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Keeping Your Financial Balance Thumbnail

Keeping Your Financial Balance


We all try to have a work-life balance and a balanced diet, but are your investments balanced? Today on my blog, I’m talking about rebalancing your investment portfolio - why we do it and when we do it. Read more to find out if it’s time for you to consider this as an option. 

When it comes to your investments, are you a “set it and forget it” or a “check it everyday” person? Neither is a great option! For optimal investment health, you need a healthy balance - which is why disciplined investing and recurrent rebalancing of your portfolio is a must.

How to Be a Disciplined Investor

To be a disciplined investor, you have to be in it for the long haul. Short-sighted goals will get you in trouble! With a long-term investment attitude, the goal is to maintain a conservative growth portfolio, avoiding volatility, through all market conditions. 

But what exactly is conservative growth? Conservative growth is an investment strategy where we look to grow capital over the long term. We aren't looking for great increases in a portfolio in the short term, but are more concerned with wealth preservation and growth for the future. 

So, how do we accomplish that? One way is rebalancing! For a typical investment client (though every situation is different), I usually like a 60/40 portfolio. This means having 60% invested in potentially higher risk (and higher return) stocks and 40% invested in lower risks (also lower return) assets, like bonds. This generally gives consistent returns, avoiding extreme highs and lows. 

Sometimes though, the market does crazy things. In recent weeks, with all of the world-wide health concerns, the stock market has taken quite the hit. With world issues like that, a portfolio that started out at 60/40 can also get a little crazy! That’s where the rebalancing comes in - we can buy or sell assets to even out your portfolio and keep you at that happy medium - growing steadily! Rebalancing is a taxable event in non-qualified accounts. As always, please consult your tax professional for cases of taxable accounts.


Periodically analyzing your investments for rebalancing is a great idea. It is especially important to look at rebalancing during times like these. Is it time for your portfolio to be diversified or rebalanced? Schedule a meeting with me today! 


The opinions/views within do not necessarily reflect those of Voya Financial Advisors. In addition, they are not intended to provide specific advice or recommendations for any individual, attorney, accountant or tax advisor regarding your individual situation prior to making any investment decisions.


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