When to rebalance your stocks in retirement and in the accumulation stage.

Core Insights - Most Canadian DIY investors adopt a hybrid approach, combining individual stocks with ETFs for diversification, which simplifies portfolio management and rebalancing [1][5] - Canadian blue chip stocks have historically outperformed the market, with a strategy focusing on the 100 largest stocks yielding an annual outperformance of nearly 2.5% compared to the TSX [2][4] - A low volatility portfolio in Canada typically includes sectors like banks, insurance, utilities, and consumer staples, which are considered safer investments [5][6] Rebalancing Strategies - Regular rebalancing is crucial for maintaining portfolio performance, with studies indicating that monthly rebalancing can lead to an average annual return of 14.2%, compared to 13.84% for quarterly and 11.59% for annual rebalancing [13][10] - The process of rebalancing involves selling high-performing stocks and reallocating funds to underperformers to maintain consistent portfolio weightings [10][16] - Transaction costs are a consideration in rebalancing, but many discount brokerages now offer free trades, which can mitigate these costs [11] Retirement Considerations - In retirement, rebalancing strategies shift to generating income, often involving selling high-performing stocks to fund living expenses [16][22] - Managing geographic allocations is also important, with recommendations for annual rebalancing to maintain desired exposure across Canadian, U.S., and international markets [27] - Tax implications play a significant role in rebalancing taxable accounts, necessitating careful management of capital gains and losses [24][25]