Rebalancing is the process of realigning the weightings of a portfolio of investments. Rebalancing involves periodically buying or selling assets in the portfolio to maintain the desired level of asset allocation.
Rebalancing is primarily about risk control, or making sure a portfolio is not overly dependent on the success or failure of one investment or an asset class. No one investment style stays in favour forever. A disciplined approach to rebalancing helps investors keep emotions away from their decisions and reap the full rewards of diversification by trimming back on winners to buy laggards, protecting gains, and positioning the portfolio to benefit from a change in the market’s favourites over time.
How often are Invisor portfolios rebalanced?
Our portfolio management team rebalances a portfolio whenever investments increase or decrease in value causing their weights to fall outside of the tolerance range established in the investment plan.
We review portfolios with our clients on an annual basis to ensure each portfolio is suitable.