Portfolio rebalancing is like giving your investment portfolio a tune-up to keep it running smoothly! 🛠️

💡Portfolio rebalancing = changing the percent composition of different assets or stocks in your portfolio.

This involves regularly selling excess stock, then reinvesting in the stock you want more of in your portfolio to maintain the desired level of asset % or risk. 🛒

Let’s say you have 70% of your investments in the tech industry and 30% in food, but you want the ratio to be 50/50.

So, you might sell some of your tech stocks and buy some more food stocks to get to that ratio!

That’s rebalancing! 🤹

The goal of portfolio rebalancing is to diversify your portfolio.

So, if your tech stocks are losing value. . . 📱

Your food stocks may be doing well! 🏦

💡Portfolio drift = when a portfolio strays from its target % and starts to look different than you intended.

An example of portfolio drift could be. . .⚖️

Having 50% in tech, and 50% in food stocks. ✅

But then having it drift, to 70% in tech and 30% in food stocks. ❌

Regular portfolio rebalancing can also help you take advantage of market dynamics. 💸

Buying low and selling high to rebalance is like a win-win: you hit two birds with one stone! 🐦

Now, you're all set to rock the world of investing with your well-tuned portfolio! 🎸