Why rebalance a portfolio? For three reasons:
- You experienced life events changes. As a consequence, when you retake the risk assessment, you may find that your risk tolerance has changed.
- Stocks and bonds' prices went up or down. As a consequence, our asset allocation percentages deviated from your target levels.
- You have new money to invest. This will be the time to check your portfolio's performance and see how it has deviated from your original target, then allocate the new money accordingly.
The following online rebalancing tool can help you decide which action - buy or sell - to take to which asset category.