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Asset Allocation Rebalancing One of the key components to strategic asset allocation is to make sure that you review your investments yearly and rebalance when necessary. Make sure that you choose investments that allow for repositioning within the investment itself. After thinking through your goals and risk tolerance, you decide to position 25% in stocks for growth and 33% in bonds. Twelve months later it's been a good year for bonds, but a very good year for stocks, so the growth portion of your portfolio has increased from 25% to 45%. By default, the bonds portion has been reduced to 25%. You had some very good reasons why you only wanted 25% in growth, so you'll want to reset your allocation back to where it was a year ago with only 25% in stocks. < PREVIOUS NEXT > #38599