Market@record highs! How portfolio rebalancing optimises returns & manages risk

Portfolio rebalancing is important in maintaining a balance between risk and return for investors. It involves readjusting asset allocations periodically to restore the desired asset mix, thereby mitigating risk. Fluctuations in market conditions can cause deviations from the set percentage, necessitating rebalancing to realign the portfolio with its original allocation. The rebalancing process promotes diversification, minimizes dependency on individual assets, and adapts to changing market conditions by capitalizing on high-growth sectors and industries. Regularly readjusting asset allocations help maintain asset allocation and align with the investor’s long-term objectives, ensuring that investors can achieve their financial goals with greater confidence and stability in their investment journey.