Rebalancing, Overvaluation, Market Timing, and Stock Splits

Money For the Rest of Us

J. David Stein

Investing, Investing Podcast, Business, Economics, Economy

4.5 • 1.4K Ratings

🗓️ 15 August 2018

⏱️ 42 minutes

🔗️ Recording | iTunes | RSS

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Summary

#217 Which rebalancing strategy is best or should we even bother rebalancing? Should we just exit stocks completely, especially given how overvalued the U.S. stock market it is? And why do companies split their stocks? In this episode, we answer these and other listener questions.

For show notes and more information on this episode click here.

[0:30] Why this episode of Money For the Rest of Us is a bit different than previous ones
[2:15] Is rebalancing your portfolio really necessary?
[12:43] Can you use valuations for timing the market?
[23:17] Is it possible to use exiting stocks as a way to increase revenue?
[33:39] The idea behind doing investing on a sector neutral basis rather than a capitalization weighted basis.
[36:20] What factors do companies consider when doing stock splits?

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Transcript

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0:00.0	Welcome to Money for the rest of us. This is a personal finance show. It's on money, how it works, how to invest it, how to live without worrying about it.
0:07.5	I'm your host, David Stein today's episode 217. It's titled Rebalancing,
0:12.1	overvaluation, market timing, and stock splits.
0:16.0	A number of different topics today based on listener questions.
0:21.0	It's an unusual episode. I typically prep two to four hours on Mondays for the
0:28.2	podcast I record on Tuesdays. I maybe do another two to three hours of prep work prior to recording but not this
0:37.2	week this week I spent Monday in Yellowstone National Park we took day trip, left at 8 in the morning, got back
0:45.6	after midnight, had some friends in town, wanted to show them the park, we had our son and daughter-in-law
0:52.4	in town.
0:54.7	August is not a good time to go to Yellowstone National Park.
0:58.3	It's smoky, and it's really, really crowded.
1:02.1	So it wasn't my first choice but that's when people could go so we went
1:06.0	but it took most a day. As a result, some of today's show I have recorded right now such as this discussion on rebalancing.
1:19.4	The rest of it though is audio I recorded this past Saturday for money for the rest of us
1:25.3	plus members and when I re-listened to it I thought it was something that you if you're
1:31.1	not a plus member would find equally as interesting. So I'm going to start
1:37.8	talking about rebalancing and then we'll transition to that additional audio.
1:44.0	Got an email from listener George, and he writes,
1:48.0	my US funds have done well, but they essentially move together
1:51.2	and my international funds, including emerging markets, also generally move together and my international funds including emerging markets also
1:53.8	generally move together but have not done so well. Being a dutiful rebalancer I have
2:00.7	shifted money into the non-US portion to the point that I the amount I have in non-US especially emerging markets
	...

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