Sean Gates

Hello.

This is an easy podcast.

Just put everything in gold and go away for a while.

Yeah, this is a fun topic.

It's tricky because you get investors of all walks of life who don't really know what they're trying to accomplish.

And I would say that's the foundation of rebalancing, right?

What is your target allocation?

Because if you don't have a target, you don't know what to rebalance towards.

The target allocation is usually a function in the old school world, we'd call it the investment policy statement, but really it's just a document or a guiding ethos on where you want to go.

So a financial plan could be a decent investment policy statement.

And it's to say a combination of what is your risk capacity and risk tolerance and back into that target allocation.

Is it 60-40 like a traditional mix, 100% equity?

all cash.

Those are how you would back into your target allocation.

And then you get into the rebalancing.

Yes, I would say, you know, valuations is something to consider when you're thinking about rebalancing, right?

If we take a step back on the overall rebalancing process, right, there's typically two ways to do it, one based on time, and one based on certain measurable metrics, usually a percentage drift, but it could also be one of valuations, it could also be one of

overall market sentiment, like Fed cutting interest rates, like unique market events.

And so I do think you should take those into consideration, but you have to go through a lot of education for someone to help guide them on where their rebalancing or target allocation should be.

One chart that I think you and I are very fond of, I know me and Megan are very fond of, is the Quilt chart.