Do you need to rebalance your portfolio?

February 16 2018


Crafting the right investment mix is both an art and a science. Not only do you have to consider your future goals, but you also have to take situational factors into account, like your risk tolerance and the current market conditions. To make sure your portfolio keeps its custom fit, it may help to rebalance on a regular basis.

Think of it as a "checkup."
Rebalancing is akin to your annual physical, and the one-year interval is a sweet spot of sorts. This will encourage a regular rhythm to keep you engaged with the process and reduce the temptation to make long-term changes based on short-term emotional reactions. Some years may not call for much action, whereas others may see new dreams develop or goals shift, thus prompting a tweak to your portfolio.

Does your mix still match?
It's easy to feel complacent during a historically long bull market, but high gains might mean you're holding more stock than your portfolio initially intended. Asset classes do not move uniformly, and over time they deserve a second look so your actual holdings are not over- or underallocated compared to your original investment mix percentages.

Life happens.
Are you expecting a baby or helping a child pay for college? Chances are, this will affect your nest egg plans. Are you approaching retirement? It might be time to dial down risk in favor of more security. As your life continues to evolve, so should your portfolio.

Please reach out if you have any questions.

"Rule No. 1 : Never lose money. Rule No. 2 : Never forget Rule No. 1." Warren Buffett

"I try not to borrow, first you borrow then you beg." 
  Ernest Hemingway