Most investors either don’t rebalance or practice this technique too hastily, which can hurt your portfolio’s performance. Even well-seasoned financial advisors sometimes use poor practices, which could incur unnecessary taxes or fees.
No matter where you are on your investing journey, this complete tutorial will have some tactics you don’t know. You must learn best practices and avoid common mistakes to maximize your wealth.
Portfolio Rebalancing is a process used to minimize overall risk by adjusting asset allocations from portfolio drift levels back to ideal allocation targets.
This investment strategy seems reasonable and has become a foundation among financial advisors. However, the process requires investors to sell some overperformers and buy more underperformers.
Intelligent advisors often tiptoe around profits in taxable accounts by mentioning them as a consideration, yet they often still toe the industry line and convince investors it is vital.