What percent of stocks should sell to move into bonds

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Question 1: You decide to implement a passive strategy, targeting and initially holding 60% in stocks and 40% in bonds. If during the year stocks go up 10% and bonds go up 4%, what % of your stocks should you sell to move into bonds when re balancing at the end of the year?

Question 2: Alternatively, assume you initially formed the portfolio with a $1000 investment. If you were investing an additional $500 during the rebalancing period, how much would you need to put into bonds (with the remaining being put into stocks) to be in balance?

Reference no: EM132506099

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