Advanced Analysis
Advanced Portfolio Rebalancing: Beyond Traditional Allocation Models
Most investors stick to calendar-based rebalancing, but research from behavioral finance suggests this approach misses critical market inefficiencies. After analyzing 15 years of portfolio data across different rebalancing methodologies, we've identified three sophisticated techniques that consistently outperformed traditional quarterly adjustments.
The threshold-plus-time method, for instance, combines percentage deviation triggers with minimum time intervals. When we tested this approach against standard 60/40 portfolios from 2010-2024, the results were remarkable—not because of higher returns, but because of significantly reduced volatility during market transitions.