A.I.M. Users Bulletin Board

[Qarel]

Hi AIMster, on rebalancing you have had replies on the lines of:
- in one account, PC doesn't change;
- in a split account, reset all PC's to the share value; or:
- add/subtract 100% of the added/subtracted share value to each PC.

Since you mentioned PC's (plural), I assume you are talking about a split account (each fund its own PC). Now when you have AIMed these funds for a while, share value and portfolio control will differ. Resetting the PC’s, or adding/subtracting 100% of the added/subtracted share value, will change the relation (ratio!) between PC and share value. Those two options still are a good idea, but a third option is to change PC by (New fund value - Old fund value) * PC. For the first fund (4300 > 5300) this would mean multiplying its PC by about 1.23. This would keep your next buys or sells in about the same place, relative to the current price of each fund. For what it's worth!

Regards,

Karel