Jack Bogle: 'Never' Rebalance Your Investment Portfolio (and how to do it if you must)

Resources Mentioned in the Video:

Jack Bogle, the founder of Vanguard, argued that one should not rebalance their investment portfolio. He believed that doing so lowered long-term results. In this video we'll understand why he believed rebalancing was unnecessary, along with good reasons to rebalance a portfolio. I'll also cover how I use what's called Opportunistic Rebalancing in my investment portfolio.

#rebalancing #investing #RobBerger

Tools & Resources

Portfolios

ABOUT ME

While still working as a trial attorney in the securities field, I started writing about personal finance and investing In 2007. In 2013 I started the Doughroller Money Podcast, which has been downloaded millions of times. Today I'm the Deputy Editor of Forbes Advisor, managing a growing team of editors and writers that produce content to help readers make the most of their money.

LET'S CONNECT

DISCLAIMER: I am not a financial adviser. These videos are for educational purposes only. Investing of any kind involves risk. Your investment and other financial decisions are solely your responsibility. It is imperative that you conduct your own research and seek professional advice as necessary. I am merely sharing my opinions.

AFFILIATE DISCLOSURE: Some of the links on this channel are affiliate links, meaning at no cost to you I earn a commission if you click through and make a purchase and/or subscribe. However, I only recommend products or services that (1) I believe in and (2) would recommend to my own mom.

[okaydamian]

80% equities 20% cash. I plan to take advantage of the current market situation as leading indicators predict a bullish S&P 500 by 2025, my only concern is how to properly allocate a large stock/bond portfolio for maximum returns.

[thomasmoshier]

Read Jack Bogle’s book on index funds back in the mid 1990’s. Put just 10% of my annual income in index funds and never looked back, never rebalanced. Retired this year with a portfolio of 2 million in my 403b. Thank you Jack Bogle

[mikesurel]

This discussion is why I like what M1 does. Set your target allocation and as you make contributions they are directed toward assets that are below the target percentage. This of course is not helpful once you are no longer contributing, but for those of us still accumulating, it is a huge help if you care about your asset allocation.

[jackjia]

I don't think to rebalance is for more returns. To compare returns, in this case, proves anything at all. Rebalancing is more for risk management. Max drawdown is the real factor we should be looking at. Then, there are different ways to rebalance your portfolio. Unless you retired already, you should save and invest on a regular basis. That is how you want to rebalance. Simply put more money towards the lower parts you want to add.

[martinXY]

I get where Jack is coming from: your buckets will rise and fall naturally, so don't mess with them. Perhaps rather than rebalancing the portfolio, one should rebalance one's monthly contributions so that the bucket that's doing well doesn't become over-weighted. Put more into the one doing not-so-well so you can buy into them at a discount.

[obifox]

I agree with Jack, right into retirement. As far as risk is concerned, do not look at %. Rather, consider how much you need to live on for around 2years, to minimize stock withdrawals when stock market tanks.

[planetag]

I don't have a head for business or numbers, yet I find myself learning from Rob in a way that surprises me.

[edmundpolicarpio]

I just read you book, and gave bought 3 more for my siblings. Such a great book for newbies packed with directions! Right after reading it I was able to create my Vanguard Target-Date fund using my Roth IRA as my employer do not offer 401K. I am also trying to max out my HSA contribution. Appreciate the guidance and can't be more excited for my journey as an investor here in the US. P.S. I am a new immigrant with prior investing experience in the Philippines.

[guharup]

This is a very solid investment channel. Its a pleasure listening to Rob. I was looking for some content on rebalancing for my all stock portfolio and here it is, with backing research and all.

[clsanchez]

I rebalance quarterly, but also keep an eye on things monthly. During COVID, I did a lot of opportunistic rebalancing. The main thing I watch is the Fear-Greed index. As long as the needle stays near the middle, the less opportunity there will be. When the needle swings, I look for which asset class is on sale.

[PH-dmew]

I Have kept a 65/35 portfolio for most of my adult life. When the market crashes (as sooner or later it does) i move 2 to 5 percent into stock index funds at a predetermined rate. Such as stocks down 10 % then 2 percent to the index fund. if down 30 % or more i bump up the 5 % more from bonds into stocks. DId well in 2009 and 2020 and 2022. When mkt bounces back i rebalance back to 65/35. Would love to see a historical study on this method.

[JBSanMarcos]

Thank you so much for this video. I have been running the numbers and was beginning to question the rebalancing strategy myself. It is so good to see I was on the right track! Now - whether I will be able to put most of my retirement savings in bonds and never rebalance, we shall see!

[srourfamily]

in rebalance i made a fortunate / need to check always on opportunities !!!! awesome video

[donmountford]

Jack Bogle and Warren Buffett have been my North stars throughout my saving and investing. Amazing advice always delivered in clear and easy to understand language.

[yr]

Don't rebalance if your investment is super long-term and all around index fund. Otherwise if you started to invest in your late 30s and 40s for your retirement, you definitely should rebalance esp, if you are investing in tech sector asset as of 2024 right now, minimizing risk. Timeframe of investing would indicate that you should rebalance or not.

[davidroberts]

Bogle also said one should (as a rule of thumb) have bond allocation that match one’s age. How does he take both positions without rebalancing? Is it that he changes allocation as he contributes over time?

[frankofva]

I just rewatched your terrific video against the Bucket Strategy. I can’t wait to watch this one. Outstanding!

[tommybahamas]

I love your videos. Leaning a lot from them.

[billvasileff]

Really enjoy and appreciate your videos. Thanks for taking the time to share your experience!

[janethunt]

You are so clear and helpful. Thank you!