article showed a malfunction excel screenshot....haha
calculation error

where?
which screenshot?
do you mean those displayed formula in Figure 2?

What is 'Rebalancing'

Rebalancing is the process of realigning the weightings of a portfolio of assets. Rebalancing involves periodically buying or selling assets in a portfolio to maintain an original desired level of asset allocation.

Read more: Rebalancing http://www.investopedia.com/terms/r/rebala...p#ixzz4qSq8UfCJ
Follow us: Investopedia on Facebook

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Above is taken from Investopedia. Below is my own 2 cents.

"Rebalancing" is one of the most abused words in this forum.

The other word is "lump sum" when it is used to mean a large sum of money, be it 10k, 20k or 50k or whatever amount that appears large to you. Please get it right... lump sum has nothing to do with 'large amount of money'.

Lump sum as in lump sum payment means a single payment. In lump sum investment, it means a single investment. It is a one-shot investment or a one-time investment.

Now, back to “rebalancing”…

When trimming or moving profits from one portion of the portfolio to another, it can either be described as a 'rebalancing' or a 'restructuring'.

The difference between them is that in a 'rebalancing', the portions are readjusted back to their original ratios. Say, you have a 50/50 equity/bond ratio, and it got out of whack due to high growth on the equity side, then "rebalancing" is adjusting the ratios back to 50/50.

While in 'restructuring', the 50/50 ratio is change to say, 60/40.

Got it? Then read on to see why rebalancing is not often done since it will take time and high lopsided growth on the various segments in the portfolio to make the ratio out of whack.

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If one is keeping track of his portfolio, and knows the percentage of each various segments in the portfolio, rebalancing hardly occurs unless when there are very, very exceptional instances of growth that gets the ratio way out of shape.

Example 1: 50/50 portfolio ratio, with bond/fixed-income/money-market/cash portion having 6% growth, and the equity side (consisting various equity funds) having 14% growth, which gives a total growth of 10%.

The 50/50 equity/bond ratio becomes 51.4%/48.6%. Thus the adjustment is only 1.4% - that is if you are so fussy and meticulous to do the "rebalancing".

Example 2: Original equity/bond ratio change to 30/70, with the same 14% and 6% growth respectively. The ratio becomes 31.5%/68.5%. If rebalancing is needed, then it is an adjustment of 1.5% from 31.5% to 30.0%.

Example 3: Same as in example 1 with 50/50 ratio. Let's give it a total initial investment amount of 10k. This time the profit is trimmed and moved to the bond side. With the same growth rates as in above, the growths in dollar amount are $700 and $300 respectively. The equity/bond amounts increases to $5700 and $5300. After moving the profit out of equity, it becomes $5000 and $6000, giving a ratio of 45.5/54.5.

Hence, in trimming the profits to the bond segment, the ratio is restructured from 50/50 to 45.5/54.5.

In summary:
Sometimes, people say they are rebalancing and/or trimming profits, when they are restructuring the portfolio.

This post has been edited by j.passing.by: Aug 22 2017, 02:58 PM

Please read further in Investopedia... it has further info.

Moving things around is not the only method to do rebalancing. The ratio can be rebalancing by adding in new purchases, ie topping up certain funds. Which, I believed, is what is usually being done by most people/investors in this forum.

So to noobies to UT investments, DCA does not necessary means buying the same fund regularly. DCA means making purchases regularly. Period. It does not have to be the SAME fund. Which is in essence a sort of VA (value averaging) - putting more money into funds that had dropped.

Cheers.

Fully agree with you. Bottom line is that you save and put money into working for you and not spend unnecessary

Hi guys, newbie here. what is Selina , Esther fund?
TA refer to TA TAgolbal technology fund?
Manureit refer to manulife investment Asia Pacific reit fund?

go and read page one, FAQ section....

I don't think what I wrote in the recent posts are anything new... more a rehash of older posts. If you're reading this in desktop version, click the 'show posts by this member only', and read the 1st 10 posts. (You might be LOL at these Feb/Mar posts... )

The 10th post might be of interest to you and other well-paid individuals who are EPF contributors.

Hi all, is FSM malaysia really the best place in terms of lowest price charges to buy UT for Malaysia?

Compared to banks and other platforms,yes.

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i think this would be more appropriate.....

eUT / POEMs / Phillip Mutual Berhad UT discussion, Coz' Fundsupermart not cheapo enuf'!
https://forum.lowyat.net/topic/4268975

https://www.eunittrust.com.my/

Have you get this feeling that your port's number is inching upwards, but you are not sure which UTF in particular is the main contributor.

There is no star performer lately, all the individual UTFs are just doing their job as they should be albeit boringly.

In another word, the port is darn boring to look at, like seeing paint drying on the wall.

Cannot scold anyone coz all are performing "normally"; want to blow water also cannot; want to scold and rant also cannot.

Xuzen

This post has been edited by xuzen: Aug 23 2017, 03:03 PM

Ponzi 1.0 has obviously slided down quite significantly. Switching it to AHSB will be a good choice. Earn credits.

Donno what the fund manager is doing. Asia ex Japan is a vast region. Sleeping or dreaming? Jatuh so much and still haven't move assets while other funds at the same level and category are moving

Fund manager pocketed the best what what what award and can cuti for the year already.

p/s: I think the main constraint is likely the fund is fixed in the mandate. AH has other funds which handle north Asia.

This post has been edited by puchongite: Aug 23 2017, 03:49 PM

Lol because of another fund they limit this one. Pfft then why open a new fund to begin with or why call itself Asia ex Japan. Dreaming.

Ponzi 1?

Algozen™ has not make any BUY call for Ponzi 1 thus far.

Xuzen.

p/s Padan muka...

Some aunties here like it very much.

Kasi muka lah.

A while ago when it was performing, the noise was very loud.

Now very quiet.

Guys I have RM100k to invest. Im totally new to Unit Trust Funds and how FSM operates.

Any sifus give guidance pls.

wow....with such a big amount many had not seen it before.....
may I suggest you read the info at FSM site
https://www.fundsupermart.com.my/main/resea...ng-Started-1583
and then call up CIS for advise....

else you may read these FAQs to have some ideas while you wait for responses....
https://www.fundsupermart.com.my/main/faq/introduction.tpl

,...you may even consider this Managed portfolio
https://www.fundsupermart.com.my/fsm/manage...fo/introduction

This post has been edited by T231H: Aug 23 2017, 08:53 PM


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