This may mean different things to different folks on Wall Street, but to us, it means the systematic reallocation of an investment portfolio that has strayed from its target allocations. At the most basic level, a portfolio comprised of a stock fund and a bond fund, with a normal allocation of 60% and 40%, respectively, that has strayed to 63% and 37%, respectively, would have 3% moved from the stock fund to the bond fund.
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.
All investing involves risk including loss of principal. No strategy assures success or protects against loss.
Please note that rebalancing investments may cause investors to incur transaction costs and, when rebalancing a non-retirement account, taxable events will be created that may increase your tax liability.