About

About Index Rebalancing and Micro-Rebalancing


Where It All Started

Micro-Rebalancing was conceived and developed by an ex-stockbroker using a pen and paper in the Summer of 2020, and real-world testing began in October 2020 until July 2023.

The intent behind the creation of the system was to capture volatility. The results- volatility is a gold mine that, when used properly, can, in essence, "force compounding" to speed up time.

Some real-world results performed in a real account are depicted here, with more being added.

Note: The testing was handicapped by performing Micro-Rebalancing in an account that did not allow partial share trading; therefore, it was not able to profit from smaller than whole share dollar amount shifts. Still, the results speak for themselves and are very repeatable for anyone who wishes to do so.

 

Where Smart ETF Index Investing Meets Mathematical Precision

Ever watched your S&P 500 ETF or the QQQ ETF bounce up and down and wondered, "Is there a smarter way to handle this volatility?" You're not alone. While millions faithfully follow the buy-and-hold mantra with their SPY and QQQ positions, a select group of investors has discovered how to make market fluctuations work in their favor.

Welcome to the world of Index Rebalancing—where disciplined mathematics transforms market volatility from something to fear into your portfolio's secret weapon.

The Evolution of Smarter, Better ETF Investing

Traditional index investing works—and for good reason. Low-cost index ETF funds like those tracking the S&P 500 have democratized investing and created wealth for millions. But what if we could enhance this proven approach without abandoning its core principles?

That's exactly what our system accomplishes through two complementary methodologies:

Micro-Rebalancing (MR): Precision-Engineered Position Management

Micro-Rebalancing takes index ETF investing to its logical next level. This mechanical system:

  • Establishes a fixed Target Allocation (TA) for each position
  • Creates pre-set deviation triggers (typically 1-5%)
  • Executes buy orders when a position falls below its lower threshold
  • Implements sell orders when a position rises above its upper threshold
  • Eliminates emotional decision-making through pure mathematical logic

With zero-commission trading and fractional shares now standard, this once-theoretical approach has become remarkably practical for everyday investors managing positions in popular ETFs like SPY, VOO (also follows the SandP500, and QQQ.

The beauty of Micro-Rebalancing lies in its elegant simplicity: you're systematically buying lower and selling higher without attempting to predict market movements—just responding to them with disciplined precision.

Index Rebalancing (IR): Your Gateway to Enhanced ETF Management

For those new to these concepts, our Index Rebalancing methodology offers a streamlined entry point. Focused specifically on managing core index ETF positions, IR applies simplified Micro-Rebalancing principles to the funds most investors already own.

Think of IR as "Micro-Rebalancing Lite"—fewer position adjustments, wider deviation bands, but still capturing the essential mathematical advantage over pure buy-and-hold.

How Everything Fits Together: The ISM Framework

Both approaches exist within our broader Institutional Style Management (ISM) framework—a comprehensive system that addresses traditional asset allocation across stocks, bonds, and cash, completely spelled out in Investing Made Easy: An Introduction to Institutional Style Management. While ISM handles the "big picture" decisions professional managers have used for decades, Micro-Rebalancing provides the tactical precision tool for maximizing returns within each asset class.

The complete hierarchy works like this:

  1. ISM establishes your foundation (broad asset allocation principles)
  2. Index Rebalancing manages your core ETFs (simplified approach)
  3. Micro-Rebalancing provides advanced optimization (maximum mechanical precision)

Real Results, Not Just Theory

What makes our approach different is our commitment to real-world implementation. We don't just theorize—we execute these systems with our own capital and document every trade confirmation to prove it works exactly as described.

Our proof pages showcase actual trades in positions like SPY and QQQ, demonstrating precisely how systematic rebalancing transforms normal market volatility into a mathematical advantage—no prediction required.

 

Real-World Examples and Proof Page (Multiple Positions): https://indexrebalancing.com/pages/real-world-results

Real-World Results of Micro-Rebalancing SPY ETF (Video)

Ready to Evolve Your Index Investing Approach?

Whether you're managing a modest portfolio of index ETFs or looking to optimize substantial positions, our educational resources provide the framework to enhance what's already working without abandoning tried-and-true investing wisdom.

Start with our entry-level guide to Index Rebalancing- Index Rebalancing: The Smarter Way to Invest in ETFs, or dive directly into the complete Micro-Rebalancing system— The Art of The Micro-Rebalance: The New Financial Frontier, either way, you'll never look at your S&P 500 ETF the same way again.