Welcome to a new week and a new theme here on the One Minute Retirement Tip! 

This week I’m talking about how to rebalance your investment portfolio. I’ll be talking about why it’s so important to rebalance, the 3 steps I take whenever I rebalance a portfolio (which I have done literally thousands of times), and how to know when you should rebalance. 

Rebalancing is the process of realigning your portfolio back to its intended position. We all get a little out of what sometimes. Last year my daughter dislocated her thumb and we had to go to the doctor to have him pop her thumb back in place. After a couple weeks of wearing a cute little splint, she was as good as new. If you don’t keep close tabs on your investment portfolio, it can get out of whack too. 

The overall proportion of stocks can get bloated, especially when the stock market is up over 300% from it’s low in March 2009, just 10 years ago. If you haven’t rebalanced in the last few years or at all since March of 2009, you could have way more in stocks than you realize and be taking on way more risk than you should. 

Many people go years without rebalancing their portfolio. This is especially a problem if you have money in an old 401k or an account that you don’t watch closely, where you tend to just set up the investments once and then just glance at your statement once a year without ever bothering to review your investment strategy and rebalance. 

If this sounds familiar, this week’s tips are for you. Because that’s where rebalancing comes in. When you pay attention to your investments and realign your portfolio when it gets out of whack, it can make a meaningful difference to your long-term returns. 

A recent study by Vanguard determined that rebalancing a portfolio adds about .26% annually to the return of your portfolio compared to not rebalancing. A quarter of one percent doesn’t seem like much but when you add that up over 20, 30, or 40 years of investing, we’re easily talking a difference of 6 figures in portfolio value over time for many of you. 

So stick around this week as I cover a critical topic to successful investing, and I show you the steps I’ve taken thousands of times to rebalance a portfolio. 

That’s it for today, thanks for listening. My name is Ashley Micciche...and this is the One Minute Retirement Tip. 

----------

>>> Subscribe on iTunes: https://apple.co/2DI2LSP

>>> Subscribe on Amazon Alexa: https://amzn.to/2xRKrCs

>>> Check out our blog: https://truenorthretirementadvisors.com/blog/

----------

Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance, wealth management, fee only financial advisor, financial planner, financial podcast, retirement podcast, financial independence podcast, how to rebalance your portfolio, portfolio rebalancing strategies, how to rebalance portfolio, should you rebalance your portfolio, how to rebalance your portfolio without paying taxes, how to rebalance your mutual fund portfolio, balanced portfolio by age, automatic rebalancing, selling funds in 401k