Oct 27, 2017
Learn how to make sure that you have the proper mix of stocks,
bonds, real estate, and cash in your portfolio. Having the proper
mix of these assets or asset allocation is the key to long-term
Main Questions Asked:
- What should your asset allocation be right now?
- What are the risks of not having a properly diversified
- How can you find the optimal balance between stocks, bonds, and
Key Lessons Learned:
Rebalancing Your Portfolio
- Rebalancing your portfolio can’t be oversimplified.
- Your situation is unique, and you shouldn’t be treated like
- Many people are taking unnecessary risk or risk that they are
not even aware of.
- The challenges in the years to come will be more complicated
than anything your parents or grandparents faced.
- You need to have a thorough and thoughtful plan that is
Consequences of Not Having Proper Asset
- The biggest issue is risk. If your portfolio doesn’t match your
tolerance for risk, you could lose a ton of money.
- Don’t overestimate the ability to be analytical when fear sets
- There is also upside risk when people don’t get back in the
Events That Trigger a Need to Rebalance Your
- A major shift in the stock market whether it is up or
- Age may be a factor. As you age your appetite for risk will
- As interest rates begin to rise.
- A change in tax laws.
- A change in inflation.
- If you receive money from an inheritance.
- Early retirement can cause a need for an asset allocation
Approaches to Rebalancing Your Portfolio
- Disciplined rebalancing is setting up a date to rebalance your
portfolio once a year.
- Trigger-based rebalancing is when a rebalance is triggered when
your portfolio gets out of whack by a percentage. Taking some
market winnings and moving them to safe money.
- Life stage based rebalancing is when a drastic change in life
stages happen. Such as getting married or divorced or the last five
years before retirement.
Links To Resources Mentioned
Money Map Retirement Review
When To Rebalance Your Portfolio
Thank you for listening!