I am a senior citizen and my portfolio comprises 50 per cent each in equity and debt. Do I need to re-balance?
- Ruchi
Yes. It is great to have a real balanced portfolio and re-balance it annually. Do an annual review and don't re-balance if this 50 becomes 55 or 45. Anything more than 5 per cent, whether it be in a short term or annual review, re-balance it.
When you re-balance it, the advantage is that you are able to put your money in something which hasn't done well and taking out money from something which has done well. You are automatically booking profits and buying relatively cheap. If equity has done well you will be taking out money from it and putting it in debt.
So, just put a percentage, as a ceiling, in your mind or document it. When it crosses, re-balance.
This article was originally published on March 07, 2019.
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