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Finances in 55 Seconds: Do You Need to Rebalance Your Portfolio?
Posted By Miranda Marquit On 06/20/2011 @ 12:06 pm In Investing | 2 Comments
While it would be nice if you could just “set it and forget it” in the world of investing, the strategy rarely works. Even if you invest primarily in index funds , or are the staunchest of buy and hold investors, it is still a good idea to periodically review your investment portfolio and decide whether or not you need to rebalance.
While the actually rebalancing of your investment portfolio will likely take a little more time, it is possible to get a general idea of what your next step should be in 55 seconds or less. Gather up your latest investment account/retirement account statements, and get ready to see where you’re at:
If you decide that you need to rebalance your portfolio, it’s time to seriously consider what your next moves should be. If your problem is lack of diversity, think of what you should replace with something more diverse. If you think your portfolio has too many conservative investments, you could diversify into a few more riskier choices, such as commodities or currencies  (just be sure that you are careful not to go beyond your risk tolerance).
When you see that you are approaching different milestones, you need to look for practical investments that can help you transition into the next phase of your life. As you move closer to retirement, for example, you want to move your money into investments that are considered less volatile, since few of us can afford a major stock market setback just ahead of retirement.
Finally, if you are concerned about what might be next for your investments, do some research to identify what investments might make suitable replacements. If you are concerned about a company’s cash flow, replace it with a company whose history is that of solid management and plenty of cash. Think about what concerns you about the investment, and then “fix” the problem with a new investment.
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 index funds: http://www.bargaineering.com/articles/choosing-an-index-fund.html
 retire: http://www.bargaineering.com/articles/basics-of-retirement-investing.html
 currencies: http://www.bargaineering.com/articles/introduction-to-forex-investing.html
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