Following an exercise switching some of my actively managed funds into passive funds, I said at the end of this post that I wasn’t going to tinker with my portfolio any more.
But that was before I read Tim Hale’s ‘Smarter Investing‘ and created my own ‘Portfolio For All Seasons‘, which will look something like this:
The allocation mix of my portfolio was heavily biased towards UK equity, so I’ve done some rebalancing (switched funds) to start addressing this.
I think I should be pretty close to my target allocations in a few months or so. Still missing investment in the ‘Developed World Value’ section but this should be sorted soon when I start investing in Vanguard World High Dividend ETF (VHYL).
Actively-managed funds now only account for 23% of my portfolio, so I’m more or less in my ‘passive-investing zone’ now!
Although since I ‘actively’ choose which funds to invest in each month, am I truly being a passive investor?
Guidance suggests that portfolios are rebalanced just once or twice a year but since I choose which funds to invest in each month, I appear to be going against the grain in that I’m going to end up rebalancing pretty much every month.
I’m not going to be timing the market or buying whatever fund is flavour of the month, or selling funds to rebalance. I’ll just be buying more of my existing funds to make the numbers match my Portfolio For All Seasons.
For example, this month I’ll be investing more into BlackRock Global Property Securities. Equity Tracker and BlackRock Emerging Markets Equity Tracker to increase their respective allocations (Property and Emerging Markets). Next month, it could be two different funds, or the same again.
Is it possible to rebalance too much?