← Back to The Ledger

Rebalancing: Calendar vs. Threshold

Both work. Picking one and sticking to it beats agonizing over the choice.

Calendar rebalancing on a fixed date (your birthday works) requires no thought and benefits from forced contrarianism. Threshold rebalancing (when an allocation drifts 5+ percentage points) is more tax-efficient but requires monitoring.

Either is dramatically better than 'whenever I feel like it,' which in practice means 'after the drawdown, when it hurts most.'