If some stocks remain bearish for more than a week, how will you rebalance if the rebalance frequency is monthly ? By the end of a month, that stock may further go down resulting in losses.
Yes – some stocks can become very bearish before the next rebalance or even over a few minutes. This will be a point of concern only for those portfolios that are not adequately position sized.
All WeekendInvesting portfolios are very well adequately position sized and the overall portfolio will not have a high impact even if a particular stock in the portfolio goes to zero. We have explained this in detail in this video.
Hence an advance rebalance will never be required.
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