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Does My Portfolio Need to be Rebalanced?

  • admin
  • April 4, 2019

The ideal investment portfolio is one that is appropriately diversified across a range of asset classes. Even the most passionate of investors may find that they’ve become passive in their investment strategy and may need to leverage the expertise of an experienced consultant to rebalance their portfolio to most effectively reach their wealth management goals. How then can you determine if your investment portfolio needs to be rebalanced?

Acknowledging Limited Asset Classes

A great first step to determining whether rebalancing your portfolio is necessary is to get a lay of the land. Look to what asset classes you’re currently invested in within your investment portfolio. Is all of your money in real estate, bonds, or stocks? Regardless of which asset class you’re currently zeroed in on, you’re taking a gamble by exposing yourself to more risk than you may be comfortable with. Diversifying across asset classes, and within each asset class, is an effective strategy for limiting your risk.

Considering Risk Tolerance

It’s very likely that your risk tolerance will change over time, rebalancing your portfolio is an appropriate step to ensure your asset allocation reflects risk tolerance appropriate to your goals.

Assessing Goals

Consider when you last rebalanced your portfolio. If it’s been more than a year, it’s possible that your goals may have changed. Are you in a time of transition in your life? If you’re expecting any major life changes, such as an addition to the family, or nearing close to retirement – it’s likely time to consider a rebalance.

If you need support determining and reaching your preferred asset allocation levels, don’t hesitate to reach out to us. The Metroplex Wealth Management team can help you determine whether a portfolio rebalance is needed to get you closer to your wealth management goals.

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