Introduction to Portfolio Rebalancing Portfolio rebalancing is an essential practice in maintaining the alignment of an investment portfolio with an investor's financial goals and risk tolerance. It involves periodically adjusting the weights of different assets within a portfolio to return to a target asset allocation. As market conditions change, the values of assets fluctuate, potentially altering the risk and return characteristics of the portfolio. Advanced rebalancing techniques help investors optimize their portfolios, minimize risks, and capture new opportunities. This article explores various advanced portfolio rebalancing techniques that investors can use to enhance the performance and stability of their investments. Strategic Rebalancing vs. Tactical Rebalancing Rebalancing strategies can be broadly categorized into strategic and tactical approaches. Strategic rebalancing focuses on maintaining a long-term target asset allocation, while tactical rebalancing seeks to capi...
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