Personal & Financial Strategies

Rebalance Your Investment Portfolio

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COUNTRY Financial representative Steve Blachford shares three tips to help you maintain the value of your investment holdings.

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There are periods when you probably experience an decrease or increase in the value of some of your investment holdings, resulting in a shift in your optimal asset allocation. Here are some things you should know.

Out of Proportion

When you started investing for your retirement, you decided which types of investments to include in your portfolio and how much to invest in each; however, an asset allocation isn’t static. Over time, performance differences can knock your original mix off balance. When this happens, you may be exposed to more or less investment risk than you had intended. You can restore your asset allocation by rebalancing.

Back on Track

Rebalancing is very straightforward. Suppose your initial allocation called for 60 percent of your account to be invested in stock investments. After a couple of years of strong stock market returns, stock investments might now make up 70 percent of your account’s total value. To return to your original allocation, you’d transfer money from stock investments into investments holding the other types of assets that are now “underweighted.” Another option would be to direct your new contributions into the underweighted asset types until your original asset allocation is restored.

Keep Checking

You should review your retirement investments at least once a year and rebalance your account as necessary. You’ll feel more comfortable on the road to retirement knowing that your plan assets are well aligned according to your plan.

Steve Blachford is a financial representative at COUNTRY Financial, 2126 N. Perryville Road, Rockford. Contact him at (815) 633-9313. COUNTRY Financial has more than 85 years of experience serving and satisfying its clients, and has been investing money for its clients since 1971.

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