Lesson 44 Periodic Maintenance
After you have set up the “perfect” asset allocation plan, you can kick back and relax for a while. But, eventually, you will have to do a little maintenance. Over time, your various asset classes will grow at different rates. So, your “perfect” plan will get a little warped.
As in everything else about investing, there are guidelines, suggestions, and considerations, but no hard rules. As an investor, you have to examine your own situation and come to your own conclusions. I am assuming here that there is no life event that would force you to re-examine whether the asset allocation plan was still suitable.
You should re-balance to keep the original asset allocation plan in order to hold risk constant. For ...
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