New Advice Challenges Old Rules on Retirement Saving
By Janet Kidd Stewart
For the portfolios Jonathan Stein is managing at his startup advisory firm, Betterment, he is forgoing the idea of rebalancing on a calendar after his own research using computer simulations showed similar results to the Vanguard study.
Instead, he sells assets only when they surge beyond about 5 percent of his target allocation.
“You end up paying less in capital gains” in taxable accounts, Stein said. Letting stocks run unchecked altogether would have resulted in higher returns over most time periods, but with much higher volatility.