Lesson 5.0

Portfolio Rebalancing (Intro)

Portfolio Rebalancing is the process of rebalancing the weightings of a portfolio of investments. Rebalancing involves periodically buying or selling assets in a portfolio to maintain an original desired level of asset allocation; typically a 50/50 allocation, but it can also be anything else (example: 70/30 or 40/60 allocation).

Often, portfolio rebalancing is used to limit risk. Typically, as equities (aka stocks) will vary more dramatically in comparison to fixed income assets (aka bonds); the percentage of assets in relation to equities will change frequently with market conditions.  Portfolio rebalancing is a great tool for more risk averse individuals. 

Surprisingly, portfolio rebalancing is quite easy! Knowing how to rebalance a portfolio is a great life skill as it empowers the students with the ability to do this themselves! Being able to rebalance a portfolio can save an individual thousands a year in fees. 

1 | 1.1 | 1.2 | 1.3 | 2 | 2.1 | 2.2 | 2.3 | 2.4 | 3 | 3.1 | 3.2 | 4 | 4.1 | 4.2 | 4.3 | 4.4 | 4.5 | 4.6 | 5 | 5.1 | 5.2


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