When and How to Rebalance Your Investment Portfolio

Wealth Decisions by Brian

Is your investment portfolio working as hard as it should be? What if I told you that most investors are leaving money on the table by not rebalancing properly - or worse, rebalancing too often?

In this week's episode, I dive into the science and strategy behind portfolio rebalancing, and I'll share three actionable frameworks that could boost your returns while keeping risk in check.

The three key aspects of portfolio rebalancing: the why, the when, and the how.

First, why rebalance at all? Think of your portfolio like a garden. Over time, some plants grow faster than others, taking up more space than intended. Rebalancing is like pruning – it keeps everything in proportion and ensures no single area dominates the whole.

The fundamental benefit of rebalancing is that it enforces a "buy low, sell high" discipline. When you rebalance, you're essentially selling assets that have become overweight (and thus relatively expensive) and buying assets that have become underweight (and relatively cheaper).

Rebalancing is something many investors get wrong. More frequent rebalancing isn't necessarily better. Each rebalancing event incurs transaction costs and potential tax implications. The key is finding the sweet spot.

For a transcript of today's episode, go to:

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Brian D Muller(AAMS©), Founder, Wealth Advisor

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