Investing in the stock market provides you with a way to grow your wealth over the years. But investing comes with risks.
So what can you do to minimise the risks you take on when you invest?
Read on to find out…
The basis of a great investment strategy
For your investments to perform well over the long-term, you need to build up a core holding of great stocks in your port... ››› more
Emotions play a big role in the way you invest. Listening to your emotions can result in you making erratic decisions that could cost your dear.
That's why it's vital to have a sensible investment strategy in place. You just need to stick to it.
So what should your sensible investment strategy include?
Read on to find out…
The merits of asset allocation and rebalancing
Asset al... ››› more
You're taking your car for a spin on a Sunday afternoon. As you speed up, you feel the power in the engine build up.
But without warning, your left wheel hits a pothole. You acknowledge the hit with a single curse word.
You start to feel your steering wheel pull towards the left and your car is now losing its balance
The fix is simple: Pull safely over on the side or to the nearest pet... ››› more
Rebalancing your portfolio is all about keeping the different types of assets you hold within certain percentages.
The idea behind this investment strategy is to reduce your portfolio risk by ensuring you don't let you portfolio get too heavy in certain assets.
But what about your returns? Rebalancing can limit your returns as by selling off assets that have grown in value, you can lose out ... ››› more
When you first invest, you should decide on what asset allocation you're going to stick to. For example, what percentage of your portfolio you'll hold in stocks and what percentage you'll hold in bonds.
Over time, the asset allocation of your portfolio will change as their underlying values rise and fall. So every now and then you need to rebalance your portfolio.
But what's the best way to ... ››› more
When it comes to successful investing, you need to have a plan on how you're going to stay in the markets.
To do this effectively, one of the best ways to do it is to have a structured portfolio and regularly rebalance it.
Let's take a closer look at how this works and how it benefits your portfolio…
How to structure your investment portfolio
There are a number of ways you can str... ››› more
Rebalancing is a great way of reducing your investment risk and getting better returns. By keeping your investment portfolio in check and taking it back to your original asset allocation, you can reap the rewards. So if you want to do it, how often should you rebalance your portfolio? And how can you add more money into your investment pot? Read on to find out this and more…
How often to reba... ››› more
Rebalancing your portfolio involves periodically buying and selling different asset classes within your portfolio to bring everything back to your original allocation. And back to your optimal mix of assets. In theory rebalancing seems to make a lot of sense. But in practise is it really worth the bother? Let's take a closer look…
Rebalancing could be worth the hassle involved
A couple of st... ››› more
Rebalancing is a simple strategy of keeping your assets in certain proportions. Periodically, you check these proportions. If any of these assets stray out of their proportion, you ‘rebalance' them. Rebalancing means you can forget about the daily ups and downs in the market. And your portfolio can benefit. Let's take a closer look at the benefits to your portfolio…
How rebalancing can bene... ››› more
As an investor, diversification is a very important part of putting your portfolio together. But once you have your portfolio, what's the best way to maintain it? How can you ensure you keep the diversification and balance you want? It all comes down to rebalancing. Let's take a closer look at how this works…
The ins and out of rebalancing
Have a look at the chart below…
Let’s ... ››› more
It's not just about buying shares and ensuring you have a diversified portfolio. To help you achieve success in the markets, you also need to make sure you've got your balance right. And the best way to achieve that is to rebalance your portfolio on a regular basis. So what does rebalancing entail? Read on to find out…
Decide on the asset allocation of your portfolio
How you allocate your... ››› more
Investors are prone to hanging onto shares and other assets they own. Even if some of your portfolio has performed well, it doesn't mean you should hold on regardless. Sometimes you have to fight your fears and let go. One way to do this is to regularly rebalance your portfolio. By rebalancing, not only can you bank some profits from assets that have done well, but you can invest in others. Let's ... ››› more
The idea of periodically reviewing your portfolio and adjusting your asset allocation back to your initial amounts may make complete sense. It appears to help to reduce risk in your portfolio. But it is worth the hassle? And how often would you need to do it? Read on to find out if rebalancing works…
There are a couple of good studies that suggest rebalancing does work, Phil Oakley in Money We... ››› more
One of the biggest challenges for any investor is to control your emotions. Human beings have a tendency to act in herds. They chase the latest hot investment and sell out of the least popular stuff. In other words, we instinctively buy high and sell low. But this is the exact opposite of what we should be doing. And that's what makes rebalancing a good idea. Let's take a closer look at whether yo... ››› more
Discipline is essential is an essential ingredient to becoming a successful investor. You need to decide on a strategy, allocate your money to your investments accordingly, and then stick with that through the ups and downs the markets will inevitably bring. That doesn't mean you have to be obsessively monitoring your portfolio on a daily basis. But you should review it regularly. And the New Year... ››› more
In theory, rebalancing - buying and selling to get your overall asset pot back to your target allocations - makes a lot of sense. But what about in practice? Some studies show that it might actually be worth it. Read on to find out the pros and cons of rebalancing your portfolio…
Well, there are a couple of studies that suggest that rebalancing works in ‘the real world,’ Phil Oakley in Mon... ››› more
Don't put all your eggs in one basket. It's an ancient piece of investment advice, and one that everyone should follow. But once you've put your investment portfolio together, how do you look after it and make sure it keeps doing what it's supposed to be doing? They key is to regularly ‘rebalance' it. Read on to discover what you need to know about rebalancing…
Let’s say that you’ve put ... ››› more
Successful investing begins by conceding that, to a degree, uncertainty will always be your companion. You can guess what the market is going to do and be right. Or you can guess and be wrong. Or you can let some self-styled “expert” do the guessing for you. But no one guesses right consistently. That's why asset allocation is one way to help you build wealth. Read on to find out the advantage... ››› more
There are many ways to ‘spot' market bubbles, some better than others. But none is perfect. And you can never be sure when a bubble you think you've spotted is going to pop. Read on to find out a practical way to overcome your own natural biases…
Apart from the difficulty of spotting market bubbles, there’s the question of resisting them, John Stepek explains in MoneyWeek.
It’s easy t... ››› more
Value averaging is a great strategy. It combines rand cost averaging and rebalancing. But it doesn't work well over time. However, there is a way you can ‘tinker' with the strategy to make it work by using a value path. Read on to find out how to map out a value path to riches…
Value averaging is a strategy that combines the best bits of rand cost averaging with the benefits of rebalancing. ... ››› more
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