Why is rebalancing the asset allocation important?
Rebalancing maintains a client’s original investment strategy and risk profile. Allocating assets in multiple asset classes results in certain investments outperforming others over time. Annual rebalancing shifts exposure from over-valued assets to under-valued assets based on their market performance. This reinforces our buy low/sell high strategy. Rebalancing should occur whenever a client needs to adjust their risk profile. Financial circumstances can change based on numerous factors including the timing of tuition bills, health care payments, date of retirement, sale/purchase of a major asset, or receipt of an inheritance.
