Question on adding new money

General Discussion on the Permanent Portfolio Strategy

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senecaaa
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Re: Question on adding new money

Post by senecaaa » Sun Apr 05, 2020 10:07 am

InsuranceGuy wrote:
Thu Apr 02, 2020 1:08 am
Rebalancing during times of high volatility can be very profitable. Down 10% one day so you buy, next day up 10% sell, etc. In times of low volatility it does seem best to let it ride until a rebalance band is hit.

IG
IMHO it's not that simple. "Down 10% one day so you buy" you say. What if it stays flat for a while? You stay out of the market? What if during this period the market goes up 10%? You lose all gains.
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sophie
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Re: Question on adding new money

Post by sophie » Sun Apr 05, 2020 10:18 am

In normal times, you could set up an auto-investment program to contribute to all assets equally.

I did that at first, but switched to adding new money to cash. Then I use that periodically to buy lagging assets. So much simpler and it helps prevent taxable events, because I rarely have to rebalance.
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