HOW REBALANCING WORKS.
New users get confused after looking at 5-6 changes even when we have published just 1 exit on a weekly rebalance.
Let us look at why it happens and what is the solution.
Smallcase takes stock weights as the input when Publishers, (That’s MysticWealth) upload portfolios to the back-end a night before the email reaches you.. That exact weight is applied to each stock to assign the buys and sells quantity on each stock.
Problem is, there is a gap between last close and when market opens. While the publisher has uploaded a file based on previous day’s prices, Smallcase will use the prices at the time of rebalance.
As a result, more buys and sells would get generated to even out the weights. And therefore you see small incremental buys and sells on your rebalance update.
Customize your rebalances
You can customize your smallcase orders by simply removing these incremental buys and sells. (Make them 0)
We communicate the exact changes to the portfolio in the dialogue box and therefore you know beforehand exactly what are unnecessary changes and what are portfolio updates.
All costs add up. By doing this exorcise, you can save on the depository fees (Around Rs 15) charged by your broker on every stock (regardless of quantity). While this amount appears miniscule, a weekly rebalance with these anyways unnecessary incremental changes can easily dent you 3-4k per year.
A penny saved is penny earned.