Prepping to Pull the Trigger

My portfolio is about as eventful as it gets right now — I’m on the verge of a threshold rebalance. My Vanguard Developed Asia Pacific fund is flirting with my 15% rebalance trigger, sitting at -14% as of Friday evening.

What makes this one interesting is that I’m sitting on an unusually large cash balance in my money market fund. Right now it’s actually my star performer — the only holding in the green. Bonds are a close second, barely 1.5% off their peak. So I have a genuine choice: do I use cash or bonds to rebalance back to target?

Here’s where it gets a bit murky though. That cash isn’t really part of my portfolio in any meaningful sense — it’s proceeds from a business sale, and it was never factored in when my retirement portfolio was stress tested before I retired. It sits outside the plan entirely, essentially surplus money beyond what I need. Which raises the question of whether it should even be in the rebalancing conversation at all.

The Asia Pacific and bond funds are both in tax-advantaged accounts, so no capital gains headaches there. The money market fund is after-tax, but selling from it won’t affect my tax situation either way. No gotchas on that front.

This is new territory for me — I’ve never had a cash position like this before, and the fact that it technically lives outside my retirement plan makes the decision less obvious than it first appears. Curious what others think: cash or bonds for the rebalance?