How to Rebalance Your Wealth Portfolio and The Right Time For It

• Market fluctuations can throw your asset allocation off balance, increasing risk exposure. 

• Regularly rebalancing ensures your portfolio stays aligned with your long-term financial goals and risk tolerance.

• Life events like career shifts, family growth, or approaching retirement can also change your financial goals, requiring you to rebalance your portfolio. 

• Review your current allocation, compare it to your target, and buy or sell assets to restore balance. 

Building a strong investment portfolio doesn’t only involve choosing the right asset. It is also about managing different assets consistently to stay on track with your financial goals. 

Market fluctuations can throw your asset allocation off balance, which is why making strategic adjustments is key. Rebalancing your portfolio helps realign your investments and optimise capital allocation to keep your financial plan steady. 

Rebalancing your financial portfolio ensures that it remains aligned with your risk tolerance and investment objectives. Market changes can cause your asset allocation to shift, possibly increasing your risk appetite. 

Regular rebalancing helps restore balance, keeping your portfolio on track to achieve your long-term financial goals.

Rebalancing your financial portfolio involves maintaining asset allocation by adjusting investments. It ensures alignment with your risk tolerance and long-term objectives, preventing any asset class from dominating. 

By managing allocation, you can optimise returns and divide more resources based on your risk preference. If you can handle a high-risk appetite, you can choose aggressive rebalancing. However, for low-risk acceptance, you can go for conservative allocation into different classes.

Rebalancing is necessary from time to time to save yourself from unforeseen risks, such as market fluctuations. Also, due to life changes, your financial goals can change, leading you to change your strategy to ensure long-term goals. 

Market changes and life events are two main triggers to rebalance that enable you to rebalance your financial portfolio.

Market fluctuations can cause shifts in the value of assets in your portfolio, leading to deviations from the original allocation. Rebalancing helps you adjust to market changes and maintain allocations for long-term goals. 

As you progress through life stages, your investment objectives and risk tolerance may evolve. Whether growing your career or starting a family, rebalancing keeps your portfolio aligned with your goals. 

Through these adjustments, you can ensure that investments remain aligned with changing goals. These factors help you understand when to rebalance your portfolio to make adjustments. 

To rebalance your portfolio, assess your ideal allocation based on goals and risk tolerance. Here are the steps on how to rebalance investments through selling, buying and realigning.  

1. Identify your desired asset allocation through the identification of your financial goals and risk acceptance.

2. Determine how much you want to invest in different asset classes.

3. Review your current asset allocation and compare it with your desired investment plan. 

4. Assess the assets that are underweight or overweight.

5. Consider buying or selling your assets to align them with your desired investment plan. 

6. When making changes, consider your tax implications.

7. After making changes, monitor and review your portfolio on time.

For long-term success, consider rebalancing your portfolio promptly. You can do this at predefined intervals and schedule automatic rebalances. Here are some important portfolio adjustment tips:

• Most investment platforms let you set up alerts that notify you when your portfolio shifts from your target allocation. This helps you rebalance promptly without the need to monitor your investments constantly. 

• You can also rebalance on a set schedule, like every three or six months, to keep your portfolio aligned with your goals.

1. Why is rebalancing important for my portfolio?

Rebalancing is important for your portfolio as it helps you align with your future financial goals as per your risk tolerance. 

2. How often should I rebalance my investments?

You may rebalance your portfolio on a fixed schedule, like every 6 to 12 months, to keep your portfolio aligned with your needs, risk exposure, and goals. 

3. Do I need professional help to rebalance?

Sometimes, you may require a professional to ensure the right alignment for different asset classes.

4. What if my portfolio drifts only slightly?

If your portfolio drifts only slightly, it is fine to review and rebalance it later. However, if it becomes significant, reallocate it quickly. 

5. Can rebalancing improve my returns?

Yes. Rebalancing can help increase your returns based on the allocation and market dynamics.

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