Tuesday, August 5, 2014

Did You Rebalance?

A few weeks ago, I wrote about rebalancing your portfolio since it was mid-year, and the stock market was up since the start of the year.  I hope you followed my advice, as the market has suffered losses since then and is basically flat or down now compared to January.  Keep in mind, 88% of your portfolio's movement comes from your allocation, versus only 12% for timing and picking stocks (see below).

Whatever you decided, it is still a good idea to rebalance your portfolio so you hold a diversified portfolio of low cost index stock, bond, and international funds along with a safety stock of cash.  There are plenty of articles on the internet about what should be your portfolio composition given your age, goals, and risk tolerance.  The following video by Vanguard gives you some good information.

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