Rebalancing

Because markets and asset classes rise and fall, avoiding a drift over time from asset allocation targets is important to the investment plan. Disciplined, systematic portfolio monitoring and rebalancing helps to maintain the initially targeted risk and diversification guidelines.

While disciplined rebalancing provides no guarantees of improved returns over time, it does instill an inherent bias towards buying assets that have fallen in price and selling those that have appreciated – a buy low, sell high strategy.

We regularly monitor client portfolios and rebalance when asset class weights drift meaningfully away from targeted allocations.

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“A very low-cost index fund is going to beat a majority of professionally-managed money. The gross performance [of actively managed money] may be reasonably decent, but fees will eat up a significant percentage of the returns.”

Warren Buffet, Berkshire Hathaway

2007 Shareholders Meeting

“All the time and effort that people devote to picking the right fund, the hot hand, the great manager, have in most cases led to no advantage.”

Peter Lynch, former Fidelity Magellan Fund Manager

Beating the Street, 1993

"The industry as a whole cannot outperform the market because they are the market, and long-term statistics revealing negative returns for the class of active managers confirms it. Yet, what a price investors are willing to pay!"

Bill Gross, PIMCO Co-founder

Former Manager of World's Largest Bond Fund