5. Re balancing Approach - mlb3820/prba GitHub Wiki

The re-balancing intent is to bring all asset classes back into balance as one has defined it.

The asset classes I use under the Permanent Portfolio scheme are generally that same as those defined in Investopedia: stocks, bonds, cash plus gold.

There are a variety of ways of holding these asset classes, not all of which fit neatly into the typical brokerage classifications, especially if held outside the brokerage. This app affords the investor the flexibility to define and assign asset classes to their various holdings and define how much of the portfolio should be held in each asset class.

The approach is fairly simple:

1. Define asset classes as desired.
2. Define the % of the portfolio desired (target allocation) in that asset class.
3. Define the upper and lower bounds (bands) for the target allocation of each asset class.
4. Add holdings and assign the appropriate asset class. Holdings = # of units and type: stock market symbol, cash, oz of gold.

Once a day the app will search for variances in the target bands and if exceeded will generate and email to the investor a list of recommended trades (sell X shares of ABC holding, buy Y shares of XYZ holding) that if executed would bring the portfolio back into the balance defined by the investor.

The app will also allow the investor to request a re-balance trade list at any time.