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Market Update

Why Rebalancing (Almost Always) Pays Off

This year's turbulent market was yet another reminder of the power of portfolio rebalancing for risk reduction.

Rebalancing your portfolio is one of those beneficial habits--like flossing every day or dusting under the refrigerator--that’s easy to let slide. But if your portfolio’s equity exposure crept up over the past few years, the sudden market correction in February and March was a harsh reminder of why it’s a good idea.

In this article, I’ll look at how different rebalancing frequencies have paid off in 2020’s turbulent market, as well as during other market drawdowns. In a nutshell, any rebalancing strategy works far better than none at all, especially when it comes to risk control.