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Personal Strategy™

Intelligent portfolio rebalancing

Rebalancing your portfolio is an important part of managing your money. Learn how intelligent portfolio rebalancing works.

The benefit      How it works      Who needs it

The primary benefit of portfolio rebalancing is risk management. When someone builds an investment portfolio, they usually create an asset allocation of both low-risk and higher-risk assets as a way to mitigate risk while still achieving healthy returns. While a portfolio of only equities might result in higher returns during many years, it also creates more risk of your portfolio losing value.

Over time, your asset allocation will change as your investments perform differently. During a bull market, the share of your portfolio devoted to equities is likely to grow, while the share of fixed-income securities like bonds will shrink. As a result, the amount of risk in your portfolio also grows. Rebalancing gets your portfolio back to your target asset allocation to help ensure you aren’t taking on more risk than you wanted to. Rebalancing does not ensure a profit or protect against loss.


In general, anyone with multiple assets in their portfolio should consider rebalancing at least occasionally. Rebalancing can help mitigate risk and help ensure that one asset class, sector or individual security doesn’t take up too large a percentage of your portfolio.


One situation in which rebalancing may not be necessary for your portfolio is if you only invest in a single asset. While this is rare, it may be the case for someone investing in a target date fund. This type of pooled investment is designed to adjust its asset allocation over time so investors don’t have to do it themselves. Rebalancing may also not be necessary if you use a robo-advisor to manage your investments automatically.

Advantages of your Personal Strategy

Tax optimization

Our sophisticated tax-optimization process focuses on three key areas: asset location, tax-loss harvesting and tax efficiency.

Disciplined rebalancing

We review portfolios daily for rebalancing opportunities. This provides the potential for enhanced returns by creating a systematic way of buying low and selling high.

Smart Weighting™

Smart Weighting provides more even exposure to factors such as size, style, and sector, ultimately providing better diversification for your portfolio.

Dedicated advisor

Your own dedicated advisor will be there along the way to help with financial planning needs and behavioral coaching.

Advisory services are provided for a fee by either Personal Capital Advisors Corporation ("PCAC") or Empower Advisory Group, LLC (“EAG”) depending on your specific investment advisory services agreement. Both PCAC and EAG are registered investment advisers with the Securities and Exchange Commission (“SEC”) and subsidiaries of Empower Annuity Insurance Company of America. Registration does not imply a certain level of skill or training. Investing involves risk. Past performance is not indicative of future returns. You may lose money. All visuals are illustrative only. Actors are not PCAC or EAG clients.