Advanced Rebalancing Tool

Rebalancing Tool Instructions

1. Determine your ideal portfolio and set up the worksheet as follows:Enter the names of your investments (the specific funds that you own or plan to own) in column A.Enter the relevant asset class descriptions in cells G5-R5.

For US equity investments, you could use these columns to break down your allocation into Large Cap/Small Cap or Growth/Value.For International equity investments, you could use these columns to break down your allocation by region (Europe, Pacific, Emerging).

For each fund that you entered in column A, fill in columns G-R with the relevant asset class breakdown. You can find this information in the fund's prospectus or on the fund company's website.For example, if the fund in cell A11 was a Total International Stock Fund that consisted of 60% European stocks, 25% Pacific stocks, and 15% Emerging Markets stocks, you could:

1) Rename cells K5, L5, and M5 "European Stocks", "Pacific Stocks" and "Emerging Markets Stocks"2) Change cells K11, L11, and M11 to reflect the correct percentages (60%, 25%, and 15%). Check to be sure that cells G11 through R11 add up to 100%.

Enter your target asset allocation percentages in cells G40-R40. You do not need to fill in the "Low" and "High" settings in rows 39 and 41 as these values are determined by the value of cell B42.

2. Decide on a rebalancing band and adjust cell B42 if necessary (suggested value 10%). A higher value will dictate rebalancing less often but may cause prolonged exposure to a risk-inappropriate allocation.

3. Periodically check to see if portfolio rebalancing is required by doing the following:Fill in the green highlighted cells in Column B with your current portfolio balances.For each asset out of band, the corresponding gray cell in row 42 will indicate a recommended rebalancing action (Buy or Sell). If all of the gray cells are empty, no rebalancing actions are required.

4. If any of the gray cells in row 42 recommends a rebalancing action, use the yellow cells and/or the corresponding spin buttons in column E to determine the appropriate rebalancing trade.Example 1. Cell G42 says "Sell" and you wish to rebalance without depositing into or withdrawing from your account(s).

Action: lower the value of cell C7 or C22 and raise the values of your other assets that are low in their bands until cell G42 is blank and cell C36 is $0Example 2. Cell K42 says "Buy" and you wish to rebalance while making a $1000 deposit into your account(s).

Action: raise the value of cell C11 or C26 and lower the values of your other assets that are high in their bands until cell K42 is blank and cell C36 is $1000

5. Execute the rebalancing trade. This may involve depositing money into your account(s), withdrawing money from your account(s), or making an exchange among funds that you own. Additional calculations may be required.

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Enter the names of your investments (the specific funds that you own or plan to own) in column A.

For US equity investments, you could use these columns to break down your allocation into Large Cap/Small Cap or Growth/Value.For International equity investments, you could use these columns to break down your allocation by region (Europe, Pacific, Emerging).


1) Rename cells K5, L5, and M5 "European Stocks", "Pacific Stocks" and "Emerging Markets Stocks"2) Change cells K11, L11, and M11 to reflect the correct percentages (60%, 25%, and 15%). Check to be sure that cells G11 through R11 add up to 100%.



For each asset out of band, the corresponding gray cell in row 42 will indicate a recommended rebalancing action (Buy or Sell). If all of the gray cells are empty, no rebalancing actions are required.

4. If any of the gray cells in row 42 recommends a rebalancing action, use the yellow cells and/or the corresponding spin buttons in column E to determine the appropriate rebalancing trade.Example 1. Cell G42 says "Sell" and you wish to rebalance without depositing into or withdrawing from your account(s).

Action: lower the value of cell C7 or C22 and raise the values of your other assets that are low in their bands until cell G42 is blank and cell C36 is $0Example 2. Cell K42 says "Buy" and you wish to rebalance while making a $1000 deposit into your account(s).

Action: raise the value of cell C11 or C26 and lower the values of your other assets that are high in their bands until cell K42 is blank and cell C36 is $1000





For each asset out of band, the corresponding gray cell in row 42 will indicate a recommended rebalancing action (Buy or Sell). If all of the gray cells are empty, no rebalancing actions are required.


Advanced Rebalancing Tool

TIPS REITsAccount 1

US Fund 1 3000 0 3000 100.0%US Fund 2 3000 0 3000 100.0%US Fund 3 3000 0 3000 100.0%US Fund 4 3000 0 3000 100.0%Int'l Fund 1 3000 0 3000 100.0%Int'l Fund 2 3000 0 3000 100.0%Int'l Fund 3 3000 0 3000 100.0%Int'l Fund 4 3000 0 3000 100.0%Bond Fund 1 3000 0 3000 100.0%Bond Fund 2 3000 0 3000 100.0%TIPS Fund 3000 0 3000 100.0%REIT Fund 3000 0 3000 100.0%

$36,000 $0 $36,000 8.3% 8.3% 8.3% 8.3% 8.3% 8.3% 8.3% 8.3% 8.3% 8.3% 8.3% 8.3% 100.0%

Account 2US Fund 1 3000 0 3000 100.0%US Fund 2 3000 0 3000 100.0%US Fund 3 3000 0 3000 100.0%US Fund 4 3000 0 3000 100.0%Int'l Fund 1 3000 0 3000 100.0%Int'l Fund 2 3000 0 3000 100.0%Int'l Fund 3 3000 0 3000 100.0%Int'l Fund 4 3000 0 3000 100.0%Bond Fund 1 3000 0 3000 100.0%Bond Fund 2 3000 0 3000 100.0%TIPS Fund 3000 0 3000 100.0%REIT Fund 3000 0 3000 100.0%

$36,000 $0 $36,000 8.3% 8.3% 8.3% 8.3% 8.3% 8.3% 8.3% 8.3% 8.3% 8.3% 8.3% 8.3% 100.0%

Total $72,000 $0 $72,000 8.33% 8.33% 8.33% 8.33% 8.33% 8.33% 8.33% 8.33% 8.33% 8.33% 8.33% 8.33% 100.0%

Enter current account balance Low 7.50% 7.50% 7.50% 7.50% 7.50% 7.50% 7.50% 7.50% 7.50% 7.50% 7.50% 7.50%Enter proposed rebalancing trade Target 8.33% 8.33% 8.33% 8.33% 8.33% 8.33% 8.33% 8.33% 8.33% 8.33% 8.33% 8.33% 100.0%

High 9.16% 9.16% 9.16% 9.16% 9.16% 9.16% 9.16% 9.16% 9.16% 9.16% 9.16% 9.16%Rebalancing Range 10%


Current Balance

Rebalance Trade

New Balance

US Equity (Segmt 1)

US Equity (Segmt 2)

US Equity (Segmt 3)

US Equity (Segmt 4)

Int Equity (Segmt 1)




Bonds (Semgt 1)

Bonds (Segmt 2)


Rebalancing Tool Disclaimer

This tool is provided without support (as-is). It is intended solely for the educational and personal use of clients and prospective clients of Invest-it-Yourself.com.

Invest-it-Yourself.com is not responsible for any loss of capital or other damages that may result from the use of this tool.

None of the information contained in this file should be interpreted as a specific investment recommendation.

Rebalancing a portfolio does not protect against loss of capital. All investments involve risk.



This tool is provided without support (as-is). It is intended solely for the educational and personal use of clients and prospective clients of Invest-it-Yourself.com.

Invest-it-Yourself.com is not responsible for any loss of capital or other damages that may result from the use of this tool.

None of the information contained in this file should be interpreted as a specific investment recommendation.

Documents

Advanced Rebalancing Tool