Rebalance

I don't fancy myself a savvy investor. Instead, I like to stick to basic rules and let the magic of time and markets slowly grow my investments. One way to do this is investing in passive index funds and sticking to a pre-defined asset allocation. Then, it's just a matter of rebalancing every once in a while to make sure the allocations are in line with the goal. Sounds pretty simple, right?

Well, it gets slightly more complex when you have multiple accounts with multiple funds in each. Trying to figure out the best way rebalance across all of these accounts can be frustrating and eventually led me to write this gem. You feed it all of your investment information (one account or many) and it will tell you exactly what to buy and sell in order to bring your asset allocation back into line.

NOTE: Use common sense when using this! If you see something that doesn't look correct please let me know and/or fix it and submit a pull request.

Install

$ gem install rebalance

Usage

Here's a basic example of a script using rebalance:

require 'rubygems'
require 'rebalance'

target = Rebalance::Target.new do
  asset_class 35, 'US Total Market'
  asset_class 18, 'Pacific'
  asset_class 18, 'Europe'
  asset_class 8,  'Real Estate'
  asset_class 8,  'Total Bond Market'
  asset_class 8,  'Inflation-Protected Bonds'
  asset_class 5,  'US Small Cap Value'
end

wifes_roth = Rebalance::Account.new "Wife's Roth" do
  fund 'VIPSX', 'Inflation-Protected Bonds', 200, 14.36
  fund 'VBMFX', 'Total Bond Market', 500, 11.03
end

my_roth = Rebalance::Account.new 'My Roth' do
  fund 'VISVX', 'US Small Cap Value', 200, 13.96
  fund 'VGSIX', 'Real Estate', 100, 17.30
  fund 'VTSAX', 'US Total Market', 300, 29.02
  fund 'VPACX', 'Pacific', 300, 8.96
  fund 'VEURX', 'Europe', 50, 21.46
end

my_traditional_ira = Rebalance::Account.new 'My Traditional IRA' do
  fund 'VTSAX', 'US Total Market', 500, 29.02
  fund 'VMMXX', 'Cash', 2500, 1.00
end

accounts_to_rebalance = Rebalance::Rebalancer.new(target, wifes_roth, my_roth, my_traditional_ira)
accounts_to_rebalance.rebalance
accounts_to_rebalance.print_results

This will output:

+--------------------------------------------------------------------------------------------------+
|      Account       | Fund  |        Asset Class        | Price  | Amount To Buy | Amount To Sell |
+--------------------------------------------------------------------------------------------------+
| Wife's Roth        | VIPSX | Inflation-Protected Bonds | $14.36 | $461.05       | $0.00          |
| Wife's Roth        | VBMFX | Total Bond Market         | $11.03 | $0.00         | $4,044.40      |
| Wife's Roth        | VEURX | Europe                    | $21.46 | $3,583.35     | $0.00          |
| My Roth            | VISVX | US Small Cap Value        | $13.96 | $0.00         | $646.31        |
| My Roth            | VGSIX | Real Estate               | $17.30 | $1,699.74     | $0.00          |
| My Roth            | VTSAX | US Total Market           | $29.02 | $0.00         | $10,880.91     |
| My Roth            | VPACX | Pacific                   | $8.96  | $4,962.98     | $0.00          |
| My Roth            | VEURX | Europe                    | $21.46 | $2,973.13     | $0.00          |
| My Roth            | VBMFX | Total Bond Market         | $11.03 | $1,891.37     | $0.00          |
| My Traditional IRA | VTSAX | US Total Market           | $29.02 | $2,500.01     | $0.00          |
| My Traditional IRA | VMMXX | Cash                      | $1.00  | $0.00         | $2,500.00      |
+--------------------------------------------------------------------------------------------------+

License

(The MIT License)

Copyright (c) 2012 Bryce Thornton

Permission is hereby granted, free of charge, to any person obtaining a copy of this software and associated documentation files (the 'Software'), to deal in the Software without restriction, including without limitation the rights to use, copy, modify, merge, publish, distribute, sublicense, and/or sell copies of the Software, and to permit persons to whom the Software is furnished to do so, subject to the following conditions:

The above copyright notice and this permission notice shall be included in all copies or substantial portions of the Software.

THE SOFTWARE IS PROVIDED 'AS IS', WITHOUT WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO THE WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT. IN NO EVENT SHALL THE AUTHORS OR COPYRIGHT HOLDERS BE LIABLE FOR ANY CLAIM, DAMAGES OR OTHER LIABILITY, WHETHER IN AN ACTION OF CONTRACT, TORT OR OTHERWISE, ARISING FROM, OUT OF OR IN CONNECTION WITH THE SOFTWARE OR THE USE OR OTHER DEALINGS IN THE SOFTWARE.