How to become an expert mutual fund investor: Balance is the key

Now comes probably the boring but a critical part of your journey - rebalancing your portfolio's asset allocation periodically. As our investments start to grow over a period of time, we tend to undermine the importance of portfolio rebalancing. However, you should keep an eye on your portfolio every once in a while, probably once every six months or so and see whether or not your asset allocation is in line with your financial plan. Here you can follow some rules of thumb like whenever the actual allocation moves away by more than 5-7 per cent from the predetermined level, you can rebalance your portfolio by redeeming your investments in the asset class which has gained in your portfolio and investing in the other one. For instance, you want to keep the equity-debt ratio of yo

This article was originally published on December 23, 2021.