The final question Mary needs to answer is whether her tolerance for investment risk has changed since she first established her portfolio. If so, then her mix of investments also should be changed to reflect her current situation. If her investment objective, time frame or risk tolerance have changed, then Mary should sit down with her financial consultant to discuss these changes and then construct a portfolio based on these revised parameters. Portfolio rebalancing also can be a good idea because it forces you to sell an investment that may have reached an interim peak and buy other assets with more potential when their prices are lower. Rebalancing is an important tool for investors who take a long-term, disciplined approach to investing and want to create a diversified portfolio based on their personal situation.
Life is a balancing act.
Your portfolio should be no exception. This website is published in the United States for residents of the United States. All rights reserved.