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REDDIT

Is selling ever OK to rebalanced portfolio (as opposed to rebalancing by buying)?

M
Mar 3, 2025 · 16:08

I started investing around 5 years ago, and have been consistently DCAing into mainly VTI (US) and VXUS (International) with a weekly breakdown of 70% and 30% respectively. I wasn't really up-to-date on rebalancing until recently, when I noticed that the performance of VTI over the years has taken me pretty far off of my target.

I would like to rebalnacne to bring VTI and VXUS back to 70% and 30%, and looking to actually bring VXUS closer to 35% like the Vamguard target date funds. However, even if I DCA only into VXUS it will take over a year to reach this target while buying thousands of dollars worth per month.

I'm wondering whether I should sell a portion of VTI to instantly rebalance? This wouldn't be something I do all of the time, only yearly. I'm aware that there are tax implications, but honestly, the more my portfolio grows, the harder and more unrealistic rebalancing by buying becomes? I'm thinking that at some point rebalancing by selling becomes the only way?

Does that make sense? Or am I thinking about this wrong? I'm definitely invested for the long term, and don't imagine pulling anything until retirement, so not sure how to balance the need to rebalance with taxes...

Thank you!