facebookWhat does it mean to rebalance portfolio? How do i know when to sell stocks to rebalance or should I buy more of other stocks? - Seedly

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Anonymous

28 May 2020

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General Investing

What does it mean to rebalance portfolio? How do i know when to sell stocks to rebalance or should I buy more of other stocks?

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Rebalancing a portfolio would require to have a fixed percentage of how your portfolio is allocated in your mind.

After that, you will allow your portfolio to grow over a period of time. After some time, you will realise that the portfolio may grow unequally. (In a certain period, stocks may grow more than your bonds)

At a fixed time, you will sell some of your stocks (in this case) to buy back some of your bonds so that the percentage of your stocks is rebalanced. Other wise known as rebalancing of your portfolio.

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