Rebalancing Act: Going Against The Flow

Living in Southeast Asia gives me the chance to attend the Cambodian water festival.

Locals and tourists pack the streets of the capital city Phnom Penh, laughing as they splatter each other with water to welcome in the new year – but the fun often comes at a cost. Pickpockets roam the crowd, lightening the wallets of the unsuspecting.

Shake your head at the tourists’ naiveté if you must. But most investors also lose money in crowds. And it costs them far more than it does Cambodian tourists

Read the rest of the article at the Globe and Mail.

Andrew Hallam

I’m a financial columnist for Canada’s national paper, The Globe and Mail, as well as for AssetBuilder, a financial service firm based in Texas. I’m also the author of Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School and Millionaire Expat: How To Build Wealth Living Overseas. My mission is to educate, motivate and inspire people on basic retirement planning and best practices for investing, using evidence-based strategies. I'm happy to comment on your questions.

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18 Responses

  1. Kunwak says:

    Hi Andrew,

    I think this report is likely a better reference for the point you try to make in your article:

    "As a result, we conclude that for most broadly diversified stock and bond fund portfolios (assuming reasonable expectations regarding return patterns, average returns, and risk), annual or semiannual monitoring, with rebalancing at 5% thresholds, is likely to produce a reasonable balance between risk control and cost minimization for most investors. Annual rebalancing is likely to be preferred when taxes or substantial time/costs are involved."

    Cheers, Kunwak

  2. Moe Muise says:

    Hi Andrew – your article is behind G&M's paywall. Any chance you can post the whole article here on your blog?


    P.S. Loved your book – and also the feeling of adventure I get from many of your blog posts. My wife and I are planning to pack things up next year and move from Ottawa to Bali with our two boys.

    • Hey Moe,

      Ottawa to Bali?! That sounds fantastic! And thanks for the kind words about my book. When I click the link above, I get transferred to the Globe and Mail article. Isn't it working for you? I don't have a paid membership with the Globe and Mail, and I can access this article from my computer at work as well. Please let me know what you see. And congrats on the bold move! What will you be doing in Bali? I think you'll love it!

  3. Matt says:


    I followed a 25% allocation for canadian, American, international and bond indexes as listed in your book. Started in January and now time to rebalance. However, my percentages are all still very similar. I have one thats 25.5% and another at 24.3%. All the examples you show in your posts have much larger discrepancies (45% in this article for example). Am I doing something wrong to make my gains smaller? Should the percentages not all be similar even though my portfolio is small? I'm new at this so any advice would be greatly appreciated. Thanks


  4. Very good article and very true. I thought I was a smart investor when I got greedy with Penngrowth (PGF) almost dropped 30,000 dollars because I got seduced by the 9% yield. Thankfully a fellow blogger ( took a moment to email me from his job and told me it was a bad investment.

    The best investment plan is the one that requires no special skills or thinking.


  5. Daniel says:

    Moe is right. There is a paywall now on the Globe and Mail. The reason it is working for you Andrew is because you are allowed to view 5 free articles per month from one detected IP address. Moe, you've already used up your free articles. . but try switching to a tablet or laptop or other internet connected device to access 5 more free articles.

    • Thanks Daniel,

      That's very interesting. And oddly inconsistent. I've been accessing the link through the same laptop and it gives me access each time. This is oddly frustrating. Thanks for the explanation though. There's certainly something to it.


  6. Reed says:

    Hi Andrew
    I’m in an awkward position. My father put money in a broker’s hands as a gift to me a couple years ago. I knew nothing about investing then, and not much more now…except that I want out ( lots of mutual funds).I can’t make head nor tail of the prospectus material, though itI looks as though I’ll take a big hit, trying to get out. I need to find someone to advise me, go over the portfolio, and tell me how to go about withdrawing. It is particularly awkward as my parents and some siblings have a lot of money with this guy and, apparently I’m getting his services for a “low” cost because they have so much invested with him. How can I find an adviser I can trust, when I know so little myself?

    • Hi Reed,

      Have you read my book, or any other books on investing? I have recommended quite a few on my website, which you can access here

      It was kind of your father to get you started as an investor. And I think you should be sensitive to that. Here’s what suggest. Ask him if he would be interested in reading an investment book with you. The two of you could then discuss the content. You may consider my book, or any of the others I deemed for beginners on my site’s link. Don’t tell your dad what you know about actively managed funds. Discover it together in the book, and see if you can find academic evidence to refute it. If you choose my book, read chapters 3 and 7. They provide the strongest argument for passive investing. Let me know how this goes.


  7. Todd says:

    Hello Andrew,

    How do you rebalance a portfolio when you have a mix of Canadian and US assets? For example, VTI and VXUS are US-listed ETFs, and VSB is a Canadian ETF. Is there a way around the currency conversion costs or is norbert’s gambit the only solution?



    • Hi Todd,

      I would rebalance after converting each (not physically) into the same currency to see what percentage you have in each. But with the broad availability of ETFs trading on the TSX now, I don’t think there’s any reason to own U.S. domiciled ETFs.


  8. Raghu says:

    Hi Andrew-

    I am a Canadian expat starting annual portfolio rebalancing (portfolio about 300K CAD). I use TD international that has become internaxx now. Should I transfer to Interactive Brokers or stay put. Internaxx’s commission fees now 15 Euros for Canadian, 25 Euros for European and 45 Euros/quarter account maintenance fee (Since I only trade once a year).

    Please help clarify, thanks!

  9. Raghu says:

    Thanks Andrew. I was hoping to also have a bit of a value tilt in my portfolio…couple of clarifications:

    1) I understand index providers have also split the index into growth and value. If an ETF follows value of say Russell 3000 index for example, should we consider that as active investing?

    2) Secondly, I am not able to find value ETF’s (Like EFV, VOE,VBR, VTV on NYSE) in the Toronto or London exchange. Any suggestions?


  10. Raghu Murthy says:

    Thanks Andrew! There was a global value factor ETF (VVL) with Vanguard Canada which is actively managed, I mistakenly assumed this one with iShares UK was similar. Now I see it is based on MSCI enhanced value index. Thanks again.


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