Are You Balanced?
I am not referring to you personally and the possible new year goals you have made.
Did your IRA, Roth IRA or investment account get rebalanced yet?
They should have been.
Unfortunately, many advisers are unable or unwilling to correctly undertake the task for a variety of reasons. Rebalancing is placing a portfolio back into your correct target allocation of diversified US stocks, international stocks, global bonds, alternatives, cash.
It is important to rebalance your holdings most years. However, during calmer periods there may be little to minimal rebalancing required, although in lively years of swings like 2018, it’s even more vital to have this basic and underutilized skill performed.
In early October, we rebalanced client accounts during our normally scheduled 6-month time-frame. In the period following, from mid-October to late December, the market as measured by the S&P 500, dropped over 10%. The discretion investment policy we use at our firm provided us a disciplined process, removing emotional pulse to accomplish a special rebalancing for our clients. It was not “timing the market” (as that is futile) but rather “pricing the market”. After a move of 10% up or down, our process permits our 7 advisor team to get our positions “back in line”, and in this situation accumulating more stock shares. We bought more of the same individual stocks and stock funds that we’ve researched and held for a long time but at lower prices… on sale discounts!
Reach out and let me know if you have questions about how a disciplined investment process can benefit you.
Luke Fields
CERTIFIED FINANCIAL PLANNER™
Rebalancing a non-retirement account could be a taxable event that may increase your tax liability. This is not a replacement for the official customer account statements or trade confirmations from Raymond James or other custodians.