Does anyone know why the SAA method results in rebalancing the entire portfolio? the corridor width was +/- 10%, the UK fixed income target was 40% so if it reaches 50% or more then we rebalance, but in March the allocation was 45%, which is within the corridor. Thanks.
There’s two ways to use percentage of portfolio rebalancing: 40 +/- 10% = 30 to 50 % band 40 +/- (40%*10) = 36 to 44 % band They’re referring to the second method in this example, where 45% is outside the band.
bpdulog Wrote: ------------------------------------------------------- > There’s two ways to use percentage of portfolio > rebalancing: > > > 40 +/- 10% = 30 to 50 % band > > 40 +/- (40%*10) = 36 to 44 % band > > They’re referring to the second method in this > example, where 45% is outside the band. bulldog thanks this one i need to review
pimpineasy Wrote: ------------------------------------------------------- > bpdulog Wrote: > -------------------------------------------------- > ----- > > There’s two ways to use percentage of portfolio > > rebalancing: > > > > > > 40 +/- 10% = 30 to 50 % band > > > > 40 +/- (40%*10) = 36 to 44 % band > > > > They’re referring to the second method in this > > example, where 45% is outside the band. > > > bulldog thanks this one i need to review No problem wise guy. BTW, the first method is known as interval and the second one is percentage range.
bpdulog Wrote: ------------------------------------------------------- > There’s two ways to use percentage of portfolio > rebalancing: > > > 40 +/- 10% = 30 to 50 % band > > 40 +/- (40%*10) = 36 to 44 % band > > They’re referring to the second method in this > example, where 45% is outside the band. thanks, do we use the second one because they stated the frequency of monitoring?
id like to figure out what the hell is going on with this question too? If they say PLUS OR MINUS, how is it split in half? When do you use each “method”? I could see it being 35/45 rather than 30/50 if it said “interval of 10”, but not PLUS or MINUS. This shit is so ridiculous, if they are going to ask questions like this I might as well not show up. How is this suppose to be useful in the real world? What the fuck is next? They gonna ask me how many ping pong balls fit on a fucking 747? ATKJLEWTJLKETJLKWELTJKWEKLT sorry just needed to vent.
Your vents just helped me vent… Could you vent some more please??
Looked at the question again. It says +/- 10% of the target allocation, not +/- 10% of the portfolio.
what is the significance dulog? I don’t remember reading this and don’t have the books on me, when are we suppose to use “method one” versus “method two”… To me, ±10% means above or below by 10%, i just can’t grasp how they are trying to say otherwise.
markCFAIL Wrote: ------------------------------------------------------- > what is the significance dulog? > > I don’t remember reading this and don’t have the > books on me, when are we suppose to use “method > one” versus “method two”… > > To me, ±10% means above or below by 10%, i just > can’t grasp how they are trying to say otherwise. The significance is the threshold amount. Do you have the Stalla videos? They cover this pretty well. 10% of target allocation. For example, target allocation is 30%. So it’s 10% of 30%, which is 27-33%. 10% of portfolio. Target allocation is 30%, band is 20-40%.
bpdulog Wrote: ------------------------------------------------------- > markCFAIL Wrote: > -------------------------------------------------- > ----- > > what is the significance dulog? > > > > I don’t remember reading this and don’t have > the > > books on me, when are we suppose to use “method > > one” versus “method two”… > > > > To me, ±10% means above or below by 10%, i > just > > can’t grasp how they are trying to say > otherwise. > > > The significance is the threshold amount. Do you > have the Stalla videos? They cover this pretty > well. > > 10% of target allocation. For example, target > allocation is 30%. So it’s 10% of 30%, which is > 27-33%. > > 10% of portfolio. Target allocation is 30%, band > is 20-40%. Well if CFAI comes with this question, I’ll use “percentage of” by default. If I get it right, then good and if I get it wrong, I’ll donate the three points to CFAI and search for my alpha somewhere else.