Rebalance your portfolio as needed from "summary" of I Will Teach You to Be Rich: The Journal by Ramit Sethi
When it comes to investing, one of the most important things you can do is keep an eye on your portfolio. After all, the market is constantly changing, and what was a good investment yesterday might not be the best choice today. That's why it's so important to regularly review and rebalance your portfolio as needed. The concept of rebalancing your portfolio involves looking at your investments and making adjustments to ensure that they still align with your financial goals and risk tolerance. For example, let's say you originally decided on a 60/40 split between stocks and bonds. Over time, as the stock market grows more volatile, you might find that your portfolio is now weighted more heavily towards stocks than you're comfortable with. In this case, you might need to sell off some stocks and buy more bonds to bring your portfolio back into balance. On the other hand, if you find that one particular stock or sector is consistently outperforming the rest of your investments, you might want to consider selling off some of your other holdings and putting more money into the winning investment. This can help maximize your returns and ensure that you're taking advantage of the best opportunities available to you. Of course, it's important to remember that rebalancing your portfolio doesn't mean making changes every time the market fluctuates. Instead, it's about taking a long-term view of your investments and making adjustments as needed to stay on track with your financial goals. By regularly reviewing and rebalancing your portfolio, you can help ensure that you're making the most of your investments and setting yourself up for financial success in the future.
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