4 ms·
if you're only dealing with five stocks, why not just rebalance your holdings yourself every month or so? plenty of zero-commission options these days.
by leetcrew 6y ago
if you're only dealing with five stocks, why not just rebalance your holdings yourself every month or so? plenty of zero-commission options these days.
- zeckalpha 6y agoNo need to rebalance if it is market cap weighted
- shoo 6y agoYou need to rebalance if the stocks included in your top 5 index change, i.e. if some new stock displaces one of your original 5. Otherwise you've got a fund of 5 stocks chosen by some metric on historical date blah -- which may be a reasonable idea but doesn't seem to align with the spirit of "S&P 5".
- reducesuffering 6y agoETF format can more easily defer capital gains with losses. Though the more stocks in the index, the more economic situations in can do this. It wouldn't be possible if the index was just 5 stocks and they all gained disproportionately.