QVM Group

Vanguard's Jack Bogle on Rebalancing: Don't!

Sure would like to see more studies with different asset classes, different rebalancing time frames or different allocation deviation rebalancing points, in taxable, tax deferred and tax exempt accounts. This is such an important question about such a widely praticed institutional methodology. Articles of faith in the method should be validated or disproved by statistical studies.

One thing Mr. Bogle did not talk about is volatility in rebalanced and not-rebalanced accounts. That should be studied at the same time as return.

There must be a professor out there somewhere with the time, skills and grant money to do a top notch study of the question. Perhaps good comprehensive work is out there now that someone knows about that could be referenced in a reply to this article.

In any event, a worthy topic for investment community discussion.