Mistakes to avoid while
rebalancing your portfolio
Here are some mistakes you should avoid
while attempting to rejig your portfolio:
Letting your personal biases influence the decision-making process.
Not consulting an expert or financial advisor who might be able to give you an objective and broader perspective.
Not accounting for tax implications that you may incur on account of sale of certain assets.
Worrying about the laggards in the portfolio instead of booking profits from the winners.
Not realigning long-term goals with personal and economic changes.
Trying to time the market to buy at a ‘discount’ or sell at a ‘premium’.
Focusing on ROI as the primary metric for adding or culling investments.
Reviewing the overall portfolio performance while ignoring specific investment performance.
Always looking to replace with equity-linked investments, while losing sight on
beter-forming fixed-income instruments.
The idea is to find a system that works for you, be
disciplined in your approach, and stick to a pattern that
minimises risk while maximising returns.