Portfolio Rebalancing

The weighting of different asset categories in your portfolio may shift due to market changes. This makes it important to rebalance your portfolio regularly to preserve the original composition selected based on your investor profile.

For example, you could assign 50% of your assets to bonds, 30% to stocks, and 20% to liquid assets. These percentages will vary depending on whether you are a prudent, moderate, aggressive, or ambitious investor.

Turnkey Portfolios = Automatic Rebalancing

Turnkey portfolios are automatically rebalanced. If necessary, the weighting of each asset category is automatically corrected to reflect the original percentages as per the investor’s profile and risk tolerance.

Stand Alone Funds = Do it Yourself Rebalancing

Should you choose Stand Alone funds, you will need to rebalance your assets (stocks, bonds, and liquid assets) with your adviser’s help according to your investor profile.

The following tips will help you stay on track:

• With the help of your financial planner or adviser, check your portfolio regularly. If the weighting of each asset category it contains is close to the original weighting, you won’t need to make any changes
  
• Otherwise, use your new investments to restore balance to your portfolio, or transfer investments from one asset category to another
  
• Keep in mind the tax impact of any transfer within a taxable account
• Rebalance your portfolio every year

Rebalancing your portfolio is an essential part of any long-term investment strategy. It helps you make informed decisions that reflect your investor profile. For more information, talk to your Desjardins adviser.