Rebalancing an investment portfolio
What is an investment portfolio and who can have one?
Once the investor manages to position himself within a risk profile where he feels comfortable, his objective is focused on keeping the investments in balance. This means that the proportions determined from the beginning by sector, industry, currency, geographic location and/or type of asset, are maintained over time to achieve the long-term objective.
If the investor brings fresh resources into his investment portfolio, new investments would be concentrated in those assets that have not been favored in the review. Additionally, if the charges are maintained, the money is distributed proportionally.
It is also valid to change strategy due to inherent market issues or by the investor's own decision. Rebalancing allows for price movements and if all agents do these exercises, we will have the "pilot" of supply and demand in the stock market turned on. That is why there is volatility (price variation); the same volatility that adds or subtracts value, but that undoubtedly generates great opportunities to enter the market.
Other investment portfolio highlights
We are regularly shown three scenarios that narrow down the risk by profile:
