Once-A-Year Portfolio Rebalancing More Than Enough Says T. Rowe

Rebalancing a portfolio once a year is more than enough because the point is to manage risk not widely outperform a benchmark, said Judith Ward, senior financial planner at T. Rowe Price. Ward added that rebalancing is counterintuitive because investors are required to sell their winners as opposed to letting them run. She said investors need to diversify their fixed income holdings to include international bonds as well, especially now that yields in the U.S. remain challenged. Finally, Ward suggests taking a total return approach as opposed to increasing risk by stretching for yield.