Rebalancing your investment portfolio is a crucial aspect of maintaining a well-diversified and risk-managed investment strategy. Over time, market fluctuations can cause your portfolio's asset allocation to drift away from its original target, potentially exposing you to unintended risks. Rebalancing helps realign your portfolio with your financial goals and risk tolerance. In this comprehensive article, we will explore the importance of rebalancing, when to rebalance, and practical steps for rebalancing your portfolio effectively. Understanding Portfolio Rebalancing Portfolio rebalancing involves adjusting the allocation of assets in your investment portfolio to maintain your desired asset mix. This process typically involves selling overperforming assets and buying underperforming ones to restore the original asset allocation. Rebalancing helps ensure that your portfolio remains aligned with your investment objectives and risk tolerance. Key Principles of Portfolio Rebalancing A...
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