Rebalance your portfolio regularly from "summary" of Common Sense on Mutual Funds by John C. Bogle
Rebalancing your portfolio regularly is a crucial aspect of successful investing. As you allocate your assets across different asset classes, such as stocks, bonds, and cash, the relative values of these investments will change over time. The prices of stocks and bonds fluctuate daily, which can lead to a situation where your portfolio becomes skewed towards one asset class. For example, if the stock market experiences a significant rise in value, the percentage of your portfolio invested in stocks will increase. This shift may expose you to higher levels of risk than you are comfortable with. On the other hand, if the bond market performs well, your portfolio may become too conservative, potentially limiting your returns. To maintain your desired risk profile and investment objectives, it is essential to rebalance your portfolio periodically. By selling assets that have appreciated in value and buying assets that have underperformed, you can reali...
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