Rebalancing the portfolio. Is it necessary to do this so often?#84

Greetings to our users and not only. I’d really like to discuss with you an idea related to portfolios.

Right now, we are thinking about various improvements to this section. I would like to know, how often do you rebalance your trading portfolio?

Please leave your answer in the comments in free form.

I can tell you about my experience.
About once every two weeks, I go in and look at my own balances and rebuild my portfolio, allocating it in a certain way.

BTC (20%) \ ETH (20%) \ SOL (20%) \ MATIC (20%) \ USDT (20%)

I don’t always get it right, because sometimes I need to withdraw money, sometimes something else, but I try to do it this way.

I do this every month or so, but it would be WAY easier if this was implemented into a system

I don’t rebalance.

When it comes to the assets mediated by Bitsgap I try to find the right combination of bots which are producing large, consistent incomes and then I keep pruning them by that measure, such that the worst % daily performers are replaced by another asset, exchange, bot, and/or changed parameters. I have no timetable for such pruning. I like to get a feel for how they are performing or whether there isn’t another asset, exchange, bot, and/or set of changed parameters which wouldn’t perform better.

I am not using Bitsgap to generate a modicum of profits from otherwise ‘idle’ assets, but rather am focussed on outsized-performance. Even so, I will also try to have a sufficient mix of assets, exchanges, bots, and/or parameters such that when some are not performing, others are (though there is much more work to be done in order to optimize that), so as to have a more consistent profit/equity curve.

When it comes to other crypto assets, the portfolio of assets is so large, that I have no model portfolio and it would be difficult to have one to try to match, but rather look for outsized gains and then redistribute the original money invested and the profits not including assets accumulated thereby into other assets which are prospective; and then keep cycling the money that way. The cycle therefore is not rigid, and I am a buying and selling most days.

In effect it is a rebalance because I am selling down and spreading the money around to ensure that generally there’s no asset with too large a portion of the pie, but again that is more to do with capturing outsized-returns from recently less performant assets or from trending assets, more than it is to mitigate risks or ensure that I am maximizing the return from a relatively fixed set of assets.

Further, rebalancing implies that I have a model portfolio against which to do the rebalance and since I do not have such I don’t consider it a rebalance.

I have implemented some basic algorithms for rebalancing as part of work associated with asset management, so while I am very familar with it, I am seeking greater returns than what a model portfolio and rebalancing would normally imply. However, if that facility were to be provided, I might avail myself of it. I would be particularly interested in what I might call an open-ended model porfolio, such that the ratios are floating according to other considerations, including an unspecified ratio of ‘cash’ from which purchases may be made.

what do you mean “ rebalance a portfolio”

To rebalance a portfolio is to sell down those in a pool of assets which have gained in value, so as to retain the ratio of values of those assets. It also means to put more money into an asset which has gone down in value to retain that ratio, which would involve using all other assets including cash as a way to do that.

I used to use a product called shrimpy to do this I could set the %’s and it would automatilcally rebalance every period I set.

I was using Shrimpy until they closed shop. Was rebalancing every single hour if it changed within a certain percentage.

I used Shrimpy for a while with about 4 exchanges, it worked at first, after a while it would get stuck in rebalance mode and freeze up; Customer service wasn’t much help. Shrimpy had a lot of bugs to work out and I pre-paid a year in advance; It wouldn’t work or do anything useful for me, so I stopped using it after 4 months. Shimpy refused to refund the 8 months I pre-paid for, then shut down. If your going to use Shrimpy, DO NOT PRE-PAY.

I think they do not do this service anymore

Portfolio rebalancing is a good idea.

I do think it is important to have portfolio rebalancing as an option in the settings.
so that people can choose whether they want that, because there are people who don’t want that.

For people who would like to rebalance their portfolio, it is important to give these people a choice in the settings such as;

-which part or which crypto do you want to rebalance? (all or part of the portfolio)

-choice distribution in %

-how often do you want to rebalance? every day, week, month, quarter or year and let people choose a fixed date themselves. (for example; April 5, August 23, etc.)

It is best to rebalance the portfolio once a year or on a fixed date

Also, rebalancing must happen across multiple exchanges for nominated assets, rather than all.