Advertisements

Leave a Comment »

No comments yet.

RSS feed for comments on this post. TrackBack URI

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Blog at WordPress.com.

%d bloggers like this: