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 investment success.

Main Questions Asked:

• What should your asset allocation be right now?
• What are the risks of not having a properly diversified portfolio?
• How can you find the optimal balance between stocks, bonds, and cash?

Key Lessons Learned:

Rebalancing Your Portfolio

• Rebalancing your portfolio can’t be oversimplified.
• Your situation is unique, and you shouldn’t be treated like everyone else.
• 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 reviewed consistently.

Consequences of Not Having Proper Asset Allocation

• 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 in.
• There is also upside risk when people don’t get back in the market.

Events That Trigger a Need to Rebalance Your Portfolio

• A major shift in the stock market whether it is up or down.
• Age may be a factor. As you age your appetite for risk will change.
• 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 rebalance.

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

1-800-757-0436

When To Rebalance Your Portfolio

Thank you for listening!