Comments on: A Look at the Dow Jones Total Market Index Sector Performance

By: February 2nd Friday Five - I’m Exhausted Edition : Generation X Finance

February 2nd Friday Five - I’m Exhausted Edition : Generation X Finance — Fri, 02 Feb 2007 15:01:25 +0000

[...] Dow Jones Total Market Index Sector Performance – JLP has put together a nice “periodic table” of the performance across the Dow Jones sectors. I always find these an interesting way to illustrate how important it is to diversify. [...]

By: AllFinancialMatters » Blog Archive » A Look at the iShares Dow Jones Total Market Sectors

Fri, 02 Feb 2007 05:11:01 +0000

[...] Earlier this week I posted the Dow Jones Total Market Index Sector Performance for 1992 – 2006. This was the performance of the actual index sectors, which to my knowledge weren’t available for people to invest in until iShares came along and started offering the ten sectors as exchange-traded funds in the summer of 2000. Below are the total returns for the ten sectors of the Dow Jones Total Market Index along with the Total Market Index Fund (IYY) which includes all ten sectors: [...]

By: Nagel

Nagel — Tue, 30 Jan 2007 01:27:42 +0000

Those sector performance charts are telling. It shows that diversification is the best method.

By: JLP

JLP — Mon, 29 Jan 2007 23:39:43 +0000

Gaming,

I haven’t run the numbers but I don’t think rebalancing more often would make that much difference, aside from making life rough due to all the activity.

By: Gaming The Credit System

Gaming The Credit System — Mon, 29 Jan 2007 23:27:04 +0000

Wow. Those first two results are pretty interesting. So the conclusion is that a periodic rebalancing is usually a good thing.

I wonder if you could simulate the same results with different periods of rebalancing? E.g., every 6 months, 3 months, 2 years, 5 years? Obviously an overly long rebalancing period would bring the results down to the non-rebalanced level, but I think rebalancing too often would be equally harmful. It’d be really interesting to see if there’s an “ideal” rebalancing period.