TD Waterhouse one month performance chart above shows:
- Purple line: SPY exchange-traded fund (reflecting the US market) is up 3%.
- Lower line: TSE exchange-traded fund (reflecting the Canadian market) is at 0%.
- The bars show volume. We can ignore them.
In our core portfolio, we maintain a 50-50 balance between SPY (the US market) and a US money market fund. The one-month 3% growth shown in the chart above, combined with previous growth, resulted in having the SPY portion go up to 63% of the portfolio, so we rebalanced to bring it back to 50-50.
The cost of the transaction? It is less than $10 whether you are shifting a four-digit amount or a seven-digit amount!
Columbia University, Emeritus Professor Dr. A. A., recently asked how we chose the percentage rise or drop in to keep our asset allocation balanced. The preceding link explains.