Friday, July 15, 2016

Stock Markets Hit a New Record - Time to Rebalance Your Portfolio

The stock markets in the USA are hitting new records, 18,000+ for the Dow Jones etc.  This happens about once a decade or so, and is unpredictable.  It means your stocks, ETFs, Equity Mutual Funds are probably at all time highs as well.

You probably have a desired portfolio allocation for stocks, bonds, international stocks, cash, etc.  Check your holdings and you will probably find you are over-weighted in stocks because of the price rise.

So now is a good time to rebalance your portfolio if your allocation is out of balance by more than a few percent.  Sell those winning domestic equity holdings, buy bonds or international stocks or whatever you are underweight.  This means take some of your winnings off the table.

This technique of keeping a balanced portfolio is recommended by Warren Buffet, Vanguard, Fidelity, and most other respected investment authorities.

Disclaimer: this is not professional investment advice and should be used at your own risk. The author is not a licensed financial advisor. You should not believe everything on the Internet including this blog and should check multiple sources possibly including a professional financial advisor before making decisions.

Photo credit: flickr

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