Expert Advice

Portfolio Rebalancing Keeps You On Track

Charley Ellis explains the process of portfolio rebalancing, and how it allows Rebalance IRA clients to enjoy a more personalized approach to investing.

Charley Ellis: Best analogy to rebalancing is driving. If you close your eyes while you’re driving, I’ll bet you any amount of money that you can’t keep them closed for a full minute. That’s because you won’t know for sure you’re in the right lane. And rebalancing is a way of putting yourself back into the right lane by making easy-to-do adjustments. And it’s exactly like driving. You keep adjusting and putting ourselves back in the right lane. No big deal. Easy to do.

Driving, we have to do it all the time. And rebalancing in investing once a year is probably plenty. Once a quarter, maybe, for someone who’s got substantial assets. And those that are really substantial and have full-time professional investing going on all the time, sometimes rebalancing every single day. So they stay in the right zone, in the right lane, in the right direction for their long-term purpose.