What is Portfolio Rebalancing and why is it important?
Portfolio rebalancing is the process of periodically shifting the proportions of the various asset classes and investments within your portfolio in order to realign them with the original target asset allocation identified in your Investment Policy Statement. Asset classes do not always move in tandem and, as a result of market movements, your asset allocation may deviate from the original target identified in your Investment Policy Statement. Periodic portfolio rebalancing maintains your target asset allocation to ensure your investment portfolio is consistent with your objectives and tolerance for risk.
