These are some thoughts on how to best do the rebalance for your weekendinvesting smallcase.
1. Subscribe to the Good Bad & Ugly weekly Fri evening blog to know in advance if your smallcase will need to be rebalanced the coming Monday
Go to https://weekendinvesting.com/2021/04/16/the-good-bad-and-ugly-weekly-review-16-apr-2021/ and drop your email in this box on the page
2. Before Monday morning go to your smallcase at weekendinvesting.smallcase.com OR your app OR your broker interface (example zerodha.smallcase.com) and see the narration of the rebalance.
It will say ADD STOCK A STOCK B and EXIT STOCK C STOCK D
So now you know what needs to be done post market open
3. Once the market and the stocks in question have stabilized execute the rebalance. You can chose to ignore the incremental adds or exits besides the rebalance stocks that will be suggested by the smallcase algorithm by customizing your order. These will only add cost to your rebalance and will not materially impact your returns.
4. Keep some 5-10pct of spare cash around to be used for one day as SEBI rules block 20% of your sales for a day
5. If the stocks in rebalance spike due to many people trying to rebalance, let them cool off… sometimes doing the rebalance later in the day or even the next day can help. It is a matter of judgment and there unfortunately cannot be a rule on this.
6. The email from the server for this rebalance will then reach you as a REMINDER by mid morning on Monday and again on Tuesday if not yet rebalanced. You need not wait for this email.
7. Consider all weekendinvesting smallcases to be long term vehicles. There should be no rush to execute. Over a longer period if you are judicious your returns can be very close to the model portfolio.
Any questions just ping me at email@example.com.
All the best.
Please write a similar article on how to add incrementally to the smallcase. The SIP system in smallcase is weird. You cannot rebalance and SIP together, first rebalance and then add SIP. During SIP, stocks are purchased in the ratio of their weights in the portfolio after the rebalance. So, say I do not sell a stock during the rebalance (not and exit recommendation) whose weight is currently higher than that specified in the ideal portfolio. During the SIP, more of the stock will be added; SIP does not try to bring the weight of the stock near to that in the ideal portfolio by buying more of other stocks.
Hi. We will pass this valuable feedback to smallcase