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I would like to rebalance my portfolio, but at the same time want to avoid paying capital tax on gains. how do I balance these two? are there any rules of thumb?

thanks

J 

I personally have all of my after tax money except for an emergency fund in large cap index funds.  No rebalancing is ever necessary.  My rebalancing between the other investment classes is done in my IRA.  It avoids all capital gains taxes until I start spending my after tax assets.

Thanks, 2B! I'd love to see how other forum members approach the same issue.

The consensus conclusion from the academic studies I've read is that we should be flexible, rather than slavish, about rebalancing. This means allowing the portfolio asset allocation to get a little--- but not wildly--- out of whack. A little flexibility will reduce rebalancing, and associated expenses, significantly.

Scott