Portfolio rebalancing refers to the realignment of the asset allocation of a portfolio (% in stock/equity, % in bonds/debt) back to the original asset allocation planned for the investment. This is done to control risk and increase the potential for returns.
You can read more about this here:
I have developed a portfolio simulator to help in understanding how rebalancing can make a difference. There is no guarantee that it will result in better returns. However it does make a difference most of the time. You can use this calculator to find how when it is likely to make a difference.
The calculator contains the following sheets:
1. Notes about the calculation procedure.
2. Rebalancing illustration
3. Rebalancing SIP investments
4. Rebalancing lumpsum investments
5. Rebalancing a retirement portfolio to find out how long a corpus will last
6. Sample data and analysis
The calculator uses historical sensex returns for equity instruments and historical FD returns for debt instruments. You are free to change this to anything else you like.
Give this try and learn more about the benefits of rebalancing.
Connect with us on social media
- Twitter @freefincal
- Subscribe to our Youtube Videos
- Posts feed via: Feedburner
- We are also on Google PlusandPinterest
Do check out my books
Get it now. It is also available in Kindle format.
Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You WantMy second book is meant for young earners to get their basics right from day one! It will also help you travel to exotic places at low cost! Get it or gift it to a youngearner
The ultimate guide to travel by Pranav SuryaThis is a deep dive analysis into vacation planning, finding cheap flights, budget accommodation, what to do when travelling, how travelling slowly is better financially and psychologically with links to the web pages and hand-holding at every step. Get the pdf for ₹199 (instant download)
Free Apps for your Android PhoneAll calculators from our book, “You can be Rich Too” are now available on Google Play!
Install Financial Freedom App! (Google Play Store)
Install Freefincal Retirement Planner App! (Google Play Store)
Find out if you have enough to say "FU" to your employer (Google Play Store)