Index investors - how often do you review & rebalance

Are there people who are 100% index (like ETF) investors? How frequently do you rebalance? What is the best way to stay on top of when to rebalance?

 

When you say 100% index, do you mean investing in different index funds such as a bond index, asx200 index, ppty index? Then re-balancing really depends on your individual risk appetite. If you are after high growth, then you would over-weight riskier indexes such as international shares or emerging market's. Conversely, you would do the opposite if you were risk adverse.

Re-balancing; this is really a subjective tactic that involves 'timing' the market. Its all about timing and not many investors can perfectly time a market. Knowing when a bubble is going to burst or if we are truly in a bull or bear market. If you have a long term horizon for your investment strategy, studies have shown that selling and buying to re-balance your portfolio all the time under-performs the market (such as the ASX200).

One of the best strategies is a contrarian investment strategy. This involves buying as the market is declining and selling as it increases. Buffet actually has a similar strategy. However, you can not do this with index funds.

 

** One of the best strategies is a contrarian investment strategy. This involves buying as the market is declining and selling as it increases. Buffet actually has a similar strategy. However, you can not do this with index funds. **

with ETFs buying as the market falls is embarrassing easy , a good ETF has sweepers ( automatically buying or selling at say 3% variance to the NTA ) , the retail investors add to the opportunities. however selling can be a test of patience