Rebalancing is a fancy term for making sure your portfolio maintains its target allocation over time (click here for info on considerations to determine your ideal allocation).
For example, let’s say that you decide that your ideal investment allocation is 70% risk assets (equities/alternatives)/30% low risk assets (fixed income/bonds/cash).
If the risk assets perform well, you will need to sell some of them to maintain your target allocation. Inversely, if they do poorly, you will need to buy more. Easy in theory, hard in practice. As is the case with most things in life, discipline and a plan that you can follow is the best way to ensure that your investments don’t go too far off course.
Here are five keys to keeping things on track:
Want to learn more about rebalancing your portfolio? Schedule a call with us.
This material has been prepared for informational purposes only and should not be used as investment, tax, legal or accounting advice. All investing involves risk. Past performance is no guarantee of future results. Diversification does not ensure a profit or guarantee against a loss. You should consult your own tax, legal and accounting advisors.
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