Rebalancing a Retirement Portfolio

New Canaan Mens Investment Club

Paul A. Strassmann, January 9, 2017

What to Consider When Rebalancing Portfolio

• Age and Life Expectancy

• What are YTD Portfolio Results?

• Retirement Assets and Current Income

• Current Allocation to Stocks and Bonds

• Domestic vs. International Assets

• Geographic Preferences where to Invest

• Taxable vs. Tax-Exempt Investments

• Economic Sectors Where to Invest

• Credit Quality of Investments

• Market Capitalization Levels

• Tax Efficiency

• Portfolio Risk

• Cash for Contingencies

Variety of Portfolio Managers Available - Morningstar

Vanguard Funds Portfolio Rebalancing Picked for Initial Cut

Rebalancing Based on Current Situation

Age: 87

Life Expectancy: >10 years

Current Portfolio

Current Performance Assessment

What Are Acceptable Risks?

Current Risk Levels

How to. Balance Bonds vs. Stocks?

Choice of Stocks vs. Bonds?

Investor vs. Funds Returns?

What is the Acceptable Balance of International vs. Domestic Markets?

Insufficient International Funds

Fund Allocations are OK

Investment Style OK

Industry Sectors Allocation

Stock Market Portfolio Geographic Markets Allocation OK

Bond Market Portfolio Geographic Markets Allocation OK

Credit Quality of Bond Investments OK

Bond Portfolio Interest Rate Sensitivity Acceptable

Tax Efficiency Calls for 16.9% Tax Exempt Bonds

Rebalancing

Planned Cash Flow

Projected Portfolio Balance for 18 Years

Conclusions

•Quarterly Portfolio Rebalancing is Necessary.

•Demanding Task that Requires a Disciplined Approach.

for Sample of a Rebalancing Method see:

<https://investor.vanguard.com/corporate-portal/>

Strassmann, LLC. is Not an Investment Advisor.

This Example Should not be Used for Making Investment Decisions.