InvestorWords.com

rebalancing

Definition

Making adjustments to counteract the fact that different assets have performed differently and now comprise different percentages of the portfolio than they were intended to. For example, a portfolio with a high growth objective holding 20 percent of its assets in money market securities should consider rebalancing to hold fewer assets in money market securities and more assets in stocks or other higher risk instruments.

Featured Tip

Rebalancing during Tough MarketsTough markets can really skew your financial perspective. And your portfolio balance. Rebalancing can help you get back on track to higher returns, as we've mentioned in the past. Not only does rebala ... Read more