5 mistakes to avoid while rebalancing your portfolio

Rebalancing your portfolio is necessitated by a variety of factors. Your goals may have been achieved and may call for rebalancing. You may need to maintain more by way of liquidity ahead of milestones and hence rebalancing may be required. There may be a major shift in the macros calling for a rebalancing in your portfolio. A change in your own financial situation may also call for rebalancing your portfolio. But more often than not, rebalancing is entirely rule based. You start off with certain allocations for various asset classes. Either your equity component or debt component may go beyond the defined level. That will call for rebalancing.

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