Investments do not all move at the same pace. Over time, a portfolio can drift away from its intended allocation, leaving you with more or less exposure to a particular kind of risk than you planned.
Notice the drift
Compare current portfolio weights with the mix you chose. For example, if shares grow faster than other assets, they may become a larger share of the portfolio even if you have made no new purchases.
Choose a review approach
Some investors review their mix on a calendar; others look when an allocation moves beyond a predetermined range. A review does not necessarily mean a trade is required.
Consider your options
Depending on your circumstances, you might direct new contributions toward underweight areas or sell some holdings and buy others. Consider transaction costs, taxes and account rules before making changes.
Revisit the plan itself
Rebalancing returns a portfolio toward a chosen mix. If your goals or circumstances have changed, the mix itself may deserve another look. A qualified adviser can help you assess your situation.
This article is for general education only and is not personalised financial advice. Investments can lose value. Consider your circumstances and seek professional advice if appropriate.
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