Understanding Portfolio Rebalancing in Mutual Fund Investments
Investing isn't just about selecting the right investment plan or scheme; it's also about ensuring that it aligns with your risk profile and desired asset allocation. However, when market fluctuations occur, asset allocation can change, which is where portfolio rebalancing comes into play. What is Portfolio Rebalancing? Portfolio rebalancing is the process of realigning your investment portfolio to its original target asset allocation. It involves buying or selling assets within your portfolio to maintain the desired balance between different asset classes, such as stocks, bonds, and cash equivalents. If you wish to know more about rebalancing, reach out to an AMFI registered mutual fund advisor in Beawar . Why Do You Need Portfolio Rebalancing? Maintaining Risk Profile: Over time, market movements can cause the proportions of different assets in your portfolio to shift. Portfolio rebalancing helps ensure that your investment remains consistent with your risk tolerance and fi