Rebalancing your portfolio can help maintain a proper asset allocation from "summary" of The Little Book of Bull Moves in Bear Markets by Peter D. Schiff
To ensure that your investments are properly diversified, it is essential to periodically review and adjust your portfolio. This process, known as rebalancing, involves selling assets that have grown too large a percentage of your holdings and using the proceeds to purchase investments that have become underrepresented. By doing so, you can maintain a balanced allocation of assets that aligns with your investment goals and risk tolerance. Rebalancing your portfolio can help prevent your investments from becoming too heavily weighted in a particular asset class, such as stocks or bonds. This is important because different asset classes have varying levels of risk and return potential. For example, stocks tend to offer higher returns over the long term but also come with greater volatility, while bonds are typically less risky but provide lower returns. By rebalancing, you can ensure that you are not overly exposed to the risks associated with any si...
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