Static allocation
Static Allocation (often called Dollar-Cost Averaging / DCA) means you pick target weights up front (e.g., 60% equity, 40% bonds) and add new money in those proportions at a fixed cadence (e.g., monthly). You generally don't react to short-term market moves; optional rebalancing happens on a fixed schedule (e.g., annually) or threshold.
One-liner: Decide your mix once; keep buying it on schedule.
Benefits vs cons
| Benefits | Cons |
|---|---|
|
Less is best: reduces over-reaction to market noise. Sticks to plan: contributions happen regardless of headlines. Low effort: automate and forget. |
Drift over time: outperforming assets dominate if you never rebalance (e.g., with shares compounding at 10% vs bonds at 5%, a 50/50 input can drift toward ~30/70 after 30 years without rebalancing). Doesn't "buy the dip": buys happen on schedule, not signal. |
DCA: Invest a fixed $ (or % of income) on a fixed schedule, regardless of price.
Drift: Portfolio weights diverge from target as assets grow at different rates.
Rebalance: Sell/buy to restore target weights, on schedule or threshold.
Process Flow
Loop behavior for Static: Mostly (6) Buy each period; optionally (5) Sell + (6) Buy at your chosen rebalance cadence.
Common Static Plans
Who: Very long horizon, high tolerance for drawdowns, strong income stability.
Why: Highest expected long-run return; highest volatility and sequence risk.
Who: Long horizon, wants meaningful growth but some shock absorber.
Why: Keeps most equity upside while reducing drawdown depth/duration.
If unsure, start at 80/20. You can always adjust later.
Example: 80/20 Monthly Contribution
| Month | Contribution | Equity Buy | Bond Buy | Portfolio Value |
|---|---|---|---|---|
| 1 | $1,000 | $800 | $200 | $1,000 |
| 2 | $1,000 | $800 | $200 | $2,020 |
| 3 | $1,000 | $800 | $200 | $3,050 |
| 12 | $1,000 | $800 | $200 | $12,500 |
Static Allocation Simulator
Expected Outcomes (10-year simulation)
Risk Analysis
Percentile outcomes across historical 10-year periods.
Portfolio Mix (50th Percentile)
Median path, broken down by asset contributors.
Important Considerations
- Less is best. Over-tinkering tends to hurt returns; staying systematic helps.
- Past ≠ future. Simulations use history; the next decade can differ.
- Leverage risk. Static allocation works best unlevered; add leverage only with clear rules and risk management.
How to do it with Self Managed
Use the Plan Builder in the app to set target weights, contribution amount, and rebalance cadence.
Data feeds maintain asset returns, distributions, and valuation scores automatically.
The portfolio monitor compares your live portfolio vs targets and suggests monthly buys and scheduled rebalances.
FAQ
Not strictly—but drift grows over time. Yearly rebalancing is a simple default that helps maintain your target allocation.
No. Static allocation works best unlevered; add leverage later only with clear rules and risk management protocols.
The plan still works, but weights may drift faster without regular contributions and rebalancing to maintain targets.
That becomes Tactical allocation; keep this page's default at 0% flex for true static allocation.
Annually is usually sufficient. Major life changes (marriage, children, career shifts) may warrant a review, but avoid frequent adjustments based on market performance.