Stocks/Bonds 40/60 Momentum Portfolio: Rebalancing Strategy

Data Source: from January 1982 to February 2024
Consolidated Returns as of 29 February 2024

Managing the Stocks/Bonds 40/60 Momentum Portfolio with a yearly rebalancing, you would have obtained a 8.06% compound annual return in the last 30 Years.

With a quarterly rebalancing, over the same period, the return would have been 7.92%.

How do returns and drawdowns change, implementing different rebalancing strategies?

Rebalancing Strategies

In order to keep risk under control, you should rebalance assets quotes from time to time, so to keep them at the original percentage of the asset allocation.

Rebalancing can be performed in several ways.

At fixed time intervals:
  • Yearly: Jan 1st
  • Half Yearly: Jan 1st, Jul 1st
  • Quarterly: Jan 1st, Apr 1st, Jul 1st, Oct 1st
When a component (at least one) diverges from its original weight beyond a certain threshold (e.g. 5% or 10%).

Portfolio Returns as of Feb 29, 2024

Implementing different rebalancing strategies, the Stocks/Bonds 40/60 Momentum Portfolio guaranteed the following returns.

According to the available data source, we assume we built the portfolio on January 1982.

Portfolio returns are calculated in USD, assuming:
  • No fees or capital gain taxes
  • the reinvestment of dividends, if existing
STOCKS/BONDS 40/60 MOMENTUM PORTFOLIO RETURNS
Period: January 1982 - February 2024
Annualized Returns
Swipe left to see all data
Return (%) and number of rebalances as of Feb 29, 2024
Rebalancing Strategy 1Y 5Y 10Y 30Y MAX
(~42Y)
Yearly Rebalancing 14.70 (1) 5.25 (5) 6.03 (10) 8.06 (30) 9.74 (43)
Half Yearly Rebalancing 14.74 (2) 5.32 (10) 6.03 (20) 7.89 (60) 9.65 (85)
Quarterly Rebalancing 14.83 (4) 5.40 (20) 6.09 (40) 7.92 (120) 9.69 (169)
5% Tolerance per asset 15.45 (0) 5.33 (1) 6.12 (4) 8.08 (22) 9.78 (26)
10% Tolerance per asset 15.68 (0) 5.58 (1) 6.33 (2) 8.28 (9) 9.92 (10)

In order to have complete information about the portfolio, please refer to the Stocks/Bonds 40/60 Momentum Portfolio: ETF allocation and returns page.

Performances as of Feb 29, 2024

Historical returns and stats of Stocks/Bonds 40/60 Momentum Portfolio, after implementing different rebalancing strategies.

STOCKS/BONDS 40/60 MOMENTUM PORTFOLIO PERFORMANCES
Period: January 1982 - February 2024
Swipe left to see all data
Standard Deviation
Max Drawdown (%)
Rebalancing Strategy Return % Std Dev(%) Ret. / Std Dev MaxDD(%) Ret. / MaxDD
Yearly Rebalancing 9.74 (43) 7.44 1.31 -21.11 0.46
Half Yearly Rebalancing 9.65 (85) 7.36 1.31 -21.69 0.44
Quarterly Rebalancing 9.69 (169) 7.37 1.31 -22.40 0.43
5% Tolerance per asset 9.78 (26) 7.45 1.31 -22.24 0.44
10% Tolerance per asset 9.92 (10) 7.42 1.34 -21.66 0.46
(*) Since Jan 1982 (~42 yrs) | Annualized Returns (and number of rebalances)

Drawdowns as of Feb 29, 2024

Historical Drawdowns of Stocks/Bonds 40/60 Momentum Portfolio, after implementing different rebalancing strategies.

STOCKS/BONDS 40/60 MOMENTUM PORTFOLIO DRAWDOWNS
Period: January 1982 - February 2024
Swipe left to see all data
Rebalancing
Tolerance per asset
Yearly Half Yearly Quarterly 5% 10%
-21.11
Nov 2021 - In progress
-21.69
Jan 2008 - Sep 2010
-22.40
Jan 2008 - Sep 2010
-22.24
Jan 2008 - Sep 2010
-21.66
Nov 2021 - In progress
-20.54
Nov 2007 - Apr 2010
-20.98
Nov 2021 - In progress
-21.01
Nov 2021 - In progress
-21.54
Nov 2021 - In progress
-20.90
Jan 2008 - Sep 2010
-13.77
Sep 1987 - Mar 1989
-11.83
Sep 1987 - Jan 1989
-11.12
Sep 1987 - Jan 1989
-11.66
Sep 1987 - Jan 1989
-11.10
Sep 1987 - Jan 1989
-8.48
Feb 2001 - May 2003
-9.32
Sep 2000 - May 2003
-8.84
Sep 2000 - May 2003
-8.39
Feb 2001 - May 2003
-8.23
Feb 2020 - May 2020
-7.10
Feb 2020 - May 2020
-7.10
Feb 2020 - May 2020
-7.10
Feb 2020 - May 2020
-7.32
Feb 2020 - May 2020
-7.28
Feb 2001 - May 2003
5 Worst Drawdowns - Average
-14.20 -14.18 -14.10 -14.23 -13.84
10 Worst Drawdowns - Average
-9.88 -9.81 -9.73 -9.86 -9.73

For a deeper insight, please refer to the Stocks/Bonds 40/60 Momentum Portfolio: ETF allocation and returns page.