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As cash is added to the your account, the cash holding percentage will increase while all other asset classes will decrease as a percentage. The change in asset percentages will bring the client’s account out of sync with the model, and transactions will need to take place to realign it.
Whether or not we transact will depend on how out of sync the account is compared to the model. For example, adding $1,000 to a $1M account will not move the needle but adding that amount to a $10K account will. We will use the excess cash to buy more holdings and realign the account to the model.
We will generally buy the underlying ETFs one business day following the receipt of added funds appearing in your brokerage account.
Keep in mind, your InvestSMART account updates each day on the closing balances from the day before.