Rebalancing portfolios - why simple rules are the best.


How do you keep your emotions out of investment decisions, particularly when markets are in a volatile period? One way is to adjust your portfolio based on a pre-defined set of rules, not on what is happening in the markets right now. 

Deciding on the right portfolio weights may be key to asset allocation, but what ultimately matters is sticking to the weights you choose. And that requires regularly rebalancing your portfolio.

This article from The Economist says that if you establish a rebalancing habit in calm markets, it will be easier to follow in volatile times.

Click through to read it here.