Simon's "1 Minute Money Message" (Episode 5): What is Rebalancing and Why Is It Important?

Welcome to Episode 5 of "One Minute Money Message" where Simon will outline Simple Ideas to Grow, Protect and Manage Your Wealth.

So what is rebalancing and why is it important?

Rebalancing is the process of adjusting the mix of assets in your investment or super portfolio to maintain your desired risk level.

Over time, some investments like shares or list of property may grow faster than others, causing your portfolio to become unbalanced.

For example, you might have originally invested, say, 60% in shares and 40% in bonds, but

shares have had a strong period might now sit at something like 70% in shares and and 30% in bonds. So this could increase your risk.

Rebalancing involves selling some of those shares and buying more bonds to bring that portfolio back to that 60/40 target.

So it's important because it helps you stick to your investment strategy and manage your risk and hopefully remove the emotions that can take over an investment strategy, usually

at the wrong time.

So how often do you check your portfolio mix?

We recommend at least once a year, but more often than not if you're making regular

contributions or regular withdrawals from your account.

If you'd like a free copy of our Investment Policy GoalPilot to help you in this process, just

message us or contact us on our web form on our website, or book a book a call on our website button.

Thanks for watching! 

Simon

p.s/ - If you'd like to check out other episodes of "1 Minute Money Message" click here!

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