Where is my Automatic Asset Allocation Rebalancing Tool?

Posted by Erik | Filed under Finance

I would love to find an online discount stock broker that will rebalance my portfolio automatically to my target asset allocation.

My ideal “Automatic Asset Allocation Rebalancing Tool”© would work something like this:

1. I login to my account and select the account I want to work with.
2. One click takes me to a form with rows for each asset I wish to purchase.
3. In each row, I search/select/enter each of the stocks and ETFs that I want in my portfolio.
4. In addition to the ticker, I also enter my target portfolio allocation (as a percentage) for each asset and possibly limits (as a percentage) that specify how far off the target it would have to be for me care to rebalance it (at least 10%, for example)
5. Submit and save.
6. When I return to the dashboard for this account, I will now see all of the usual information about my assets including the current allocation, target allocation, and percentage difference for each.
7. Each asset includes a button that says “Rebalance” that will buy or sell that asset back to its target allocation.
8. At the bottom, there would be the big, magical “Rebalance Portfolio” button, complete with all the math that would occur if I click button, including how many trades would be made, how much the commission would be, etc.

Some optional features would be that the whole page is AJAX-enabled so that looking up asset details or adding new rows would be done without leaving the page or losing information. It could have the option of entering a schedule at which rebalancing occurs automatically.

I hate spending the time at the end of the year to rebalance my portfolios manually and think that any online broker that makes this sort of process easier would make their customers very happy.

Permalink | Comments (0) | November 22, 2009

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