#rebalancing

#rebalancing

If you've chosen a target asset allocation-the mix of stocks, bonds, and cash in your portfolio- you're probably ahead of many investors. But unless you're investing in a set-and-forget investment option like a target-date fund, your portfolio's asset mix will shift as the market fluctuates. In a bull market you might get more equity exposure than you planned, or the reverse if the market declines. Rebalancing involves selling assets that have appreciated the most and using the proceeds to shore up assets that have lagged.