Portfolio Monitoring and Rebalancing
After an investor develops a strategic asset allocation, things can change. The investor’s circumstances may change due to marriage, divorce, childbirth or job changes. More frequently, the economic and market conditions may cause various assets to drift from the strategic allocation weight.
To keep track of changes in investor circumstances and any necessary changes in the strategic allocation that may result, investment managers should have a process in place.
Provided that there are no changes to the strategic allocation, variations from target allocations that result from changing market conditions can be managed by rebalancing the portfolio periodically to restore the target weights.
For more information, see all articles on: Active Management, Asset Allocation, FInancial Planning, Portfolio Management See also:
The Intelligent Investor: The Classic Text on Value Investing
Financial Statement Analysis: A Practitioner's Guide, 3rd Edition
Managing Investment Portfolios: A Dynamic Process (CFA Institute Investment Series)
