In partnership with

Today’s Headline

🌍 Series 3: Building a Strong Investment Portfolio

Day 5: How to Rebalance Your Portfolio Like Pros Do

When I first started investing, I thought that once I picked my stocks and funds, I could just sit back and watch my money grow. But over time, I realized something important — an investment portfolio doesn’t stay balanced forever.

Markets move. Some investments rise faster than others, and before you know it, your portfolio might look very different from how you originally planned it. That’s where rebalancing comes in — the secret tool professionals use to keep their investments on track.

Rebalancing isn’t about chasing trends or timing the market. It’s about staying disciplined, protecting your gains, and making sure your portfolio continues to reflect your goals and risk tolerance. In this lesson, I’ll walk you through what rebalancing means, why it matters, and how you can do it like the pros — step by step.

🚀 The Fastest Way to Spot AI Tools That Could Explode in Value
Want to be the first to discover AI tools before they go viral (and VC money floods in)?
Superhuman.AI is your unfair advantage — a daily newsletter showing you the latest money-making AI tools and trends that top investors are tracking.
👉 Click here to get in before the herd catches on

Go from AI overwhelmed to AI savvy professional

AI will eliminate 300 million jobs in the next 5 years.

Yours doesn't have to be one of them.

Here's how to future-proof your career:

• Join the Superhuman AI newsletter - read by 1M+ professionals

• Learn AI skills in 3 mins a day

• Become the AI expert on your team

Start learning AI now

🧭 What Does “Rebalancing” Really Mean?

Let’s start with something simple. Imagine your portfolio as a plate of food. When you first fill your plate, you aim for balance — some protein, some vegetables, maybe a small portion of dessert. But as you eat, one section gets smaller and the plate becomes uneven.

Rebalancing is like adjusting your portions to bring the plate back into balance.

In investing terms, that means selling parts of your portfolio that have grown too much and buying more of those that have fallen behind — returning your portfolio to its original target mix.

For example, if you wanted your portfolio to be:

• 60% stocks

• 30% bonds

• 10% cash

After a great year for stocks, you might end up with:

• 75% stocks

• 20% bonds

• 5% cash

That means your portfolio is now riskier than before — you have more money in stocks than you planned. Rebalancing brings it back to your comfort zone.

💡 Why Rebalancing Is So Important

Most beginners skip this step, thinking, “Why touch something that’s growing?” But that’s exactly how risk creeps in quietly.

Here’s why rebalancing matters:

1. It keeps your risk level consistent.
   Without rebalancing, your portfolio can slowly become riskier over time as certain assets outperform.

2. It helps you lock in profits.
   Selling high-performing assets means you’re literally taking profits off the table — before the market corrects itself.

3. It lets you buy low.
   When you rebalance, you also buy more of what’s underperforming. That means you’re buying low — a strategy every investor loves.

4. It keeps emotions out of investing.
   Rebalancing follows rules, not feelings. It helps you stay logical instead of emotional, especially during market ups and downs.

Think of rebalancing as your portfolio’s “reset button.” It keeps everything running smoothly, even when markets get messy.

📈 A Simple Example of Rebalancing

Let’s make it practical.

Say you invested $10,000 in January with a plan like this:

• $6,000 in stocks (60%)

• $3,000 in bonds (30%)

• $1,000 in cash (10%)

After one year, stocks soar 25%, bonds rise 5%, and cash stays the same. Your portfolio now looks like this:

• Stocks: $7,500

• Bonds: $3,150

• Cash: $1,000

• Total: $11,650

Now your stock portion has grown to 64% of your portfolio, not 60%.

If you rebalance, you would sell a bit of your stock holdings and buy more bonds or keep more in cash — bringing everything back to your intended 60/30/10 mix.

It may sound small, but this discipline makes a huge difference over years of compounding.

🧮 How Often Should You Rebalance?

There’s no single answer, but most professionals recommend:

1. Once or twice a year.
   A common schedule is every 6 or 12 months — enough time for meaningful changes without overtrading.

2. When your allocation drifts too far.
   For example, if your target is 60% stocks, but it becomes 70%, it’s time to rebalance.

3. After major market moves.
   Big bull or bear markets can throw your portfolio out of balance. Use those as checkpoints.

The key is to be consistent — not reactive. Don’t rebalance just because prices moved yesterday. Have a plan, and stick to it.

💬 The Emotional Challenge

Here’s the tricky part — rebalancing often feels wrong emotionally.

Why? Because it asks you to sell what’s doing well and buy what’s doing poorly. That goes against our natural instincts.

For example:

• If your tech stocks have skyrocketed, you’ll feel hesitant to sell them.

• If your bonds or defensive assets have underperformed, you’ll wonder why you should buy more.

But this is where professional investors separate themselves from emotional ones. They understand that markets move in cycles, and today’s winners aren’t guaranteed to win tomorrow.

By rebalancing, you’re not predicting the future — you’re protecting your strategy.

“Smart Investors Know: The Next Big Bets Are on Streaming Ad Platforms”

Kickstart your holiday campaigns

CTV should be central to any growth marketer’s Q4 strategy. And with Roku Ads Manager, launching high-performing holiday campaigns is simple and effective.

With our intuitive interface, you can set up A/B tests to dial in the most effective messages and offers, then drive direct on-screen purchases via the remote with shoppable Action Ads that integrate with your Shopify store for a seamless checkout experience.

Don’t wait to get started. Streaming on Roku picks up sharply in early October. By launching your campaign now, you can capture early shopping demand and be top of mind as the seasonal spirit kicks in.

Get a $500 ad credit when you spend your first $500 today with code: ROKUADS500. Terms apply.

Holiday performance starts now.

🧠 Think Long-Term, Not Short-Term

Rebalancing might not always lead to immediate profits. Sometimes, you’ll sell a winner and it’ll go higher. Other times, you’ll buy a lagging investment and it’ll take time to recover.

But over the long run, this strategy smooths your returns and keeps your portfolio’s growth steady.

Remember — investing is not about having the perfect pick every time. It’s about consistency, discipline, and patience. Rebalancing builds all three.

⚙️ How to Rebalance Step-by-Step

Here’s a simple guide you can follow:

1. Check your target allocation.
   This is your original plan — for example, 60% stocks, 30% bonds, 10% cash.

2. Review your current allocation.
   Use your brokerage or app to see what percentage each category now holds.

3. Compare the difference.
   If the drift is more than 5% from your target, consider rebalancing.

4. Decide what to sell.
   Sell a portion of the overperforming assets (the ones that have grown too large).

5. Buy the underperformers.
   Use the proceeds to top up the categories that are below target.

6. Keep records.
   Note when and why you rebalanced — it helps track your discipline and results over time.

That’s it. Simple, structured, and powerful.

🪙 Rebalancing Doesn’t Always Mean Selling

There’s another trick pros use — instead of selling, they add new money to underweighted areas.

Let’s say your stocks are now 70% and bonds 20% (target is 60/30). Instead of selling stocks, you can invest new cash into bonds until it brings the ratio back in line.

This approach:

• Avoids unnecessary taxes or transaction costs.

• Keeps you fully invested.

• Builds your portfolio more efficiently over time.

This is especially useful for investors who contribute regularly (like through monthly investment plans).

⚖️ Rebalancing vs. Market Timing

Many people confuse rebalancing with trying to time the market. But they’re not the same.

• Market timing means guessing when to buy or sell based on predictions.

• Rebalancing means following a plan — no predictions, just discipline.

Professionals know they can’t control the market, but they can control their strategy. Rebalancing is their way of doing that.

It’s like being the captain of a ship. You can’t control the wind, but you can adjust your sails.

📊 What Professionals Do Differently

When you look at how pros manage billion-dollar portfolios, they all have one thing in common — they rebalance regularly.

Here’s how they think about it:

1. They set clear allocation targets for every asset class.

2. They define tolerance bands — for example, rebalancing if any category drifts 5–10% from the target.

3. They have scheduled reviews every quarter or year.

4. They stick to the plan — no emotions, no guesswork.

You don’t need to be a Wall Street professional to do this. You just need a system and the discipline to follow it.

🧩 When NOT to Rebalance

There are a few times you might want to pause or adjust your approach:

• High transaction fees: If trading costs are high, it might make sense to wait until the drift is larger.

• Tax considerations: Selling assets might trigger capital gains taxes. Be strategic, especially in taxable accounts.

• Major life changes: If your goals or risk tolerance have changed, you may need a new allocation altogether — not just a rebalance.

Rebalancing isn’t a strict rule — it’s a flexible tool. Use it wisely based on your situation.

🧘‍♂️ The Mindset of a Pro

Rebalancing teaches patience, humility, and consistency — three traits every great investor has.

You’re not reacting to news or hype. You’re not chasing what’s hot. You’re simply realigning your money to match your long-term goals.

That’s the mindset of professionals:

• They respect the plan.

• They trust the process.

• They focus on the big picture.

And that’s exactly what helps them stay ahead of the average investor.

💬 My Personal Experience

I remember one year when my tech stocks grew rapidly, and I felt tempted to let them run. “Why sell what’s winning?” I thought.

But I followed my rebalancing plan and trimmed some profits. A few months later, the tech sector dropped, and I realized how important that decision was. By locking in gains earlier, I avoided a bigger fall later.

It wasn’t luck — it was discipline. That’s the beauty of rebalancing. It protects you from your own emotions.

Final Takeaways

Rebalancing might not sound exciting — it’s not about picking the next hot stock or doubling your money overnight. But it’s one of the most powerful habits in investing.

It’s how you:

• Keep your risk under control.

• Lock in profits automatically.

• Stay consistent with your financial goals.

Rebalancing isn’t about predicting the market — it’s about protecting your future. And the best part? It works quietly in the background, keeping your money aligned with your long-term vision.

📣 Call to Action

If you haven’t checked your portfolio in a while, now’s the time.

Open it up. Look at your allocation. Compare it with your original plan. If things look out of balance, take small steps to bring it back in line.

You don’t need to be a professional investor to act like one. You just need a clear plan — and the discipline to follow it.

Remember, it’s not timing the market that builds wealth — it’s time in the market, guided by smart rebalancing.

So today, take 10 minutes and review your portfolio. Your future self will thank you for it.

[Live Life Grow Wealth]

🎓 Free Masterclasses to Unlock Your Investment Potential
Take your money skills to the next level with expert-led workshops designed to help you grow smarter and faster.

/https://register.go-leap.com/tadwebinar?am_id=yongheng6172

/https://superinvestorclub.go-leap.com/superinvestorclub-signup?am_id=yongheng2768

/https://register.go-leap.com/membership-tiers?am_id=yongheng1875

Recommendations Section

DISCLAIMER

I make no representations, warranties, or guarantees, whether expressed or implied, that the content provided is accurate, complete, or up-to-date. Past performance is not indicative nor a guarantee of future returns.

I am an individual content creator and not regulated or licensed by the Monetary Authority of Singapore (MAS) as I do not provide investment services.

All forms of investments carry risks, including the risk of losing your entire invested amount. Such activities may not be suitable for everyone. You are strongly encouraged to seek advice from a professional financial advisor if you have any doubts or concerns.