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    Rebalancing an investment portfolio involves adjusting the allocation of assets to maintain the original risk profile over time. This is done by selling assets that have performed well and buying those that have not to restore the intended percentage allocation in each asset class. It is recommended that investors rebalance their portfolio at least once per year to account for shifts in asset values and ensure the portfolio continues to align with their risk tolerance.

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    Rebalancing an investment portfolio involves adjusting the allocation of assets to maintain the original risk profile over time. This is done by selling assets that have performed well and buying those that have not to restore the intended percentage allocation in each asset class. It is recommended that investors rebalance their portfolio at least once per year to account for shifts in asset values and ensure the portfolio continues to align with their risk tolerance.

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    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
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    5 views3 pages

    Finance Presentation 1

    Uploaded by

    baamrani8
    Rebalancing an investment portfolio involves adjusting the allocation of assets to maintain the original risk profile over time. This is done by selling assets that have performed well and buying those that have not to restore the intended percentage allocation in each asset class. It is recommended that investors rebalance their portfolio at least once per year to account for shifts in asset values and ensure the portfolio continues to align with their risk tolerance.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
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    Rebalancing Investment Portfolio

    Rebalancing of portfolio is a strategy used by investors to maintain their risk profile by adjusting the allocation of portfolios assets trough time.

    It takes place by selling assets that have good performance and buying the ones that have not done so well.

    It is recommended that investors should rebalance their portfolio at least once a year.

    Diversification & The Portfolio Pyramid


    The asset allocation should match to the investors risk profile.

    Diversification & The Portfolio Pyramid


    Market capitalization / Style / Sector Small cap stocks are usually riskier than the large cap ones but they also tend to have higher return. Holding many stocks of the same sector can be very risky. Industry / Geography Although a sector may perform well, not all the industries inside the sector will have the same performance. The markets of different countries are not affected by the same factors and they do not have the same growth rates. Manager Stock

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