Facebook TwitterLinkedInYoutubewhatsapp Start Planning for your Financial goals
Schedule Your Free Consultation
  • Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
Holistic investment planners, financial planning Chennai, Private wealth management Chennai

Holistic investment planners, financial planning Chennai, Private wealth management Chennai

Financial Planning chennai India, Private wealth management chennai India, Investment Advisory India, Systematic Investment Plan, Mutual Fund SIP, Mutual Fund ELSS, Tax Saving scheme

  • Home
  • About Us
    • Who we are & What we do
    • Services
      • Financial Road Map
      • Retirement Roadmap
      • Asset Allocation Plan
      • Webinar
      • Money Management
      • Wealth Management
    • In the Media
    • Testimonials
    • What Makes Us Different
    • How we can help you
    • Specialties
    • Honors and Awards
    • Vision & Mission
  • Resources
    • Blog
    • Articles
    • Podcast
  • Ideal Client
  • Contact Us
3 Successful Strategies To Rebalance Your Portfolio

3 Successful Strategies to Rebalance your Portfolio

by Holistic Leave a Comment | Filed Under: Investments

“I get reminded of previous generation mom when someone advises me to rebalance my investment portfolio. I feel like my mom telling me to take oil bath on all Fridays. When everything is going fine, why I should rebalance my portfolio?” one of my client asked me with a smile in his face. I reciprocated his smile and explained him why it is necessary to rebalance his portfolio periodically.

Rebalance your portfolio. Isn’t it an often ignored suggestion? Yes, it is. If you want to take up a healthier investment approach, rebalancing your portfolio is very important. Let us look at how you can rebalance your portfolio and the key benefits associated with it.

What is all about rebalancing the portfolio?

Building a portfolio basically starts with target allocations. Initially, you decide to invest on products with a strategy. It could be something like 50% on stocks, 20% on bonds and the remaining 30% on other options. The rebalancing is done to adjust your investment portfolio to keep it on track as you planned.

You have invested on products and things are going fine, why is it necessary to change it now in the name of rebalancing?

Say, 20 years back, people were looking for jobs in government entities or banks where the ‘job security’ was dominating their mind-set. Later, they moved on to become engineers and then as IT professionals as ‘a big salary, trip abroad’ and ‘owning a big house’ dominate the mind-set. Now I see a lot of budding entrepreneurs as ‘owning a business’ or‘balancing the family-work life’ is dominating the minds. The dominating quality and the mind-set have been changing in people for good. If you are not ready to change, survival becomes challenging.

In parallel to the mind-set, risk tolerance is changing in every generation. Isn’t it? Likewise, the initial decision to allocate your investments on selected products depends on your risk tolerance.The market fluctuations, performance of the currency and the economic status of the country change the way your investment portfolio works. In the long run, if you do not balance the act, your investment portfolio becomes either too risky or too conservative.

For example, you have invested majorly, say, 75% in company stocks while setting up your portfolio. If the equity market has done well in one particular year, then this 75% exposure may become 85% because of over growth in equities. Similarly 75% equity exposure may become 65% because of market crash. We need to periodically rebalance the portfolio to 75% either by reducing or increasing the equity exposure. In this way, you keep your investment portfolio on right track.

This will reduce your overall risk and increase the return potential. You will be booking partial profit when market is moving up. You will invest when the markets are crashing. You will be able to follow “buy low and sell high” in a disciplined way.

What should I do to rebalance my portfolio?

There are three different strategies help to rebalance your portfolio. Let us look at these approaches in detail.

Strategy 1 – Scheduling the portfolio rebalancing:

This approach is rebalancing your portfolio on a predetermined periodicity.. Fix a period like monthly, at every quarter, 2 times a year or yearly to rebalance your investments.

For example, if you are fixing the period as quarterly, look at the investments at a fixed time. Even though there are no hard and fast rules on when you want to start, it is better to fix it according to the financial year, say, it will be April, July, October and January. It will also help you while planning your taxes. Take an example of first quarter which starts in April.

Come what may and how little your portfolio has changed, rebalance it in April. Here, you are looking only at your investments and not how the market works.

Strategy 2 – Threshold approach of portfolio rebalancing:

In this approach, you pre-set a certain degree of changes in your investments. You allow your investments to remain the same unless here is no change occurring to a set degree. The balancing act begins when the investment portfolio changes beyond the set degree.

For example, if the set degree is 10% you can allow your investments to go low or high up to 10%. When the change exceeds or goes low even to 11% or 9%, it is time to kick start the rebalancing act.

Set a lower or tighter degree for certain investment products like real estate, equities or emerging market stocks. With this approach, you have to keenly monitor the investments and work harder. But you have a great advantage of lowering the risk by adjusting your investments depending on the market fluctuations.

Strategy 3 – Combining scheduling with threshold approach:

Through this combination approach, you can use the scheduling to analyse the portfolio and rebalance it according to the threshold approach, i.e., in case of changes occur to a degree set by you.

For example, if you have set a monthly scheduling and 5% as your rebalancing strategy. You analyse your portfolio at a fixed date or day in a month. After analysing, look at how the investments have changed. If they have changed beyond a set degree of 5%, rebalance your portfolio by changing the investments and bring it on track.

Adjust the approaches depending on your need and the time you can spend on the exercise. Sometimes, keeping a degree as low as 5% may require a lot of time to be spent on it. If you cannot allocate such time, increase the degree. Likewise, on the scheduling, you can change it from monthly to quarterly. Not able to do it as planned may lead to frustration and you may end up not doing it. Be flexible, but do not change the pattern frequently.
Balance your rebalancing act by strategizing it well!!

If you are looking for professional assistance in rebalancing your portfolio , then you can take advantage of

Reader Interactions

Previous article: How to protect yourself from credit card frauds?
Next article: 7 Misconceptions about Mutual Fund SIP

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Primary Sidebar

Client Login

Recent Posts

  • LIC Dhan Varsha Insurance Plan: Complete Analysis & Review – Should you buy? 
  • Tata AIA Life Insurance Smart Value Income Plan: An In-depth & Insightful Review
  • Mastering Islamic Finance: The Ultimate Guide to Sharia Investment
  • Smart Financial Planning Tips for Beginners – A Complete Guide
  • SIP Investment Mistakes! How to Overcome Them?
Jey S
Jey S
24. September, 2021.
I have been using Holistic Investment Planners for the last three years. Mr. Srinivasavaradhan answered all my questions and doubts very patiently during the first free consultation. I was able to clearly define my short-, medium- and long-term goals once I signed up for the comprehensive plan and got their investment plan suggestion to achieve my goals. They are very polite and highly professional whenever I contact them for any queries or make investments. They never pressurize you to invest on their recommended financial products. I would have been lost money by investing directly without their help since I do not have time and knowledge about different financial products. Risk planning is also done as part of financial planning. Truly, they are holistic planners when it comes to your financial planning. They help you to define your life goals, understand your financial resources and establish a plan to invest towards reaching those goals. They do review your plan as you progress to make sure that you are on correct path to achieve those goals. Kudos to the team and keep up the good work!!! I am happy that I found holistic investment planners for my financial planning and management.
aksaswadkar
aksaswadkar
24. September, 2021.
I was about to retire and really not understanding how to invest money to have financial freedom and fulfilling my goals. Was desperately searching on internet way out and fortunately came across Holistic Investment Planners. I read number of articles on their website and realized that this is the agency which I want and engaged their services for my retirement planning. It is an excellent experience to be associated with Holistic. Right from day one our interaction was fantastic and they gave me such a wonderful plan that I had never imagined. I am fortunate enough to be in the client list of Holistic. I have recommended Holistic to my friends as well.
Lionel Faber
Lionel Faber
16. September, 2021.
I've been availing their services for the past year. They are highly knowledgeable in the field and are very patient with all doubts and queries. Personalized financial planning is provided keeping your short term, medium term and long term goals in mind. They do not pressurize you to purchase schemes of their choice. They provide their input and suggestions and leave the decision up to you which shows their honesty and high principle.
Sridhar
Sridhar
8. September, 2021.
Financial planning brings peace in life. Holistic Investment have supported in arriving financial plan based on future goals. My investments are regular since then. They are professionals in their business, will recommend others.
Nitesh Agrawal
Nitesh Agrawal
6. September, 2021.
I have been using Holistic Investment Planners from last one year. The journey has been fantastic. Being a finance person myself I always thought we can look after and plan own finances also. However, due to lack of time and deciplain the things are not always as desired. After joining with Holistic Investment for the first time Icame to know the Financial goals and quantified them. Some dreams were unrealistic based on the earnings and savings so had a reality check. Also got the information and deciplain of investing on regular and more rewarding securities. I definetly suggest to use Holistic Investment Planners. They are professionals, available and hear youor full story before presenting plans. They are flexile in the sense if there are some urgent deviations required, they help to plan the same. For all professionals/individuals I would suggest using professional help of Holistic Investment Planners for best results in long term investment and financial goals achivements. Last advise will be to start early in your life. It really pays well to start in the beginning itself else the dreams needs to adjust :)
Swetha Vasanth
Swetha Vasanth
6. September, 2021.
This is my first year service with the Holistic Team and I would say that they are very much helpful in creating a financial plan and follow ups during the year. I would definitely suggest them if anyone who is willing to proceed with their savings professionally.
Joseph Mathias
Joseph Mathias
6. September, 2021.
I came to know about Holistic Investment Planners online while searching for different investment ideas. Once I contacted them the journey was very smooth. Mr. Ramalingam explained all the aspects of Financial planning in detail and it opened my mind. I realized how important it is to have a Financial planning. Mr. Rajan suggested all the requirements as per my goals and made a Investment plan keeping in mind of my goals. I started my Investment journey with them. I wish I had done it some years back then it would have been in a different level. Review meetings were held every six month to check the implementation of the plan and check the results as per the requirements and to check if any changes required. Overall it was a good experience with Holistic Investment team and would like to continue in the years to come.
Srinvas Kannan
Srinvas Kannan
30. July, 2021.
I came across Holistic investment planners almost 5-6 years back, but I did not have the trust since I had met a few of them who did not sound promising. Then I started investing through a financial advisor of my friend. After 4 years of investing the returns were very low. I was disappointed and started looking for financial advisors when I came across Holistic investment. I had a detailed discussion about my goals and the way they would approach achieving my goal before deciding to switch my investments to them. After a thorough analysis of my then existing portfolios, they suggested new ones and we zeroed-in on 6 schemes/funds where our investment would be split. I am glad I made the decision of switching over and taking Holistic planner's advise, my returns are handsome and I only wish I could have taken their help/advise 5 years back itself. Neverthless, I would like to recommend their services for investment and financial advise if someone is serious about their investments.
Shivaram Andiappan Selvaraj
Shivaram Andiappan Selvaraj
3. July, 2021.
I got a free first time consultation. I got my doubts resolved. They also gave additional advises for investment planning which was also useful.
Nellai B
Nellai B
26. June, 2021.
I have been associated with them for the past three years. They are very professional and polite in answering all our questions. I have complete trust in their suggestions. I strongly recommend for anyone. I am looking forward to have strong and successful association with them.
Google rating score: 4.4 of 5,
based on 61 reviews

Footer

  • Articles
  • Gallery
  • Ideal Client
  • Jobs(Full Time)
  • Podcast
  • Services
  • Testimonials

Connect With Us

Holisticinvestment.in
10/15, Second Cross Street,
Seethammal Extn.,
Teynampet,
Chennai – 600 018,
INDIA.

Copyright © 2022. Holisticinvestment.in | All rights reserved.    Cared with ❤ by T-Square Cloud

×