We did a quick study on monthly vs. annual rebalancing for the IVY5 asset allocation portfolio.
We did buy and hold and moving average rule variations.
Result: little difference between monthly and annual return rebalances.
Source: http://empiritrage.com/2014/02/03/annual-versus-monthly-rebalanced-asset-allocation-performance/
Why?
Buy and hold weights don’t differ that much from monthly equal-weight rebalanced weights
Let’s recite: activity does not equal value.
Again: activity does not equal value.
And one last time: activity does not equal value.
Okay, I still disagree with that statement because my system 1 refuses to believe it, but whatever…
About the Author: Wesley Gray, PhD
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