How often should you rebalance your 401(k)?

Answer 1

You don't want to obsess about it (after all, you have a life to live), but I would recommend at least twice a year.

Rather than go through the whole, buying and selling routine, it may be easier to just rebalance with new money. For example, if your bond allocation is below where you want it then direct the 401(k) to put all new contributions to your bond fund, then go back and check a few months later.

This has the advantage that you are probably buying the asset which is out of favor right now (that's why it was low). So you can buy it cheap.

If shoes are on sale, you probably go out and buy shoes. The same thing applies to stocks and bonds. Buy the ones that are on sale.

Answer 2

If there's no cost to rebalance, then twice a year is more than enough. Unless the stock market moves 15%, then I *might* rebalance early. I rebalance with things are out more than 5% from my goal proportions.

If you think you need to do it 3 or 4 times a year, then your portfolio is too sensitive to market moves, or you just like to mess around with the numbers.

Answer 3

A yearly checkup is all you need. Some 401K's also have funds that adjust automatically based on the year you expect to retire. That would be my recommendation.

Answer 4

I would check it periodically cuz the stock is changing constantly. I changed mine last week to a more conservative approach till the market stabilizes

Answer 5

I have mine setup to automatically re-balance every 3 months. Once a year I decide how I want it balanced.

Answer 6

every year to make sure your asset allocation isnt out of whack