The importance of portfolio rebalancing
It is key to maintaining the portfolio risk of the original asset allocation. By Oh Chun Wei
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LIKE many investors, Ivan did not have the habit of monitoring his investments after the initial set-up. However, after investing in the Avallis Portfolio Asset Management (PAM) strategy in 2016, he began to learn about the importance of regular reviews and the benefits of portfolio rebalancing.
Ivan's goal is to retire in 20 years. After assessing his current financial situation, Ivan can increase his portfolio risk now and lower it as he approaches retirement. Based on his risk profile and the market outlook, Ivan invested in two portfolios with allocations of 50 per cent equities and 50 per cent bonds.
Ivan's investments were split into an Asian Market (AM) Portfolio and a Developed Market (DM) Portfolio to achieve diversification across different regions.
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