Rebalance your portfolio regularly to maintain diversification from "summary" of Random Walk Guide To Investing by Burton G Malkiel
Regularly rebalancing your portfolio is essential to ensure that you maintain diversification. Diversification is the concept of spreading your investments across different asset classes to reduce risk. Over time, the value of your investments may change, causing your portfolio to become unbalanced. For example, let's say you initially allocated 60% of your portfolio to stocks and 40% to bonds. If the stock market performs well and the value of your stocks increases significantly, the proportion of stocks in your portfolio may rise to 70% while the proportion of bonds falls to 30%. This increased exposure to stocks may expose you to higher risk than you are comfortable with. To maintain diversification and manage risk, you should periodically review your portfolio and adjust your asset allocations. By selling some of your overperf...
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