Warren Buffett Portfolio: Rebalancing Strategy

Data Source: from January 1871 to February 2024
Consolidated Returns as of 29 February 2024

Managing the Warren Buffett Portfolio with a yearly rebalancing, you would have obtained a 9.85% compound annual return in the last 30 Years.

With a quarterly rebalancing, over the same period, the return would have been 9.82%.

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 Warren Buffett 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
WARREN BUFFETT PORTFOLIO RETURNS
Period: January 1871 - 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
(~153Y)
Yearly Rebalancing 28.34 (1) 13.39 (5) 11.45 (10) 9.85 (30) 8.74 (154)
Half Yearly Rebalancing 28.26 (2) 13.35 (10) 11.42 (20) 9.79 (60) 8.73 (307)
Quarterly Rebalancing 28.24 (4) 13.40 (20) 11.45 (40) 9.82 (120) 8.73 (613)
5% Tolerance per asset 29.13 (0) 13.47 (0) 11.66 (1) 9.98 (4) 8.82 (18)
10% Tolerance per asset 31.08 (0) 14.61 (0) 12.53 (0) 10.42 (0) 8.96 (0)

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

Performances as of Feb 29, 2024

Historical returns and stats of Warren Buffett Portfolio, after implementing different rebalancing strategies.

WARREN BUFFETT PORTFOLIO PERFORMANCES
Period: January 1871 - 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 8.74 (154) 14.85 0.59 -79.29 0.11
Half Yearly Rebalancing 8.73 (307) 14.92 0.59 -79.28 0.11
Quarterly Rebalancing 8.73 (613) 14.94 0.58 -79.40 0.11
5% Tolerance per asset 8.82 (18) 15.16 0.58 -79.41 0.11
10% Tolerance per asset 8.96 (0) 16.05 0.56 -82.40 0.11
(*) Since Jan 1871 (~153 yrs) | Annualized Returns (and number of rebalances)

Drawdowns as of Feb 29, 2024

Historical Drawdowns of Warren Buffett Portfolio, after implementing different rebalancing strategies.

WARREN BUFFETT PORTFOLIO DRAWDOWNS
Period: January 1871 - February 2024
Swipe left to see all data
Rebalancing
Tolerance per asset
Yearly Half Yearly Quarterly 5% 10%
-79.29
Sep 1929 - Jun 1944
-79.28
Sep 1929 - Jun 1944
-79.40
Sep 1929 - Jun 1944
-79.41
Sep 1929 - Jun 1944
-82.40
Sep 1929 - Feb 1945
-45.52
Nov 2007 - Apr 2011
-45.82
Nov 2007 - Feb 2012
-45.99
Nov 2007 - Feb 2012
-45.67
Nov 2007 - Apr 2011
-50.35
Nov 2007 - Mar 2012
-40.52
Jan 1973 - Jun 1976
-40.82
Jan 1973 - Jun 1976
-40.84
Jan 1973 - Jun 1976
-40.42
Jan 1973 - Mar 1976
-44.79
Sep 2000 - Oct 2006
-39.67
Sep 2000 - Sep 2006
-40.01
Sep 2000 - Sep 2006
-39.88
Sep 2000 - Sep 2006
-40.37
Sep 2000 - Oct 2006
-44.79
Jan 1973 - Sep 1976
-30.50
Apr 1876 - Apr 1879
-30.56
Apr 1876 - Apr 1879
-30.67
Apr 1876 - Apr 1879
-31.66
Oct 1906 - Dec 1908
-32.15
Oct 1906 - Dec 1908
5 Worst Drawdowns - Average
-47.10 -47.30 -47.36 -47.51 -50.90
10 Worst Drawdowns - Average
-36.77 -36.87 -36.92 -37.16 -39.49

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