TuringTrader portfolios rebalance on a regular schedule; some daily, others weekly, and a few monthly. However, the asset allocation displayed on the site fluctuates daily. This article explains why.
Daily Price Fluctuations
As assets are traded at the stock exchanges, their prices fluctuate. And even though assets of the same asset class are often highly correlated, no two assets behave the same. As a result, a portfolio's asset allocation, measured as a percentage of the total portfolio value, fluctuates, even when the number of shares per asset stays the same.
This explains why TuringTrader recalculates all portfolios daily, even when their rebalancing schedule is slower than that. TuringTrader's dashboard accommodates these fluctuations, and will only mark those accounts as needing rebalancing, where the target number of shares changed.
Backadjusted Quotes
TuringTrader's portfolios aim to make the most out of your investments. To do so, our strategies make assumptions about future returns within the investment universe and pick the most promising candidates. To compare the instruments fairly, it is important to properly consider stock splits, dividends, and interest paid.
The industry-standard mechanism to do so, is to backadjust the quotes, so that the time series of prices reflects all corporate actions, and payments. Unfortunately, this process is complex and induces additional complications. As a result, our asset allocations sometimes shift, even when the strategy was not due for rebalancing. Curious investors can learn more about this in our detailed background article.