The Jason Parker Interview #254
Informed Decisions Independent Financial Planning & Money Podcast
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How to Rebalance a Portfolio Using the 6040 Strategy
The way most people do buckets is they have cash bonds and stocks. Michael Kitzis points out that the problem with that is that you lose out on the benefits of rebalancing a portfolio. The nice thing or the neat thing about thinking about buckets differently is it allows each bucket to be rebalanced. And then when we went back and tested it, we said, if we started in 1973 and we had structured a portfolio that way where we had these four different buckets, each with three years of expenses, each bucket being rebalanced, which came out better? It was the 6040 stock bond portfolio that was rebalanced a year or the bucket strategy.
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