Strategic Asset Allocation: Optimizing the Rebalancing Strategy
Interactive

Strategic Asset Allocation: Optimizing the Rebalancing Strategy

Intuition Publishing Pty Ltd
Updated Sep 24, 2020

The optimal portfolio rebalancing strategy maximizes the present value of the net benefit of rebalancing to the investor. The net benefit is simply the benefits from rebalancing minus the costs. We discuss the tradeoff of rebalancing a portfolio after it has suffered portfolio drift and the factors that must be considered before rebalancing.

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