Wednesday, March 19, 2008

Rebalancing for the first time

My employer allows us to direct up to 85% of our year-end incentive into a group RRSP to reduce our taxation on the bonus. Under this group plan, we can choose from a variety of low-MER mutual funds, or invest in the company's stock. I deferred a big chunk of this year's bonus into this plan, and then proceeded to transfer the balance into my brokerage self-directed RSP account.

As of last night, I had a large cash balance sitting next to my index funds in the brokerage account, and this morning I placed orders to use this cash to buy more units of my index funds. To determine how much of each fund to buy, I used a spreadsheet similar to Canadian Capitalist's rebalancing spreadsheet. Within a couple of days, these orders should be filled, and I will be the proud owner of a freshly rebalanced retirement portfolio.

Let's see whether my spotless record of timing the market continues.

1 comment:

Canadian Capitalist said...

Thanks for the link. I personally believe that it is a good time to add to our investments. Yes, markets could go down from here but we are already getting a 20% discount on stocks.