Hi, my name is Russ Campbell and I am a Certified Financial Planner™ professional at ProVise Management Group. One of the questions we frequently hear is, “Why do I need to rebalance my portfolio and how often do I need to rebalance?”
Choosing the different investments that make up a portfolio is called asset allocation and selecting different assets helps lower the portfolio’s overall risk. Investors typically try to balance their investment risk with their long-term expected return. Over time, some investments will outperform others and the portfolio gets out of balance, which could add risk. Therefore, it’s important to periodically rebalance the portfolio to its long-term target allocation, typically at least once per year.
If you’re unsure about your risk tolerance or asset allocation, a CFP® professional can help you determine if your portfolio needs to be rebalanced and help you take the necessary steps to do so. Ready to talk to a CERTIFIED FINANCIAL PLANNER™ professional about rebalancing your investment portfolio? Our ProVise team is here to help.