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Right now, sitting in my inbox, are about a hundred emails all asking the same question:
How do you calculate how to rebalance your portfolio?
And I will freely admit, I haven’t been the best at answering this question. For the longest time, we’ve been calculating our buy orders manually using my trusty calculator, with the intention of eventually putting it all into a spreadsheet that other people can use.
Well, I finally got off my lazy ass and did it!
OK so here’s how it works. The Rebalancer is a simple Excel spreadsheet. When you open it, you may get the following warning:
This is normal, just click “Enable macros.” I have some simple VBA code in there that makes sure the PivotCharts get updated whenever you make any changes.
When we open up our spreadsheet, in the Main tab you see this.
This is where you input your portfolio information.
Once you do that, the Rebalancer figures out what your current portfolio allocation is, what it needs to be, and the buy/sell orders required to get you back on track. I’ve actually been using this tool behind the scenes for the last few weeks to figure out our bi-weekly Workshop Portfolio buys, but now you can play with it too!
Let’s give it a go, shall we?
For our Canadian portfolio, we start by putting our ETFs into the Rebalancer. Any cash you have, put the number of dollars you have in the last row.
Once you do this, the other tabs update which contain charts that tell you stuff about your portfolio. The first tab “Current Allocation” is what our current portfolio looks like…
The second tab “Target Allocation” is what we want it to look like…
And the last tab “Model vs Reality” is how far each asset is from target…
So in order to get there, our Rebalancer sheet tells us what to do on the main page…
And after rebalancing, our portfolio will look like this…
And on the American side, we start by putting our portfolio into the Rebalancer’s main tab…
On the “Current Allocation” tab, we can see what what our current portfolio allocation looks like…
And this is what we want it to look like…
So in order to rebalance, our Rebalancer tells what we need to do on the Main tab…
And that’s it!
And we’re done! So that’s the Rebalancing calculator you guys/gals have been asking for. Give it a whirl, and let me know if you run into any problems in the comments, or over email.
Oh and one more thing. When you download the spreadsheet, it’s in “Protected” mode, meaning you can’t see any of the formulas and a lot of the columns are hidden, but if you go to Review -> Unprotect Sheet, you can unlock and see everything in the very likely chance you’re an Excel geek.
That’s it! Peace out!
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Disclaimer: The views expressed is provided as a general source of information only and should not be considered to be personal investment advice or solicitation to buy or sell securities. Investors considering any investment should consult with their investment advisor to ensure that it is suitable for the investor’s circumstances and risk tolerance before making any investment decisions. The information contained in this blog was obtained from sources believe to be reliable, however, we cannot represent that it is accurate or complete.