Ch.12 · Model Portfolios and Asset Allocation · easy
What is 'portfolio rebalancing' in the context of mutual fund investing?
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EXPLANATION
Portfolio rebalancing involves selling assets that have grown above their target weight and buying those that have fallen below, to restore the original strategic allocation. For example, if equity outperforms and rises from 60% to 75%, rebalancing sells equity and buys debt to restore the 60:40 target.
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