You Should Rebalance Your Investment Account Once a Year
By Saghir Aslam
Rawalpindi, Pakistan
( The following information is provided solely to educate the Muslim community about investing and financial planning. It is hoped that the Ummah will benefit from this effort through greater financial empowerment, enabling the community to live in security and dignity and fulfill their religious and moral obligations towards charitable activities)
Set a time each year you must to rebalance your account and do it at the same time each year you want to take look at year and every position evaluate and see where the market is for turned off and where you want to put your money. Once you have all your research than take proper action and balance your portfolio.
If your retirement investments are growing, that’s great. But when you receive an update on your account, don’t just look at the bottom line. Also check your assets mix to see if you are still comfortable with how your account is divided among your investment choices. After reviewing your asset allocation, you may need to rebalance your portfolio so that is accurately reflects your investment strategy.
Becoming Unbalanced
When you set up your investment portfolio, you may have selected investments in a variety of assets classes in order to spread out your overall risk. If you have a high tolerance for risk, your portfolio may have been heavily weighted in stocks, with less of your total account in bounds and money market investments. A conservative investor might have only a small fraction in stocks, with more of the account in bonds and money investment. The right asset allocation is different for every investor.
Over time, your asset allocation will shift based on the performance of your investments. For example, suppose the stock investments in an investor’s portfolio have increased in value significantly over time. Now represent 60% of the portfolio. The unbalance portfolio is more aggressive than the investor indeed or is comfortable with.
How to Rebalance
If your portfolio has become unbalanced, it’s relatively simple to rebalance it again. The investor in the previous example would need to reduce his or her stock investments and direct more money into the other investment categories in order to get back to the original allocation. While you should enjoy the growth of your retirement investment, remember to pay attention so that your portfolio don’t get unbalanced. It’s the good idea to review your asset allocation periodically to make sure that you maintain your investment strategy.
Provided by courtesy of, [Name], a [Title], with Wachovia securities in [City]. For more information, please call [name] at [number]. Wachovia Securities, LLC, member Newyork Stock Exchange AND SIPC, is a separate non-bank affiliate of Wachovia Corporation.
(Saghir A. Aslam only explains strategies and formulas that he has been using. He is merely providing information, and NO ADVICE is given. Mr Aslam does not endorse or recommend any broker, brokerage firm, or any investment at all, nor does he suggest that anyone will earn a profit when or if they purchase stocks, bonds or any other investments. All stocks or investment vehicles mentioned are for illustrative purposes only. Mr Aslam is not an attorney, accountant, real estate broker, stockbroker, investment advisor, or certified financial planner. Mr Aslam does not have anything for sale.)
-----------------------------------------------------------------------------
