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 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
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.