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Rebalancing a portfolio is essential for longterm success from "summary" of A Random Walk Down Wall Street by Burton Gordon Malkiel
Investors often overlook the importance of rebalancing their portfolios, but this practice is crucial for achieving long-term success. By rebalancing, investors can ensure that their portfolio remains aligned with their risk tolerance and investment goals. This process involves periodically adjusting the allocation of assets within the portfolio to maintain a desired level of risk exposure. Over time, market fluctuations can cause the original asset allocation to become skewed, leading to an imbalance in the portfolio. Without rebalancing, investors may find themselves overexposed to certain asset classes, increasing their risk levels and potentially jeopardizing their long-t...
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