Is It Time to Rebalance Your Investment Portfolio?
Your investment portfolio isn’t a “set it and forget it” strategy. Over time, market movements can shift your asset allocation far from your original targets, increasing risk or reducing your growth potential. Rebalancing helps you stay aligned with your financial goals—especially as you approach key life stages like retirement, buying a home, or funding education. At MB Wealth Advisors, we help clients rebalance their portfolios strategically, not reactively.
What Is Portfolio Rebalancing?
Rebalancing is the process of adjusting your investment mix—stocks, bonds, cash, and other assets—to return to your intended allocation. For example, if your target is 60% stocks and 40% bonds, and market growth causes your stocks to reach 75%, you’re now exposed to more risk than you planned for. Rebalancing helps correct this drift by selling some overperforming assets and reallocating to others.
Why Rebalancing Matters
- Manages Risk: It keeps your portfolio aligned with your risk tolerance, especially during market volatility.
- Maintains Strategy: It reinforces disciplined investing instead of chasing returns.
- Improves Tax Efficiency: With the right strategy, rebalancing can help manage capital gains and losses effectively.
When Should You Rebalance?
There’s no one-size-fits-all answer, but here are a few signs it might be time:
- You Haven’t Reviewed Your Portfolio in Over a Year: A lot can change in 12 months, especially in uncertain markets.
- You’ve Had a Major Life Change: A new job, marriage, divorce, or nearing retirement are all moments that may require reallocation.
- Your Allocation Has Shifted by 5–10% or More: This is a common trigger used by wealth management professionals.
How We Approach Rebalancing at MB Wealth Advisors
Our wealth management team doesn’t rebalance based on emotions or market news. We follow a disciplined, tax-efficient process that considers your full financial picture:
- Step 1: Evaluate Current Holdings – We assess your portfolio’s performance and risk profile
- Step 2: Review Life Goals – We ensure your portfolio supports your current and future objectives
- Step 3: Reallocate Strategically – We shift funds based on performance, tax impact, and timing
- Step 4: Monitor and Adjust – Rebalancing is ongoing, not a one-time event
Tax-Aware Rebalancing
We consider both tax-deferred and taxable accounts during rebalancing to minimize unnecessary capital gains. For some clients, this includes using tax-loss harvesting strategies or rebalancing within IRAs where gains won’t be taxed immediately. Our approach is always coordinated with your long-term financial and estate plans.
Common Triggers for Rebalancing
- Turning 50 and wanting to reduce risk before retirement
- Receiving a large inheritance or windfall
- Selling a business or property and needing to deploy cash
- Market surges causing one asset class to dominate your portfolio
Portfolio Reviews vs. Rebalancing
It’s important to differentiate between reviewing and rebalancing. A portfolio review is an assessment—it helps determine if your current allocation is still appropriate. Rebalancing is the action that follows. At MB Wealth Advisors, we offer both services and guide you through each step with clarity.
Don’t Let Drift Derail Your Goals
Rebalancing is one of the most overlooked parts of smart investing. It helps protect your progress, reduce exposure to risk, and keep you on track for what matters most. If it’s been a year or more since your last review, or if you’re unsure how your portfolio is performing, now’s the time to check in.
Call MB Wealth Advisors at (704) 584-9363 or schedule a consultation at mbwealthadvisors.com/contact/#connect.