Investment Portfolio Rebalancing

The process of rebalancing investment portfolios is essential as it preserves your target asset allocation over time.

Portfolio rebalancing is simply the process of returning your asset weightings to their original percentages to maintain the intended diversification. For example, if you start with a typical 60/40% equity to bond weighting and the equity percentage grows to 65%, this weighting would be adjusted back to 60%.

Such a rebalancing investment strategy also occurs within categories. For example, within equities, key sectors such as large cap, mid cap, small cap, and international would be rebalanced to original percentages.

At Cary Stamp & Co., your accounts are monitored regularly to ensure that rebalancing occurs when needed. Some portfolios, depending upon the platform and type, are rebalanced automatically. By deploying a regular rebalancing investment strategy, we alleviate the tendency for “portfolio drift” that strays from your target diversification.

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