The Balancing Act
Ninad RamdasiCategories: DSIJ_Magazine_Web, DSIJMagazine_App, Letters to Editor, MF - Letter to Editor, Mutual Fund
Your special report titled ‘Pros and Cons of Rebalancing a Portfolio’ was quite enlightening.
Your special report titled ‘Pros and Cons of Rebalancing a Portfolio’ was quite enlightening. But how does one know when is it a good time to rebalance? - Ravindra Kadam
Editor Responds:
If you are planning your financial goals (core portfolio), then rebalancing it annually makes more sense. However, if you are building a portfolio for wealth creation (satellite portfolio) then rebalancing tactically makes more sense. Simply buying and holding increases the risk as over the long-term allocation drifts more towards equity which is more volatile than debt.