Rebalancing

Rebalancing is a strategy that regularly reassesses the asset allocation and cash holdings in a portfolio according to predetermined goals.

This helps keep the composition of a portfolio in line with its objectives, such as capital growth or income generation, and helps minimize risk exposure and take advantage of new opportunities.

By reviewing different types of investments within an overall portfolio and shifting money from sections that have exceeded their target proportions back into those that have dipped below them, savvy investors can work to maintain optimum performance over time.