Blogs & Comment

Rebalance every (15000/V)^1/3 years

Here is a fun piece on rebalancing if you are a mathematician. And maybe some of the mathematicians out there can tell us what exactly Professor Frank Morgan is proposing–if it is sensible and/or practical!
Interestingly, he ties the frequency of rebalancing to the size of ones portfolio and transactions costs. In its simple form, his formula saysan amateur investor with capital V should rebalance holdings every (15000/V)^1/3 years.” For example, someone with $15,000, should rebalance annually, someone with $15 million should rebalance monthly, and someone with $15 billion, should do it every few days.