Do you know what your portfolio should be doing? You may think that you do but you need to take time to rebalance your portfolio and figure out a portfolio that is right for you. Financial professionals Joe Anderson and Alan Clopine explain how your portfolio might drift and the importance of rebalancing it. To hear a more in-depth discussion watch Your Money Your Wealth Show #509 on Investor Boot Camp.
Alan: You’ve got your portfolio set up just how you want to. That’s great. But it doesn’t stay that way it drifts and when it drifts, you got to take a look at it maybe now you have a riskier portfolio or less risky portfolio than really you want for you. So, you got to keep checking this thing, and you need to rebalance as appropriate, Joe.
Joe: Right, you’re going to see drift in your portfolio where you want a certain dollar figure, right. Three years you got 45%, oops and then now, a couple more years, now you got 52% in that asset class when maybe you only wanted 25 or 30% to begin with. You got to keep on this. You’ve got to tax manage it. And then, of course, manage your overall risk.