Image Credit: Alex Nabaum
By Jason Zweig | May 1, 2020 10:00 am ET
The market wisdom that sounds the easiest can be the hardest to follow.
Take “buy low, sell high.”
Buying low and selling high is logically sound but emotionally harrowing. That’s because it requires buying something that feels risky because it just went down, while selling something that feels safer because it has just gone up. That counterintuitive step is what investment professionals call rebalancing: moving against the market’s recent direction to adjust your mix of stocks, bonds and other assets back to predetermined targets.…
To read the rest of the column:
https://www.wsj.com/articles/finding-your-balance-in-a-topsy-turvy-market-11588341602
For further reading:
Books:
Benjamin Graham, The Intelligent Investor
Jason Zweig,The Devil’s Financial Dictionary
Jason Zweig, Your Money and Your Brain
Jason Zweig, The Little Book of Safe Money
Articles and other resources:
William Bernstein, EfficientFrontier.com, “The Rebalancing Bonus: Theory and Practice,” “When Doesn’t It Pay to Rebalance?“, “Case Studies in Rebalancing,” “Rebalancing: Practical Issues”
Vanguard Group, “Best Practices for Portfolio Rebalancing”