Selling high and buying low
It's six months since my last SIPP rebalancing exercise. In my SIPP I attempt to keep an equal balance of the following five asset classes:
So, the approach is simple: every six months I have a look and see how the different asset classes have performed. If they are out of balance I either buy the least valued asset class with cash that is in the SIPP, or I sell some of the asset class(es) that have performed the best and use that cash to buy some of what has done least well.
The good thing about this is that there is no market timing involved, and I do not have to worry about what to buy. This process makes me 'buy low' and 'sell high', which is the opposite of what I intuitively wish to do.
This time, the asset class that has done least well in my account is 'emerging markets'. So next week I will use some of the cash in the SIPP to buy an ETF that invests in Emerging Markets. Which one will I buy? Members of my trading website will know exactly which one it is!
Are you interested in trading? I run three trading portfolios: a daily trading portfolio, a weekly trading portfolio, and a rebalancing portfolio (which I am discussing today). Members of my website know how I trade each portfolio, and what I invest in, when I invest in it and when I sell it. It's simple stuff, but many people find this tricky! Consider joining my trading club for a modest fee each month and following exactly what I get up to!
Have a great week!
- Shares in developed countries
- Shares in emerging markets
- Bonds
- Property
- Commodities
So, the approach is simple: every six months I have a look and see how the different asset classes have performed. If they are out of balance I either buy the least valued asset class with cash that is in the SIPP, or I sell some of the asset class(es) that have performed the best and use that cash to buy some of what has done least well.
The good thing about this is that there is no market timing involved, and I do not have to worry about what to buy. This process makes me 'buy low' and 'sell high', which is the opposite of what I intuitively wish to do.
This time, the asset class that has done least well in my account is 'emerging markets'. So next week I will use some of the cash in the SIPP to buy an ETF that invests in Emerging Markets. Which one will I buy? Members of my trading website will know exactly which one it is!
Are you interested in trading? I run three trading portfolios: a daily trading portfolio, a weekly trading portfolio, and a rebalancing portfolio (which I am discussing today). Members of my website know how I trade each portfolio, and what I invest in, when I invest in it and when I sell it. It's simple stuff, but many people find this tricky! Consider joining my trading club for a modest fee each month and following exactly what I get up to!
Have a great week!
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