Taylor&Williams - personal wealth advisor

This piece on Rebalancing was written back in 2010, but is still an important part of managing investments.  Brent

It is hard to believe that we are in December already.  A year can go by so fast!  As each year ends and a new one starts, it brings with it our process of Rebalancing. 

Rebalancing is the process of bringing portfolios back into line with the desired asset allocation.  Let's say there were four of us playing Monopoly and we each started out with the same amount of money.  After going around the board a few times, that would change.  Some would have more and some would have less.  If we wanted to go back to where we started, we would rebalance by taking some from the players with more giving it to the players with less to where they were all even again.  (There is a political reference that could be made here also, but I will leave that alone for today.)

Since the different mutual funds that we are holding in your account(s) go up and down by different percentages, we are getting ready to do that exact process: sell a little of the funds that went up the most and buy a little of the others. 

Four things for you:

1 - You will be getting transaction confirmations from Schwab for this, a buy or sell for each holding in your account(s).  Since all the funds that we use are no transaction fee funds, there is no cost, commissions, or fees.  It is a free service of Taylor & Williams (actually it is included in the management fee you pay us).

2 - If you know of any cash needs that you will have in the next few months, we would like to prepare for that in this process.  (If you are taking money from your account on a monthly basis, then we already have that incorporated.)

3 - We know these last 2 years have been an investment roller coaster.  If you are at all wondering about the model allocation you are currently in and / or considering changing to a more aggressive or conservative model, we would like to talk about that and potentially make that change now.

4 - We would always encourage you to consider giving to your church or charity of choice.  If you intend to give money to a 501C3 charity and have a taxable account (not an IRA or retirement account), giving appreciated shares instead of cash can be a smart way to avoid some capital gain tax.  Call us if that is something you want to consider.

Feel free to pass this along to anyone you think would benefit.  If we can help anyone that you know with Investment Management or Financial Planning, we would love the opportunity.

Brent Williams