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How to Buy Low and Sell High using Simple Rebalancing Technique?
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How to Buy Low and Sell High using Simple Rebalancing Technique?
Rebalancing is a simple technique of adjusting % of holdings of various asset classes. Rebalancing is not an one time activity and it should be an on-going process. So we need to maintain the allocation by rebalancing at times.
In simple terms, we go to gym to get fit, shed extra weight. Periodically rebalancing your portfolio is a superb way of staying “in shape” financially. It helps you to shed excess holdings of various assets you hold over and above your risk tolerance.
In order to make a profit on any investment, you must buy low and sell high. Both of these, particularly the former, are extraordinarily difficult to do.
Buying low means doing so when the asset has been falling rapidly with poorer recent returns than other asset classes, generally accompanied by negative commentary from the experts. This is as it should be—you don’t get low prices any other way. Rebalancing in this period will help you to buy low.
Selling high means just the opposite. The asset has had high recent returns and is outperforming other investments; it is the general consensus that it is the “wave of the future.” This is also as it should be—you don’t get very high prices in any other way. Rebalancing in this period will help you to sell high.
Rebalancing is simple technique which forces you to buy low and sell high. It takes many years and many cycles of rebalancing before you realize that it is a profitable activity.
Another way of putting this is that rebalancing forces you to be a contrarian—someone who does the opposite of what everyone else is doing.
How Often you should rebalance?
The question of how often to rebalance is one of the common ones in investing. Most people go for quarterly or half-yearly rebalancing, which is too frequent. I would say, once in a year or even 2 years is fine. Other option is to go for tactical asset allocation. With tactical asset allocation, we can rebalance If any asset class deviates the asset allocation by certain %. But please do consider taxation in mind while rebalancing. If it is done properly by combining it with tax harvesting, we can in fact reduce the taxes greatly.
To watch all the episodes of Investment Series, visit:
To keep all these simple, we used our “Investment Alerts” telegram channel. We just followed the alerts triggered in the channel to go and invest on the go. There was no need to any manual calculations or waiting. We will just blindly follow whatever that’s mentioned in the Alerts triggered.
As per the request of subscribers, we have created a separate channel for generating automated alerts for investments. Please use the below link to join InvestmentAlerts Channel in Telegram.
When the market was crashing in Jan-March 2020, we have released a video on how to invest during market crash and it worked beautifully. Though we couldn’t invest all the cash we have saved for investing in crash, the amount we invested using the strategy have really boosted the portfolio.
One year later, market is hitting record highs everyday and I was flooded with questions on how to invest in this raising market. So I have shared a video on personal investment approach for this scenario as well..
How to invest when market hist new lifetime high everyday?
Our 3 year old video on impending stock market crash of 2019-2020:
Also, if you want to have quick check on these Nifty levels and how much market has fallen from the peek, you can check our website. It has a live feed.
InvestmentAlerts Channel will generate automatic alerts based on my investment strategy explained in these videos and sends reminder whenever the investment opportunity is available. Also, the message will include how much i should invest as well.
Check Out our Script Library to get ready-to-use Algo-Trading Scripts:
To watch all the episodes of Algo-Trading Series using PineScript, watch:
To watch our Amibroker Algo-Trading Series, use the below link:
To watch our Price Action Series from the start, use the below link:
To watch our Trading Strategies Series, use the below link:
To Learn more about Trading and Investing, visit our website.
For daily market updates, join our Telegram Channel:
Rebalancing is a simple technique of adjusting % of holdings of various asset classes. Rebalancing is not an one time activity and it should be an on-going process. So we need to maintain the allocation by rebalancing at times.
In simple terms, we go to gym to get fit, shed extra weight. Periodically rebalancing your portfolio is a superb way of staying “in shape” financially. It helps you to shed excess holdings of various assets you hold over and above your risk tolerance.
In order to make a profit on any investment, you must buy low and sell high. Both of these, particularly the former, are extraordinarily difficult to do.
Buying low means doing so when the asset has been falling rapidly with poorer recent returns than other asset classes, generally accompanied by negative commentary from the experts. This is as it should be—you don’t get low prices any other way. Rebalancing in this period will help you to buy low.
Selling high means just the opposite. The asset has had high recent returns and is outperforming other investments; it is the general consensus that it is the “wave of the future.” This is also as it should be—you don’t get very high prices in any other way. Rebalancing in this period will help you to sell high.
Rebalancing is simple technique which forces you to buy low and sell high. It takes many years and many cycles of rebalancing before you realize that it is a profitable activity.
Another way of putting this is that rebalancing forces you to be a contrarian—someone who does the opposite of what everyone else is doing.
How Often you should rebalance?
The question of how often to rebalance is one of the common ones in investing. Most people go for quarterly or half-yearly rebalancing, which is too frequent. I would say, once in a year or even 2 years is fine. Other option is to go for tactical asset allocation. With tactical asset allocation, we can rebalance If any asset class deviates the asset allocation by certain %. But please do consider taxation in mind while rebalancing. If it is done properly by combining it with tax harvesting, we can in fact reduce the taxes greatly.
To watch all the episodes of Investment Series, visit:
To keep all these simple, we used our “Investment Alerts” telegram channel. We just followed the alerts triggered in the channel to go and invest on the go. There was no need to any manual calculations or waiting. We will just blindly follow whatever that’s mentioned in the Alerts triggered.
As per the request of subscribers, we have created a separate channel for generating automated alerts for investments. Please use the below link to join InvestmentAlerts Channel in Telegram.
When the market was crashing in Jan-March 2020, we have released a video on how to invest during market crash and it worked beautifully. Though we couldn’t invest all the cash we have saved for investing in crash, the amount we invested using the strategy have really boosted the portfolio.
One year later, market is hitting record highs everyday and I was flooded with questions on how to invest in this raising market. So I have shared a video on personal investment approach for this scenario as well..
How to invest when market hist new lifetime high everyday?
Our 3 year old video on impending stock market crash of 2019-2020:
Also, if you want to have quick check on these Nifty levels and how much market has fallen from the peek, you can check our website. It has a live feed.
InvestmentAlerts Channel will generate automatic alerts based on my investment strategy explained in these videos and sends reminder whenever the investment opportunity is available. Also, the message will include how much i should invest as well.
Check Out our Script Library to get ready-to-use Algo-Trading Scripts:
To watch all the episodes of Algo-Trading Series using PineScript, watch:
To watch our Amibroker Algo-Trading Series, use the below link:
To watch our Price Action Series from the start, use the below link:
To watch our Trading Strategies Series, use the below link:
To Learn more about Trading and Investing, visit our website.
For daily market updates, join our Telegram Channel:
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