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+--- Thread: Rebalancing question of sorts (/showthread.php?tid=814)
Rebalancing question of sorts - Robandcindy2 - 12-27-2014
After the plunge in energy stock prices I have a lot of red in the portfolïo in our energy sector.
When things were "normal" months ago I could make the argument that I have invested the appropriate amount of our portfolio in this sector. Now with the price drop I'm wondering if I want to rebalance or even add new money to bring this sector back up to the percentage I had allocated.
Of course when it recovers I will then be way over our allocation...hence the delemna.
Any thoughts either way?
Hope you all have a happy and prosperous 2015!
RE: Rebalancing question of sorts - CritMass - 12-27-2014
I think your two viable options are to either add new money while prices are low, or simply do nothing. Sorry, but this is the most wisdom I can summon at this time.
RE: Rebalancing question of sorts - DividendDragon - 12-27-2014
Add now and rebalance later. If you feel a company is undervalued hit the buy button and rebalance later
RE: Rebalancing question of sorts - hendi_alex - 12-27-2014
I would add to the depressed sector but would do so very patiently. I'm expecting new lows in the first half of the year, as the effect of weak prices hits the bottom line in quarterly reports. I've harvested some of my gains, moving the money back to cash which will be redeployed when prices cooperate. I'm expecting that to be during May or June.
RE: Rebalancing question of sorts - Jimbo - 12-27-2014
I would echo Lewys, it is a good time to get into more of the energy for the price and the appreciation.
That being said, it could take some time for those to rebound but with a nice dividend not a bad choice either.
I know I am against the grain but I like the old saying, why take a race horse leg off of its still runnin hard (or something like that).
I dont keep a perfectly balanced port at this time, maybe later.
Good luck either way.
RE: Rebalancing question of sorts - daat99 - 12-28-2014
Personally I'm not a strong believer of forced re-balancing by selling stocks (mainly because it forces me to sell a stock when it didn't cut the dividends).
Based on my belief I decided to balance my portfolio only by added new cash into it.
In your situation (and in mine actually) I would just buy the cheaper energy stocks now with new funds.
When they will recover and get over weighted I'll simply buy the other sectors with more funds.
RE: Rebalancing question of sorts - Robandcindy2 - 12-29-2014
Thank you all!
And this morning, right on cue, Tim McAleenan, Jr. chimed in with his latest blog entry:
Want To Rebalance A Portfolio? Use Cash, Cash, Cash
http://theconservativeincomeinvestor.com/2014/12/29/want-to-rebalance-a-portfolio-use-cash-cash-cash/
Cheers!
RE: Rebalancing question of sorts - cannew - 01-27-2015
Basic DG strategy: Avoid Cyclical stocks!