How Did 2020 Affect Your Portfolio?

You know that your investment portfolio is not a set and forget process. Each portfolio will change over time based on factors like risk diversification, your personal goals, and changes in the market. 

This is especially true after 2020 and all the changes that happened within the stock market during the last year. It could be time for you to rebalance your portfolio.

What is rebalancing? 
Rebalancing your retirement portfolio is exactly what it sounds like. It’s a slight restructuring of your portfolio after there has been a large change in the market or during routine maintenance of your assets. 

Why is rebalancing important?
When your investment portfolio gets out of balance (and it will), it leaves you exposed to unexpected risk. Rebalancing helps fix the gaps in your portfolio left behind by market changes. 

This isn’t about reading the market and choosing the perfect time to finesse your assets. It’s about deciding if your assets are still within a comfortable threshold of change. 

How often should you rebalance?
Rebalancing isn’t an every day process. In fact, balancing too often can have some larger consequences. Once a year, towards the beginning of the calendar year, should be enough to keep your portfolio in check. 

If you’d like to further discuss your current strategy, please contact the office.

^{This communication is designed to provide accurate and authoritative information on the subjects covered. It is not however, intended to provide specific legal, tax, or other professional advice. For specific professional assistance, the services of an appropriate professional should be sought.}

^{Re-balancing may be a taxable event. Before you take any specific action be sure to consult with your tax professional.}