Back to Finance Tips
After a few weeks of exploration, I’m going to bring it back to It Can Be Easily Done’s bread and butter: actionable personal finance tips to help you master your mental game of finance. This one is about portfolio rebalancing and it’s going to be short and sweet.
Strike the Right Balance
If you’re not familiar, rebalancing is the concept of choosing a target portfolio allocation (say 75% stocks and 25% bonds or 60% U.S. stocks and 40% international stocks or whatever portfolio strikes your fancy) and then making trades over the course of time to make sure that your portfolio stays at the target allocations. These trades usually come at a regular time interval (e.g. monthly) or when the actual portfolio allocation deviates from the target by more than some percentage.