Before understanding this topic, let’s know what to do with a money box. In simple terms, fill it, shut it, forget it’ once in a year. Your situation may change, or the products may get worse or better, but one should clean their money box once in a year.
What is portfolio rebalancing?
Rebalancing is the process by which an investor restores their portfolio to its target allocation. The rebalancing process is reinvesting the profits taken from some of the outperforming investments and putting them in underperforming assets. Rebalancing brings your portfolio back to the desired asset mix.