Reallocation

As you grow older or your financial situation changes, rebalancing will no longer be sufficient. Instead, investment professionals recommend that you reallocate your portfolio to better fit your new objectives. You might begin your investing career with an aggressive approach, concentrating on long-term equity investing that could result in significant returns in the long run. However, when you experience a big life change, like the birth of a child, you might decide to take less risk and adjust your allocation accordingly. Furthermore, as you near retirement, you may be looking for greater stability in your investments and allocate more conservatively as a result.