Rebalance your portfolio regularly from "summary" of Common Sense on Mutual Funds by John C. Bogle
Rebalancing your portfolio regularly is a crucial aspect of successful investing. As you allocate your assets across different asset classes, such as stocks, bonds, and cash, the relative values of these investments will change over time. The prices of stocks and bonds fluctuate daily, which can lead to a situation where your portfolio becomes skewed towards one asset class. For example, if the stock market experiences a significant rise in value, the percentage of your portfolio invested in stocks will increase. This shift may expose you to higher levels of risk than you are comfortable with. On the other hand, if the bond market performs well, your portfolio may become too conservative, potentially limiting your returns. To maintain your desired risk profile and investment objectives, it is essential to rebalance your portfolio periodically. By selling assets that have appreciated in value and buying assets that have underperformed, you can reali...
Similar Posts
Understand the connection between health and wealth
In order to truly thrive and achieve prosperity, it is essential to recognize the undeniable link between our physical health a...
Index funds offer broad market exposure
Index funds are designed to provide investors with a simple, low-cost way to gain exposure to a wide range of securities in a p...
Understand the concept of compounding and its impact on returns
Compounding is a fundamental concept in investing that is often overlooked or misunderstood by many investors. It is the proces...
Behavioral biases affect financial decisionmaking
When it comes to managing money, humans are not always rational beings. In fact, we often make financial decisions based on our...
Avoid highcost funds
When you are investing in mutual funds, one of the key things to keep in mind is the cost associated with the fund. High-cost f...
Avoid comparison with others and focus on your own journey
When we constantly compare ourselves to others, we lose sight of our unique path and goals. It's easy to get caught up in the s...
Consider the impact of taxes on your investment returns
When investing, it is essential to keep in mind the impact that taxes can have on your investment returns. Taxes can erode the ...
Market inefficiencies can be exploited by savvy investors
The stock market is a place where investors buy and sell securities in the hopes of making a profit. However, not all investors...
Avoid impulse buying
Impulse buying is the enemy of financial success. It's that sudden urge to purchase something on a whim, without carefully cons...
Ignore the daily fluctuations of the stock market
As a wise investor, it is crucial to understand the nature of the stock market and how it operates. One of the fundamental prin...