Occasional portfolio rebalancing is necessary unless you are only invested in an automatic glide path fund. I just contribute funds to the deficient allocation category. If it requires a much higher amount than the funds available, utilizing leverage can get me to a balanced portfolio quicker.
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The paper [Rebalance your portfolio without selling](https://arxiv.org/pdf/2305.12274) describes some more complex ways to optimize rebalancing.
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The paper [Rebalance your portfolio without selling](https://arxiv.org/pdf/2305.12274) describes some more ways to optimize rebalancing.
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By utilizing derivatives when rebalancing, I can turn a buy into a sell and vice versa. The notional values of long or short derivatives can simulate a reduction or an increase in that asset class. As an example, let's say I need to sell $4000 of large cap to rebalance. Instead of selling that stock, I can buy a put, which will have a negative notional value. Say SPYM is trading at 80. A .50 delta PUT 200 days out might cost $400. By buying that, I've created a notional value of: