When It's Time To Rebalance

To be successful over a long period of time, every good investor must continually rebalance their portfolio.

What Is Rebalancing?

Rebalancing is the simple process of analyzing a portfolio every so often, to make sure that the proportion of assets is readjusted to the original target allocation.

As parts of your portfolio grow over time, other parts will become proportionally smaller. Rebalancing corrects the percentages to keep them in line with your original investment strategy.

Without rebalancing, your portfolio will “drift”—just like an unanchored yacht.

When Should I Rebalance?

If there has been a major shift in asset allocation, we may recommend a rebalance to you. Usually, we recommend a rebalance when a portfolio is out of balance by 5 percent overall, or when one specific asset class in your portfolio is out of balance by 25 percent.

We analyze your portfolio regularly to make sure that it is still in line with your original investment goals, and the level of risk you feel comfortable with.

The Tax Implications of Rebalancing

Any change to your portfolio has tax implications. When we rebalance your portfolio, we will make sure to review with you the tax implications of any transactions.

This aggressive tax management will help your investments to perform better over the long term.

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