Should You Skip Mid-Year Rebalancing?
NEW YORK (TheStreet) -- Disciplined investors know it's important to stick to the plan. If a stock surge leaves your portfolio with 65% stocks instead of the 60% you'd intended, well, it's time to sell some stocks and move the proceeds to bonds or cash.
At least, that's the standard advice. But stocks have kept climbing this year, surprising many who thought last year's stupendous gains would be too tough an act to follow. Should you just skip that midyear rebalancing to keep riding the stock market wave?
First consider your investing time horizon. If you're investing for a retirement that won't start for 20, 30 or 40 years, a short-term tactical move such as delaying rebalancing probably won't make much difference. Asset allocation strategies are based on long-term market patterns that tend to smooth out short-term ups and downs. And lots of research shows that even the pros aren't very good at market timing.
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