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3 Tips for Rebalancing Your Portfolio in the New Year

Asset allocation is central to aligning an investor’s portfolio with their financial goals. In fact, Vanguard’s research shows that nearly 90% of a portfolio’s volatility and returns arise from asset allocation!

Rebalancing a portfolio is essential to maintain target asset allocations to maximize returns and minimize risks. While many investors forget to rebalance their portfolios each year, 2022 has been exceptionally volatile, with the S&P 500 index down nearly 20%. As a result, many portfolios have likely deviated further than usual from target asset allocations.

Let’s take a look at best practices that you can use to rebalance your portfolio and optimize your risk-adjusted returns.

Be sure to check the Retirement Channel to learn more about investing strategies to build up your nest egg.

1. Harvest Tax Losses

2. Rebalance With Cash Flows

3. Re-evaluate Fund Holdings

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