Automatic rebalancing of social pie

Hi Trading212,
Are you going to add a feature to automatically rebance the pies that I’m copying each time the pie owner rebalance them? I think this would be a game changer feature that would facilitate a lot the copiers (it would become a sort of etoro social copy if you add this)…please let us know if this something you have in program or not (and if yes, when is it’s eta) thank’s

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I would think not as it should always be on the pie owners responsibility to make decisions for their own investments. social trading as seen on etoro has really big issues associated with it, not least that you end up making poorer more than the owner due to time and volume differences but also because the only reason for someone to share their activity is to make an earning from it.

a lot of the feature development has been aimed at making it easier for people to get involved with investing in their future and social trading takes the decisions away from you completely.

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It is worth remembering that rebalancing is a costly activity since it involves losing money on the buy/sell spread. It should not be important to rebalance frequently. Major ETFs do it only quarterly.

Suppose you have one investment at 5% weight and another at 6% weight. Suppose they grow by 5% and 4% over the quarter. If you had neglected to rebalance to 6% and 5% you will have “lost” 1% of 1% = 0.01%. But maybe they might have grown by 4% and 5%, in which case you have gained by not rebalancing.

I was even planning it only once a year. Any ideas if more frequently is better?

I would think that yearly is fine. Typically wealth managers do an annual review with their clients and suggests positions to trim and ones to increase. There is no good reason to think that stocks that have done poorly (and are so now underweight) are the right place to put new money compared to stocks that have done well (though “Dogs of the Dow” strategy is like that). Nor should I necessarily sell the stocks that have done well.

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what’s about ARK invest etfs? They are constanly re-balanced…