I see no "alarms". But the amount of money might alarm me some and
change my mind. In addition 9 funds is a lot to keep track of... I am
not familiar with too many of funds listed.

If 401k has 100k, and a difference of 20% or 22% in one mutual fund is
not that much money ($2000). In this case I rebalance over time, using
extra criteria. Once every 3 years I do wholesale changes.

If I was at $1000k I would care more and rebalance more, because the 2%
change meant a lot more money ($20,000).

gradual rebalancing is taking the company match (in company stock) and
selling it once every 3 quarters. When I sell it I but what's low/
behind the other funds (if one fund is 18% of balance and one is 22% of
balance, I buy the one which is 18%. Two reasons. I want to let my
winners keep going to a degree (smart money had an article about 5
years ago that suggested too much rebalancing hurts returns). Second
reason is to buy the funds which are lagging (if I believe that assett
will rebound). If I didn't believe the asset could rebound, I would
drop that investment.

In the years where I had no company stock, I put 10% into a money
market or stable value fund, and sold this fund once every 3 months
using the same method as above.

Bhoot writes
- quote -

In order to answer this question, we'd have to know your rationale. Why
do you hold these particular funds in these particular allocations?
What other funds can you choose from?

Dave

I was told by a financial advisor that you should rebalance once a
year. You can do it more often but really not necessary.

What is the generally recommended frequency of rebalancing 401(k)
funds? My current provider offers a "cruise control" option, whereby
they would rebalance once a quarter. So far I have not used it, but I
am kind of curious of what others think.

In 12 years (at the same employer), I have rebalanced my 401(k) only 3
times, only 1 of which was an "active" rebalancing. The other two
times, there was a change in the 401(k) manager: MetLife --PanAmerican --> MassMutual; each time, I reinvested all prior balance
in round percentages.

My current allocation is as follows. The target % means it is the
proportion in which new funds each month are allocated (& if all funds
had same gain, the prportion would be maintained). Actual column
represents proportion of current balance.

401(k) investment Funds Target % Actual % (1/17/06)
Premier Cap Appreciation (OFI) 20.0% 18.8%
Prm Small Co Opprty (Babson) 10.0% 5.7%
Prm Value (Babson) 10.0% 10.7%
Premier Global (OFI) 10.0% 9.8%
Premier Main Street (OFI) 10.0% 9.9%
Sel Indexd Eqty (Northrn Trst) 10.0% 12.6%
Sel Mid Cap Growth II (TRP) 10.0% 8.6%
Sel Sm Co Grwth (Mazama/Eagle) 10.0% 10.9%
Quest Balanced (OFI) 10.0% 13.0%
TOTAL 100.0% 100.0%

I would appreciate comments from folks in this group, on rebalancing
ideas, and also is this allocation "reasonable" for a 38 year old,
wanting to retire by age 50 (but would use other resources until age 65
or so).

Bhoot Nath