How to rebalance your portfolio? A guide

#freefincal

[pattufreefincal]

Watch my corporate presentation: Commonsense approach to managing money here:

[SHIVANKARTIWARI]

My age is 27.
Started investing since last 3 years only. I had 5-6 funds since day 1.
But recently, brought em down to 3.
Out of those two are UTI nifty and nifty next 50 third one is Kotak select focus.

Rest I have 70 % in epf and PPF.

Trying to achieve more exposure in equity.

[saipraveen]

I am learning about these concepts from you Pattu Ji...Will rebalance soon. Thanks for the valuable content sir

[santunubhaduri]

I did some rebalancing.I sold around 75% of my units which were around 2years old.Because I had so many funds(as previously I bought unknowingly).I had around 8% annualised returns.I reduced the fund nos.to 2 and invested some amount.Also I put some amount in fd.The rebalancing process was haphazard.Still I am learning.😊

[sivakumarayyadurai]

My age is 49. Started investing from Dec 2014. First did 40% in FD rest 60% in Equity via SIP.
As per my plan till today I didn't rebalance since I started investing because due to the plan I made up just keep investing in MF till my 50th birthday and I will be rebalancing as 50:50 on my 50th birthday in Dec 2020.

[MayurGijam]

This is my second year of investing. I do follow 50/30/20 rule, I have increased second year investment value by 10% and I have rebalanced equity (mf+stock) to 70%, gold to 10%, debt to 10% and ppf to 10% :)

[royk]

Dear Mr. Pattu, Thank you so much for this video. I am 42 now and have a heavy debt portfolio. I am going to retire at age 58. I started equity investing when I became 40. Now my equity is 24% and debt is 76%. I can not withdraw my debt portion as 50% in EPF and VPF, 16% in PPF and 10% in Fixed deposit (12 months expense as emergency fund). I now stopped the VPF and diverted that amount to Nifty 50 Index fund. In equity portion I have 2 funds only Nifty 50 Index and nifty next 50 Index in a ration of 70:30. I will not invest more on debt except my mandatory contribution of 12% basic. My desired allocation of Equity and debt is 65:35. But it seems hard to achieve till my retirement. Primafacie equity and debt ration will be 57:43 at age 58 unless there is huge gain in equity portion. Hence I am unable to rebalance till I become 60. Anyway my focus is now to invest more in Equity and divert all income towards equity.

[Vivek]

One basic question which arose while watching this old video: isnt this asset allocation per-goal? I have this large EPF/VPF/NPS corpus which I can't use any goals other than retirement.

So I am thinking of splitting a large chunk of equity into the several goals and create new fixed income funds for non-retirement goals.

This calculation has been difficult as I had run some return projections to find the right split between goals. I realise that expecting certain returns is flawed.

But I find no easy way to clean up separate funds of different types, horizons into a neat set of goals after close to 6 yrs of investment.

I guess this is a learning journey and i am glad I have access to a voice like yours which has strong conviction on how to approach these problems.

[PukeSkinwalker]

The idea is to use a portfolio optimization strategy to rebalance. So that the risk reward is significant. Every single rebalance (quarterly on triple witching) should be optimized and the idea is that you can win.

[raghavendrasankar]

Much awaited topic. Thanks. For example, one buys equity fund units in nav between 20 to 35 in sip. now the equity market is high, to rebalance he sells some equity fund units on fifo basis nav between 20-25 is sold. After few years market crashes but not heavily because heavy market crash occur rarely every 7 to10 years. His equity fund nav is 28. Now he cannot buy the units in the nav he bought earlier. what he should do. Please clarify sir. Thanks again.

[balakasi_]

Thanks for the video sir. I got introduced to the concept of rebalancing only after i started following you. So firstly thanks for that.

I am 35 years old and i have 54% in debt and 46% in equity. I was doing a vpf contribution till last year and have now stopped it to increase my equity exposure. Like you said in the video, it takes a long time i think to reach the 60:40 allocation and i am kind of not comfortable to break my ppf to invest more in equity, so i have been increasing my monthly contribution to equity from the past couple of months.

Thanks for the deck. I haven't watched it yet. Just bookmarked so that i don't miss the link.

[vivekraghuram]

I have two equity mutual funds and one debt fund. I started investing two years ago and rebalanced at the start of this year to 60:40. Given the present bull market (2024) it looks like I will have to rebalance again as the equity returns are stellar right now.

[makarandvaishnav]

Age 35 & started late in equity
Present allocation 90 debt : 10 equity
Will try to invest more in equity to increase for rebalancing

[Vivek-rgwe]

I have invested 100% on equity and now 5% in fixed income, my plan was to accumulate for few years and then rebalance in fixed and equity...it's a challenge but need to rebalance, although I dnt believe one should be doing rebalancing every year, I believe it's necessary and logical implementation of goal based investment..

[diycarcleanindia]

Excellent video with practical suggestions.

1. My EQ:DT varies between 70:30 to 80:20 with planned progressive reduction of equity.

2. Agree there could be many approaches to rebalancing, the important thing is to DO it rather than overanalyzing best method.

3. In addition to rebalancing existing investment, important to also rebalance NEW/SIP investment in same ratio ( something I learnt from freefincal)

4. I have a question on retirement portfolio. Most of us got high debt component thanks to mandatory EPF deduction. Given we will not withdraw from EPF and rebalance into debt, how do we maintain a high equity asset allocation?

[chandrakumarmagalingam]

Great content. Learned new things today. Rebalance ur asset allocations from good performance assets to weak asset allocation.
I am 43, started SIP from 3 years back advised by Fundsindia based on my goals.
What I realized now is I should increase my Fixed assets percentage bcoz I have less than 10% FD and MF equities rest 90% Now I understand should rebalance to 60:40 eq:FD
When my MF market is high.

[navreetjosan]

Great video! I’m 7.7% equity and rest in fixed at 35 yrs 😑 Thank you for the tips. Can’t wait to implement

[prakashchandraverma]

Thank you so much Sir. This is very helpful. Currently I am also in a Fixed Income boat (EPF+PPF has been started early and still more weight that equity). I was considering to take a liquid fund only for re balancing, but now I got clarity that still need to wait unless both equity and debt becomes at least 50:50.

[sathyamurthysrinivasan]

I am 64, retired Govt. servant. Started equity when i was 52. Now i want to sell off existing MFs and re balance while reinvesting. I want to have 60-40 equity-debt ratio though i can go for 70-30. Goal is to raise a corpus for a noble cause. I think it is better to invest more in equity right now and reduce ti to 60-40 after a year when we sense the slightest fall. Will u please clarify?

[dennisthomas]

Best video I have watched on portfolio rebalancing, thank you sir!