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REBALANCING DEMONSTRATION Form

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portfolio rebalancing refers to adjusting the allocations of different assets to maintain a desired risk profile in this video I'll explain what rebalancing is and when why and how to do it portfolio rebalancing refers to bringing the Assets in one's portfolio back to the Target asset allocation which is the specific ratio among assets for a desired risk profile specifically this means selling overweight assets and buying underweight assets for example suppose you have a desired allocation of 50% stocks and 50 % bonds written as 50/50 if your Stock's position Grows by 10% and your Bond's position Falls by 10% during the year the portfolio has now drifted to 55% stocks and 45% bonds or 5545 by rebalancing you bring the portfolio back to 5050 by selling 10% of the stocks position and buying 10% more bonds it's worth noting that one asset does not have to lose value for the portfolio to stray from its Target allocations the only requirement is a rel

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