Market Factors and Regular Rebalancing Affecting Allocation Decisions


Last month’s Asset Allocation Survey special question asked AAII members what most often causes them to alter their portfolio allocations. The largest group (14% of all respondents) cited market factors such momentum, technical analysis and valuation. More than 13% said that they periodically rebalance their portfolios or otherwise make small adjustments when their allocations stray too far off target. A nearly equal number of respondents said that they don’t or that they rarely change their allocations. About 10% of respondents said that they take advantage of market downturns to buy perceived bargains. Age, particularly nearness to or progression in retirement, is a catalyst for more than 7% of respondents. Approximately the same number of respondents said that the economy or other macro factors influence their decisions.

Here is a sampling of the responses:

  • “I don’t change my allocation very much. I try to stay with stocks by picking good companies that are going to grow over time.”
  • “Market drops to increase present positions and to take advantage of new positions”
  • “Tilting more conservative as retirement approaches.”
  • “Generally, I don’t alter my portfolio except for my annual rebalancing.”
  • “Market volatility”
  • “I only alter my portfolio when I have a projected or emergency need for cash.”

Want to weigh in? Take the survey yourself and see results online at

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