Quick Tip: Rebalance Annually

After a period of volatility, investors must rebalance their portfolios. If a portfolio was 50 percent stocks and 50 percent bonds at the beginning of 2009, that ratio is likely closer to 60/40 today. Thus, the portfolio is currently more aggressive than it was designed to be. Further, because mid cap and small cap stocks have performed better than large cap and international stocks, most portfolios are currently not as balanced as investors might think. Rebalancing annually will ensure appropriate diversification.