US Stocks Portfolio: Rebalancing Strategy

Data Source: from January 1871 to January 2024
Consolidated Returns as of 31 January 2024

Managing the US Stocks Portfolio with a yearly rebalancing, you would have obtained a 9.95% compound annual return in the last 30 Years.

With a quarterly rebalancing, over the same period, the return would have been 9.95%.

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 Jan 31, 2024

Implementing different rebalancing strategies, the US Stocks Portfolio guaranteed the following returns.

According to the available data source, we assume we built the portfolio on January 1871.

Portfolio returns are calculated in USD, assuming:
  • No fees or capital gain taxes
  • the reinvestment of dividends, if existing
US STOCKS PORTFOLIO RETURNS
Period: January 1871 - January 2024
Annualized Returns
Swipe left to see all data
Return (%) and number of rebalances as of Jan 31, 2024
Rebalancing Strategy 1Y 5Y 10Y 30Y MAX
(~153Y)
Yearly Rebalancing 19.21 (1) 13.44 (5) 11.92 (10) 9.95 (30) 9.11 (154)
Half Yearly Rebalancing 19.21 (2) 13.44 (10) 11.92 (20) 9.95 (60) 9.11 (307)
Quarterly Rebalancing 19.21 (4) 13.44 (20) 11.92 (40) 9.95 (120) 9.11 (613)
5% Tolerance per asset 19.21 (0) 13.44 (0) 11.92 (0) 9.95 (0) 9.11 (0)
10% Tolerance per asset 19.21 (0) 13.44 (0) 11.92 (0) 9.95 (0) 9.11 (0)

In order to have complete information about the portfolio, please refer to the US Stocks Portfolio: ETF allocation and returns page.

Performances as of Jan 31, 2024

Historical returns and stats of US Stocks Portfolio, after implementing different rebalancing strategies.

US STOCKS PORTFOLIO PERFORMANCES
Period: January 1871 - January 2024
Swipe left to see all data
Standard Deviation
Max Drawdown (%)
Rebalancing Strategy Return % Std Dev(%) Ret. / Std Dev MaxDD(%) Ret. / MaxDD
Yearly Rebalancing 9.11 (154) 16.59 0.55 -84.60 0.11
Half Yearly Rebalancing 9.11 (307) 16.59 0.55 -84.60 0.11
Quarterly Rebalancing 9.11 (613) 16.59 0.55 -84.60 0.11
5% Tolerance per asset 9.11 (0) 16.59 0.55 -84.60 0.11
10% Tolerance per asset 9.11 (0) 16.59 0.55 -84.60 0.11
(*) Since Jan 1871 (~153 yrs) | Annualized Returns (and number of rebalances)

Drawdowns as of Jan 31, 2024

Historical Drawdowns of US Stocks Portfolio, after implementing different rebalancing strategies.

US STOCKS PORTFOLIO DRAWDOWNS
Period: January 1871 - January 2024
Swipe left to see all data
Rebalancing
Tolerance per asset
Yearly Half Yearly Quarterly 5% 10%
-84.60
Sep 1929 - Dec 1944
-84.60
Sep 1929 - Dec 1944
-84.60
Sep 1929 - Dec 1944
-84.60
Sep 1929 - Dec 1944
-84.60
Sep 1929 - Dec 1944
-50.84
Nov 2007 - Mar 2012
-50.84
Nov 2007 - Mar 2012
-50.84
Nov 2007 - Mar 2012
-50.84
Nov 2007 - Mar 2012
-50.84
Nov 2007 - Mar 2012
-45.86
Jan 1973 - Dec 1976
-45.86
Jan 1973 - Dec 1976
-45.86
Jan 1973 - Dec 1976
-45.86
Jan 1973 - Dec 1976
-45.86
Jan 1973 - Dec 1976
-43.94
Sep 2000 - Mar 2006
-43.94
Sep 2000 - Mar 2006
-43.94
Sep 2000 - Mar 2006
-43.94
Sep 2000 - Mar 2006
-43.94
Sep 2000 - Mar 2006
-34.11
Apr 1876 - Feb 1879
-34.11
Apr 1876 - Feb 1879
-34.11
Apr 1876 - Feb 1879
-34.11
Apr 1876 - Feb 1879
-34.11
Apr 1876 - Feb 1879
5 Worst Drawdowns - Average
-51.87 -51.87 -51.87 -51.87 -51.87
10 Worst Drawdowns - Average
-40.31 -40.31 -40.31 -40.31 -40.31

For a deeper insight, please refer to the US Stocks Portfolio: ETF allocation and returns page.