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Business, 02.11.2020 16:50 dajahp

Portfolio rebalancing is the process of bringing the different asset classes (stocks, bonds, and cash) back into a proper relationship following a significant change in the value of one or more of them. You should normally rebalance your portfolio once a year to return your investments to the proper balance when they no longer conform to your investment plan. Suppose that you begin an investment program with a portfolio that has an asset allocation of 40% bonds, 40% equities, and 20% cash investments. One year later, some investments have performed better than others. After a year the portfolio now consists of 30% bonds, 60% equities, and 10% cash investments. To rebalance this portfolio back to its original asset allocation, you should sell some of your and use the proceeds to purchase additional shares of .

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Portfolio rebalancing is the process of bringing the different asset classes (stocks, bonds, and cas...
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