How often should you rebalance your 401(k)?

How often should you rebalance your 401(k)?

You don't want to obsess about it (after all, you have a life to live), but I would recommend at least twice a year. Rather than go through the whole, buying and selling routine, it may be easier to just rebalance with new money. For example, if your bond allocation is below where you want it then direct the 401(k) to put all new contributions to your bond fund, then go back and check a few months later. This has the advantage that you are probably buying the asset which is out of favor right now (that's why it was low). So you can buy it cheap. If shoes are on sale, you probably go out and buy shoes. The same thing applies to stocks and bonds. Buy the ones that are on sale.