Expert Advice

What Is “Rebalancing”?

Scott Puritz, Managing Director of Rebalance, discusses one important aspect to successful long-term retirement investing.

Scott Puritz: The key to successful long-term retirement investing is prudently managing risk. Naturally as markets move and up down, different assets of our clients’ portfolios get unbalanced relative to the target percentages. Systematic and disciplined rebalancing resets that in a way and removes emotions from the equation. The simple act of disciplined buying and selling across the various assets, essentially selling the winners and reinvesting the losers, over time considerably reduces risk and provides incremental return in the process. It is a magic tonic.