Maybe you prefer municipal bonds because you’re in a high tax-bracket? Maybe you like short term treasuries because you don’t want the interest rate risk? Or perhaps you’re most concerned with inflation, and want some Treasury Inflation Protected Securities in your portfolio. There are subsets of stocks like large companies or small ones, value companies or growth ones, international or emerging markets.
In its most simple version, these “asset classes” are stocks, bonds, cash, and maybe even alternatives like real estate or commodities.Īsset classes go far deeper, however. The asset allocation plan dictates how much of your investment portfolio you’ll invest in various asset classes. 35% value on rebalancing alone! This means if you rebalance your investment portfolio you can boost your investment performance (and control your risk) to the tune of an extra. Portfolio rebalancing frequently asked questions Portfolio rebalancing starts with an asset allocation planĪsset allocation is one of the 12 strategies I explained both Morningstar and Vanguard agree can add a LOT of value to your investment planning.
