Rebalancing your portfolio: How to rebalance
What is rebalancing and why is it important?
Rebalancing refers to making adjustments to your portfolio when your preferred asset allocation has shifted and is an important tool to keep you from straying too far from that asset mix. There are many reasons to make changes to your original investment plan. If something has changed with your overall goals or with your life circumstances, you should check your asset mix and see if it still works for you.
For example, your investment time horizon is always getting shorter. An asset mix that worked for a goal originally 20 years away might not be appropriate when your goal is now only 5 years away.
The amount you want to save may change, too, if you decide you need less or more than…
