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  • Writer's pictureZach

Quarter 2 Rebalancing: The Simplification

Updated: Feb 22, 2019

It's time. Time for simplicity. Having re-read the classic JL Collins book, "The Simple Path To Wealth" for my Millionaire Teachers Club, I decided it's time to clean up my portfolio. The problem was too many ideas. I have 3 bond funds and a Target Date Retirement fund, along with my VTI, ARKW, and my REIT, NRO. That will be reduced to 1 bond fund, VTI, ARKW, and NRO. Two of the three bond funds will be sold off, and the proceeds will go to BND. The Target Date Retirement Fund, VTIVX, will also be closed out and the proceeds will be split amongst VTI and BND.

The angel on my shoulder tells me to sell ARKW as well, just because I know that over the long run, odds are that it will not help my returns. The problem is that right now it's up 29% year to date, considerably more than VTI, at 14%. So it's a bit of a gamble, and it could end up biting me in the butt. I do believe that the focus of this fund, cutting edge technology companies along with the FANGs, is where most wealth will be generated in the coming decades, so it makes sense that it will be a strong investment, and it's still a fund, so there's a diverse array of companies and sectors in it. It stays, for now.

I'm keeping NRO also, as I just started my REIT experiment, and it just gave me my first dividend. I'm keeping it at least a year.

So, how did I rebalance? I followed my own advice from two quarters ago, and used Millennial Revolution's Rebalancing calculator. It was super easy to use! Basically, you just put how much you own of each thing, and what your target percentages are, and how much cash you're using to re-balance, which you set to 0% for target allocation. It automatically tells you how much you should buy of each stock! WAY simpler than the trial and error of two quarters ago. It even gives you handy dandy charts! I do love my handy dandy charts.

I'm keeping my 80/20 stock bond balance, and not taking the REIT into account, because it would mess with that experiment. It'll be a simpler 80/20, and that sounds great to me!

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Disclaimer: The views expressed is provided as a general source of information only and should not be considered to be personal investment advice or solicitation to buy or sell securities. Investors considering any investment should consult with their investment advisor to ensure that it is suitable for the investor’s circumstances and risk tolerance before making any investment decisions. The information contained in this blog was obtained from sources believe to be reliable, however, we cannot represent that it is accurate or complete.

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